Dar es Salaam — Middle-level commercial banks are increasingly taking a cautious approach to lending as they seek to raise profits while reducing Non-Performing Loans (NPLs) – and to align with the regulator’s requirements.
A close look at recently-released financial statements for 13 commercial banks which have assets of between Sh100 billion and Sh900 billion indicates that there has been an improvement in performance across several parameters.
Banks are cutting levels of NPLs while profitability is on the rise, fueled by both the funded and non-funded income streams as the economy gets on the smooth recovery path from the Covid-19 bruises.
The list includes five lenders that have assets of more than Sh500 billion, including KCB Bank, Equity, Absa, Bank of Africa (BoA) and I&M. According to their financial statements for the first nine months of the current calendar year, most of these banks registered good profits, with KCB being in the lead with a net profit of Sh11.15 billion cumulatively. Absa came second with a cumulative net profit of Sh9.43 billion.
The list also has NCBA, Mkombozi Bank, Maendeleo Bank, Amana Bank, Ecobank, First National Bank, DCB Commercial Bank and Bank of Baroda.
The 13 lenders jointly extended loans to the tune of Sh2.92 trillion which was a slight increase of about Sh100 billion compared to Sh2.85 trillion that they jointly lent in 2020.
