Tanzania: CRDB Profit Increase Pushes Up Share to Eight Months High

By Abduel Elinaza

CRDB Bank Group profit increase posted last year has pushed up share price to eight months high. The Group registered an 87 per cent Year on Year growth in profit to...

120bn/- compared to 64bn/- posted in 2018.

Share price of the largest bank in term of balance sheet sunk to the historical low level of 90/- a piece but the lender positive performance rejuvenated the price to shoot to 130/- as of last Friday, which is the highest in eight months.

The Group CEO and Managing Director, Abdulmajid Nsekela attributed the growth to a sound strategy, which has transformed the business and unlocked the bank's potential of growth.

"We have changed the way we do business by investing more in efficient processes, improving productivity and inculcating a high-performance culture," Mr Nsekela said.

The lender's net Interest income grew by 19 per cent to 526bn/-, driven by retail loans, investment in government securities and reduced funding costs. Non-Interest Income grew by 15 per cent to 253bn/-.

During the year, customer deposits grew by 11per cent to 5.2tri/-, fuelled by a mix of business initiatives such as enhancement of the digital banking offering--SimBanking and internet banking-- and the launch of new products targeting new segments of the market.

The customer base jumped to 3 million up from 2 million. "We are actively engaging customers using targeted forums with the view of listening to their unique needs and building better relationships to help them achieve their goals," the CEO said in a statement issued yesterday.

Also, loans and advances grew by 8.0 per cent to 3.4tri/-, compared to 3.1 tri/-reported in Q4 of 2018. The bank said growth of loan portfolio was largely driven by a favorable business environment and reinforced by the bank's sustained push to extend credit to Small and Medium Enterprises (SMEs) and Consumer sectors.

Non-Performing Loans (NPLs) reduced significantly to 5.5 per cent from 8.5 per cent reported in 2018. "This follows the implementation of a stringent NPL containment strategy, which focused on reducing bad loans" the statement read.

The Group also enhanced its network distribution by recruiting more than 9,000 CRDB Wakala agents to deliver banking services to the masses. Wakala grew from 5,457 in 2018 to 14,671 in 2019.

"Financial inclusion is part of our broad strategy to create value because we see it as an opportunity to build a sustainable business," Mr Nsekela explained. Group total assets grew by11 per cent to 6.6tri/-, up from 5.9tri/- reported in the same period in 2018.