Tanzania Banking Newcomer Records First Quarter Profit

The Tanzania Daily News has recently reported that a recent entrant in the Tanzania banking sector, Bank M (Tanzania), has recorded a TZS 232 million profit, based on its first quarter operations this year.

According to the report, Bank M, which was officially established 20 months ago, has indicated that it views this recent performance as a dramatic improvement and a sign of a turn-around following a recorded loss of loss of TZS 219 million during the previous quarter.

In addition, the bank’s Financial Controller, Yahaya Mbanka, has said that the overall non-interest income of the bank has grown by a total of 36 percent.

“The recently published financial statements of the bank further indicate the non-interest income has grown by 36 per cent from TZS 676 million in the last quarter to TZS 916 million, as of March 31,” said Mr. Mbanka, “In fact, non-interest income contributed 53 percent of the total income, which is reflective of the low risk approach to business and the resultant lower level of capital and customer deposits at risk.”

Overall, records have indicated that the total interest income for the new bank increased by 21 percent from TZS 1,543 million to TZS 1,792 million.

During this same time, the net interest income of the bank also witnessed an increase of 21 percent, from TZS 686 million in the previous quarter to TZS 797 million during the most recent quarter.

“The bank had done exceptionally well in the last quarter and that the bank recorded profit in both month by month and quarterly [is] an indication that the bank has now conclusively turned profitable,” said Mr. Mbanka, “We are proud of this huge achievement for such a young bank and this qualifies us as among the fastest growing bank in the market.”

The recent success of the bank is further indicated by the fact that the deposits at the bank have also indicated an increase during the first quarter, from TZS 50,222 million to TZS 53,347.

Half of the recorded deposits during the most recent quarter originated from outside Institutions, with the remaining portion coming from corporate customers (45 percent) and other Banks (5 percent).

According to Mr. Mbanka, the loans and advances that the bank processes have also witnessed a growth of 22 percent, from the TZS 38,142 million that was recorded at the beginning of the quarter to the TZS 46,684 million that was officially recorded at the end.

“Our lending is carefully done to ensure a good spread across various sectors of the economy, with emphasis on Agriculture and rural development sectors, which continue to enjoy a significant portion of 19 percent of the overall loan portfolio,” said Mr. Mbanka.

Mr. Mbanka went on to indicate that the success of the bank can be attributed both to its customers and to its well-established delivery channels.

“We believe that achieving this extraordinary success is highly contributed by the confidence of our customers and, of course, [to] our well formulated delivery channels [which are] supported by the latest technology that our bank has put in place,” said the bank’s Financial Controller.