Dar es Salaam. The first quarter of the calendar year 2021 was a mixed bag of fortunes for commercial banks that saw the country’s two largest banks registering record profits.
A quarterly profit before tax of Sh93.7 billion was historic for NMB Bank Plc. It grew from Sh70.9 billion during a similar period last year.
On the other hand, CRDB Bank’s profit before tax rose to Sh62.284 billion during the first quarter of 2021, from Sh45.705 billion during a similar period last year.
The two were some of the lenders that came out strongly during the period when a number of operators reported a slowdown in profits amid a slight improvement in deposit mobilisation as the sector starts to recover from last year’s Covid-19 impact.
Despite that however, NMB Bank Plc and CRDB Bank Plc were able to register compelling improvements in a number of parameters, including profits, customers’ deposits and loans and advances while also containing the levels of Non-Performing Loans (NPLs) to below five percent in line with recommendations by the Bank of Tanzania (BoT).
NMB Bank Plc said in a statement emailed to The Citizen yesterday that the solid performance reflects continued revenue growth momentum, disciplined cost-optimization, and enhanced loan portfolio management.
Its total revenue grew 16 percent to Sh224 billion from Sh193 billion that was recorded in the first quarter of 2020.
This, the bank’s financial figures show, was fueled by a rise in funded income and non-funded income whereby the former was largely due to an increase in both loans and advances and investment in government securities.
It’s non-interest income revenue stream rose by 10 percent largely on account of increased customer activities on the bank’s digital platforms.
“We had a promising start to the year as we continue to deliver consistently to our shareholders and our communities. The bank’s revenue continues to grow due to enhanced customer value propositions and we have a firm grip on cost and risk,” said the bank’s chief executive officer, Ms Ruth Zaipuna.
She said the performance reflected the good progress along the bank’s strategic initiatives. “It also underlines our strong capabilities and commitment to remaining relevant to our customers,” she said.
In what demonstrates an enhanced operational efficiency, NMB Bank Plc’s cost-to-income ratio improved to 48 percent during the first quarter of 2021 from 52 percent during a similar period last year and below the regulatory threshold of 55 percent.
On the other hand, CRD Bank Plc’s total deposits rose by 3.4 percent to Sh5.288 trillion during the first quarter of 2021 while loans and advances amplified by 13.7 percent.
The bank’s total assets rose by 9.7 percent to Sh7.2 trillion.
The bank’s profit rise was precipitated by an improvement in both interest (funded) and non-interest (non-funded) income streams.
While net interest income rose to Sh152.437 billion during the first quarter of 2021 from Sh136.761 billion during the last quarter of 2020, non-interest income rose to Sh69.464 billion from Sh66.208 billion during the same period.
It managed to bring down levels of NPLs from 4.4 percent during the last quarter of 2020 to 4.1 percent during the first quarter of 2021.
The future looks promising as reflected in a growth in deposits some lenders, including Standard Chartered Bank Tanzania.
During the period, the bank’s total customer deposits grew by 34 percent from Sh1.076 trillion during the last quarter of Sh1.445 trillion during the first quarter of 2021 (See related story on page 8).
According to the NMB Bank Plc’s chief executive officer, Ms Zaipuna, both the bank’s shareholders and clients can look up to a promising future.
The bank, she said, will continue to implement cost-optimization and operational efficiency initiatives in line with its overall strategic ambitions while continuing to serve customers better.
The strengthening of its (NMB Bank’s) capital position during the first quarter of 2021 to reach the Tier I Capital Ratio of 19.6 percent, up from 17.8 percent in Q1 2020, also points to a promising future.
“Our capital position remains strong and provides sufficient headroom to support our bold growth ambitions. With the firm foundations that we have in place and an improved global economic outlook, we have increased confidence in our growth plans as we carry the good momentum into the second quarter,” she said.