CRDB sees bright future after profit slowdown

ABDUEL ELINAZA

CRDB Managing Director Dr Charles Kimei

CRDB Bank is forecasting a positive future this year following recent monetary policy changes and implementation of mega projects.

The bank, largest in term of balance sheet, last year posted a pretax profit slow downed by ...

37 per cent top 118bn/- but was adamant to make a good profit this year. CRDB’s Managing Director, Dr Charles Kimei, said 2016 was a difficult year especially after the government’s move to shift its funds to the Bank of Tanzania (BoT).

“It was a difficult year (2016) especially the final quarter…but we managed to make steadfast achievements,” Dr Kimei said. He said the future look bright especially after BoT made monetary policy change on discount and bank’s deposits rates.

“This would help to stimulate the lending sector…banks will be more liquidity and have more power to lend,” Dr Kimei told reporters yesterday. He said lending rate are expected to go down after BoT slashed the rate to 12 per cent from 16 per cent while CRDB will receive some 80bn/- following reduction of banks deposit rate.

In total BoT Governor, Prof Benno Ndulu, said the central bank will release between 400bn/- and 500bn/- to banks and financial institutions following cutting deposit rate by 2.0 per cent. The entire banking industry profit before tax slowed down by 2.9 per cent in 2016.

This was because of the new regime that introduces some austerity measures and some monetary policy change. CRDB interest income grew by 14 per cent to 568.2bn/- last year, however, interest expenses went up by 27.4 per cent to 136bn/- to cut down net interest income to 432bn/-.

Dr Kimei said operating expenses also ballooned by almost 21 per cent to 347.6bn/- following the bank expansion drive undertaking to increase its network.

“Despite saying we will slow down on our network expansion but happening in the grounds pushes us to invest heavily and open 54 new branches.

“Hence we employed almost 600 new staff in a single year and 78 ATMs,” Dr Kimei said, adding this pushed up their operation expenses. CRDB currently has 250 branches and 510 ATMs. The FahariHuduma, bank agent, reached 2,558 while in the same year microfinance partners scaled up to 455.