EXIM Bank pre-tax profit has slowed down eight times affected by higher provisioning on impaired assets.
The bank reported a pre-tax profit of
9.6bn/-last year against 83bn/- recorded in the previous year. Exim’s
acting Group CEO Selemani Ponda said despite profit slowing down, the
bank key operating parameters remained strong supported by strong
balance sheet.
“[The] performance of the bank’s
Tanzania operation was stable on the top line,” Mr Ponda said yesterday
at a press conference. The bank assets grew by 5.0 per cent to 1.6bn/-
in 2017 from 1.5bn/- in 2016.
However, he said during a press
conference, that the bottom line was impacted due to higher provisioning
on the impaired assets. The profit was eaten by higher provision of
29bn/-last year compared to 2.0bn/-in 2016.
The provision was necessary as to
conform to the new accounting procedure—IFRS9 went into effect January.
Also the bank’s profit in 2016 was boosted by one off sale of its equity
stake in NMB bank that raked in 46bn/-. Exim’s acting chief said the
actual pre-tax profit from the bank operation was 37bn/- in 2016.
The bank further planned to write off a
major chuck of its impaired assets in this year quarter one to comply
with the new central bank guidance. “This will help reduction in bank’s
impaired assets portfolio from 14.63per cent to 8.95 per cent at end of
March,” Mr Ponda said.
In the year under review the Group
recorded a 7.0 per cent growth in net interest income to 97bn/- driven
by earning asset books growth, better yields and contained cost of fund.
The net interest income growth increased “despite increasing
non-performing asset book which was subsequently written-off,” the CEO
said.
The interest income—foreign exchange and
fees and commission income--generated a reasonably annual growth of 24
per cent and 12 per cent to 12bn/- and 37bn/- respectively.
Exim bank has subsidiaries in Uganda
with five branches, two in Djibouti and six in Comoro. In Tanzania the
bank has 33 branches with 78 ATMs.
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