TCB aspires to be Tanzania’s third-biggest bank

Dar es Salaam. Tanzania Commercial Bank (TCB) has outlined a strategic roadmap aimed at propelling it to the position of the third-largest bank in the country within the next three to five years.

This plan centres around three key focus areas: prioritizing support for small and medium entrepreneurs (SMEs), leveraging digitization with improved offerings, and optimizing operations.

Traditionally, the bank, since the days when it was known as Tanzania Postal Bank, used to focus primarily on issuance of banking services to individuals, public servants and retirees.

But TCB CEO Adam Mihayo said on Tuesday that with a focus on new areas, some Sh300 billion will be loaned in support of both large companies and SMEs.

It also seeks to make an impact on financing of the government’s strategic projects, including the Standard Gauge Railway (SGR) for which it has already facilitated the importation of wagons.

“Not only that, even major contractors are our clients, and we have been helping contractors. Now we want to take this assistance elsewhere and are in talks with the Tanzania Rural and Urban Roads Agency (Tarura) to ensure we empower contractors financially so they can start their activities early,” he said.

He said if the projects are implemented early, the economic value the government is expected to gain will show early signs.

He further said they are prepared to ensure they make sufficient investments in digital services to broaden people’s access to services and simplify their accessibility.

“As an institution, this also helps us to not rely solely on interest income; we are creating a broad revenue base, which will help us lower our costs, making our services easily accessible,” he said.

Adding, “We believe that by doing this, within three to five years we will be able to grow and become the third-largest bank in the country, and we believe it is possible,” Mr Mihayo said.

Within three years, said Mr Mihayo, TCB also aspires to become the third largest dividend payer to the government.

It also aspires to become an entity that leads the way in Tanzania’s financial inclusion efforts.

TCB has 82 branches, putting it on the list of three   top lenders in terms of network of outlets.

However, Mr Mihayo told journalists on Tuesday that by leveraging technology, the lender will raise the number of its banking agents further from the current 6,000.

“Our services are also available across a network of 350 ATMs but recently, we signed an agreement with another bank that significantly raises the number of ATMs through which our services can be accessed,” said Mr Mihayo.

TCB joined the list of Tanzania’s first-tier banks in 2020 when its total assets crossed the Sh1 trillion mark.

Since then, it has seen its total assets rising to Sh1.47 trillion in 2023, Mr Mihayo said, adding that it now targets Sh1.7 trillion in assets in 2024.

The bank started the year 2024 with a positive note, recording a profit after tax of Sh10.7 billion during the first quarter of the year.

“If this continues, we should be talking of a profit after tax of not less than Sh40 billion for the entire 2024,” he said.

During the first quarter of 2023, TCB registered a profit before tax of Sh1.7 billion.

This suggests that its profit after tax has risen by a staggering 529 percent.

The money was realized through compelling growth rates in both the funded and non-funded income streams which resulted into a 30 percent growth in total revenue in the first quarter of 2024 compared to a similar period last year.

It however managed to contain total operating expenses effectively, which rose by only 1.113 percent to Sh26.8 billion during the first quarter of 2024, from Sh26.5 billion during a similar period last year.

TCB managed to contain the ratio of Non-Performing Loans (NPLs) to total gross loans to 3.97 percent during the first quarter of 2024.

“This means that we are doing business with customers that actually repay the loans they get from us,” he said during a meeting that was organised by the office of the Treasury Registrar.

Mr Mihayo said that the SME sector was crucial in fostering economic growth as it contributes approximately 30 percent to economic growth.

“We want to make larger investments in the production sector, and we have seen that the SME sector will be beneficial to our country because it contributes 30 percent to economic growth. By providing them with capital, it will enable them to grow, employ more people, and expand the tax base,” he said.

According to him, through the allocated funds, more than 2000 entrepreneurs are expected to benefit from them to stimulate their growth in the economy.

He said they chose to promote SMEs because it touches many sectors in the country, citing agriculture as a significant employer in the country.

“There are also many entrepreneurs who, through our partners like the Agricultural Bank, inspire us to continue helping them,” Mr Mihayo said.

TCB held a total of Sh1.17 trillion in customers’ deposits during the first quarter of 2024, a 12 percent improvement from Sh1.04 trillion held during a similar period last year.