CRDB Bank’s half-year profit rises

 

CRDB Bank Plc managing director Abdulmajid Nsekela. PHOTO | COURTESY

By The Citizen Reporter

Media/news company

Mwananchi Communication Limmited

Summary

·         The bank has attributed the minimal rise in profits to substantial investments in its DRC office and CRDB Insurance.

Dar es Salaam. The profit before tax for CRDB Bank Plc rose by six percent during the first half of the current calendar year, the bank announced yesterday.

The lender realised Sh265 billion in profit before tax, up from Sh250 billion that was registered during the first half of 2022.

The Bank’s Group CEO, Abdulmajid Nsekela, said in a statement yesterday that the slow growth in profits was due to a rise in funding costs necessary to meet the growing demands of the business.

The minimal rise in profits was also because the lender has made substantial investments in its two new subsidiaries, namely, CRDB Bank DRC and CRDB Insurance Ltd. CRDB Bank’s DRC subsidiary opened doors to the public in Lubumbashi on July 10, 2023.

He however noted that despite the slight growth of profit, the results reflect successful implementation of the bank’s new five-year strategy which runs from 2023 to 2027.

“We are however optimistic that these investments have the potential to positively impact the Group’s performance in the future,” he said in a statement yesterday.

CRDB Bank’s total income rose by nine percent year-on-year, with the interest income surging by 26 percent to Sh192 billion compared to Sh175 billion in the corresponding period last year.

Non-interest income rose by seven percent to Sh106 billion from Sh103 billion.

With a growth in revenue, the bank’s balance sheet expanded, with total assets surging by 22 percent from Sh10.2 trillion in the second quarter of 2022 to Sh12.5 trillion at the end of June, 2023.

This was largely on account of a 29 percent year-on-year increase in loans and advances which grew from Sh5.9 trillion to an impressive Sh7.6 trillion.

“Despite this substantial loan growth, the Non-Performing Loan (NPL) ratio saw a decline from 2.8 percent to 2.7 percent. This indicates the Bank’s effective risk management practices and ability to maintain a healthy loan portfolio amid rapid expansion,” said Mr Nsekela.

The Bank’s customer deposits grew by 23 percent, increasing from Sh7.1 trillion in 2022 to Sh8.7 trillion.

Nsekela said the Bank continued to prioritise expanding its service delivery channels, ensuring greater accessibility to services for customers.

Meanwhile, CRDB’s chief financial officer, Mr Fredrick Nshekanabo, said the bank’s digital transactions have played a pivotal role in propelling revenue growth to new heights.

He said with various campaigns to promote the use of digital channels, 96 percent of all transactions were conducted through digital channels.

Mr Nsekela said there was optimism about the future, buoyed by the bank’s proactive approach to enhancing its revenue streams by leveraging strategic investments in technology, network expansion, and new subsidiaries to unlock fresh avenues of income and reinforce the Bank’s competitive edge.