31 July 2019
Azania Bank Limited managing director Charles Itembe. PHOTO | FILE
Dar es Salaam —
Azania Bank Ltd (ABL)'s pre-tax profit climbed to Sh3.1 billion during
the second quarter of this year, which ended in June, as compared to
Sh1.7 billion recorded during the same
period last year.
ABL's quarterly
financial statement for the second quarter of 2019, which was published
yesterday, shows that the profit is attributable to an increase of net
interest income to Sh17.8 billion from Sh9.2 billion.
However,
non-interest expenses increased to Sh15.9 billion in the second quarter
from Sh8.8 billion in the corresponding period of 2018.
Despite doubling
its profit, the bank is facing the challenge of addressing
non-performing loans (NPLs). The NPLs soared to Sh298.5 billion from
Sh24.8 billion in the same period this year.
The bank
performance in the first quarter contravened regulations laid down by
the Bank of Tanzania (BoT), which requires banks to maintain a below
five per cent NPL ratio.
Speaking to The
Citizen, the bank's managing director, Charles Itembe, said the increase
of NPLs was down to the acquisition of defunct Bank M assets, which was
under statutory management for nine months.
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He said during the
period under the statutory management Bank M was not operational, hence
transactions (payments and collections) were literally not active for
more than 270 days, which led to an increase of NPL, something which was
expected.
"We are looking
forward to making an improvement after reaching some agreements with
stakeholders. The effective use of facilities and accounts will
certainly improve the NPLs ratio in the near future," he said.
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