According to a recent report by The East African, the NIC Bank Group is planning to expand it branches into the Tanzania banking sector after having witnessed a pre-tax profit of 18 percent during its half-year results. The East African, a Kenyan journal, went on to indicate that the banking group had recorded a profit of USD 9.8 million for the period ending on June 30, 2009, which represents an improvement from the USD 8.3 million that was reported during the same period last year and, according to the group’s managing director, James Macharia, these results are satisfactory.
“Despite the challenging operating environment,” he said, “the group reported good performance in all the key financial indicators.”
Mr. Macharia went on to say that the bank is planning to open new branches in Tanzania after having acquired a 51 percent stake in the Savings and Finance Commercial Bank of Tanzania last April.
“Soon, we will have branches in Dar es Salaam and Mwanza,” he explained, “The market is robust and has great potential.”
Currently, the NIC Bank Group has expressed the desire to attract deposits from the country’s fishing and mining community, which will help to add to their momentum in regional diversification.
“The banking sector in Tanzania is still undeveloped,” explained the managing director, “This can result in better profit margins for us.”
In addition, Mr. Macharia indicated that the bank was also looking to expand to other areas apart from Dar es Salaam and Mwanza.
To this end, the group has already announced their plans to open a new branch in Meru, Kenya during the last quarter of the current financial year, thus bringing the total number of its branches in Kenya to 13, in addition to the three branches that already exist in Tanzania.
As a result of both local and regional expansion, the total income for the banking group increased by 27 percent during this period from USD 17.5 million to USD 22.5 million.
In addition, the bank’s loan book from last year also recorded a 15 percent growth from USD 3.21 billion to USD 3.7 billion as well as a 26 percent increase in customer deposits to USD 462.5 million.
According to Mr. Macharia, because the general economic climate was mean, the majority of the bank’s profits have been attributed to forex trading and corporate banking.
Currently, the NIC Group is composed of the bank, the investment banking arm (the NIC Capital) and the brokerage subsidiary (the NIC Capital Securities).
In addition to its plans for expansion, the banking group is also planning to incorporate a strategy over the next half of the year to consolidate its position in the capital markets.