The country’s economic recovery and improved business environment have continued to drive the positive performances of the banking industry, as many “trillion” banks ended the first half of this year smiling.
The second quarter’s unaudited financial statements among selected large banks in Tanzania, with assets of more than 1trn/-, show positive trends on their books of account, specifically in the areas of profitability, assets recovery, deposits mobilization and lending.
Bankers say the increased profitability resulted from improvement of business environment, increased economic activities which led into the growing appetites for credits as well as the willingness of banks to lend more due to improved assets quality.
According to Bank of Tanzania (BoT) monetary report for July, credits to private sector have estimated to have grown by 16 percent, among the highest in East African Community (EAC).
Agriculture and personal loans contributed more to the observed credit growth, while personal loans, mainly directed to micro, small, and medium-sized enterprises, accounted for the largest share of total credit to the private sector.
“Credit to the private sector is expected to remain strong, attributable to the recovery of economic activities coupled with an improving business environment and supportive policies,” BoT says.
During the reported period, BoT says, the banking sector was liquid, profitable, and adequately capitalized, recording growth in deposits and assets.
The increase in assets was in tandem with deposits, enabled by the agent-banking model, proliferation of financial products, and digital banking services, while the expansion of loans was attributable to the improved business environment, the central bank said.
“Liquidity in banks was adequate and enough for loan provision, with the ratio of liquid assets to demand liabilities, as well as to total assets hovering above the regulatory requirements,” the report added.
The financial statements for the two leading banks of CRDB and NMB show that they recorded a combined net profit of 500bn/- during the first six months of this year, from 441bn/- recorded during the first half of last year, driven by both funded and non-funded incomes.
CRDB Bank, the largest bank in terms of assets, managed to expand its assets base to nearly 15trn/- during the end of June this year, from 13.9trn/- at the end of March year, which has enabled it to consolidate its top position as the largest bank.
Its unaudited financial statement for the second quarter of this year, the bank also recorded the growth of profitability to 274.9bn/- during the first half of this year, of which 147bn/- were recorded during the second quarter, from a net profit of 179.9bn/- recorded during the first half of last year.
The bank’s net interests income grew to 530bn/- during the first six months of this year, from 394bn/- attained during the first half of last year, while loans to various sectors of the economy expanded to 9.5trn/- at the end of June, 2024 compared to 8.8trn/-recorded in March 2024, with lowest NPLs rate of 2.3 percent.
The bank’s customer deposits mobilization also experienced the positive trend, after closing the first half of this year at 9.9trn/- compared to 9.3trn/ recorded at the end of the first quarter of this year.
NMB Bank, the second largest in terms of assets and the most profitable recorded a net profit amounting to 314bn/- during the period of six months ended in June, compared to 262bn/- recorded during H1, 2023, pushing its earnings per share to 1,106/- from 1,048/- respectively.
Unaudited financial statement show the bank’s deposits also went up to 8.9trn/- at the end of June this year, compared to 8.3trn/- recorded at the end of March this year, while lending to various sector of the economy grew to 8.9trn/- from 7.8trn/- respectively.
Total assets increased to 12.9trn/- during the second quarter of this year, compared to 12.4trn/- recorded during the first quarter of this year, maintaining its second largest position in Tanzania’s banking sector.
During the period, the bank managed to increase the number of physical branches to 234 from 228, which also pushed up the number of employees to 3,776 at the end of June this year from 3,595 who were employed during the period ended in June last year.
The third largest NBC also recorded the considerable growth of profitability, after hitting 56bn/- during the first half of this year, from 42.5bn/- during similar period of last year.
The bank’s unaudited financial statement shows the growth of profitability resulted into an increased funded and non-funded incomes.
Net interest income reached 120bn/- from 95bn/- as lending to various sectors of the economy expanded to 2.78trn/- at the end of June this year, compared to 2.5trn/- at the end of the first quarter of this year.
The bank’s total asset increased to 4.1trn/- by June this year from 3.7trn/- by March this year, while customer deposits have hit 2.75trn/- from 2.5trn/- respectively. However, the number of branches remained unchanged at 47.
The statements show the fourth largest Exim Group attained a net profit of 41.bn/- during the first half of this year, with expanded balance sheet as total assets reached 3.2trn/- at the end of June from 2.9trn/- at the end of March this year.
The group’s loans also increased to 1.68trn/- during the second quarter of this year from 1.60trn/- recorded during the first quarter of this year, while customer deposits increased by nearly ten percent to 2.4trn/- from 2.2trn/- respectively.
Stanbic bank total assets also expanded to 2.7trn/- with its net profit jumped to 68bn/- at the end of June, compared to 39bn/- recorded during similar period of last year.
Deposits mobilization slightly increased to 1.81trn/- during the end of June, compared to 1.80trn/- during the end of March, while lending to various sectors of the economy grew to 1.5trn/- from 1.3trn/- respectively.
Standard Chartered bank, with total assets of 2.3trn/- also recorded considerable growth of profitability after its net profit increased to 53bn/- from 40.2bn/-.
Deposits amounted to 1.4trn/- at the end of the second quarter from 1.29trn/- at the end of the first quarter, while the level of non-performing loans remained below the regulatory benchmark of five percent to 3.4 percent in Q2, from 3.6 percent in Q1, 2024.
Other trillion shillings banks which recorded an increase of profitability according to their unaudited financial statements include KCB (from 17.7bn/- to 26bn/-), Absa Tanzania (from 23.3bn/- to 38.7bn/-), Equity Bank (from 10.9bn/- to 11.3b/-), People’s Bank of Zanzibar from 26bn/- to 31.5bn/-) and Diamond Trust Bank (from 8.4bn/- to 17.6bn/-).
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