Tanzania: Absa Profit Rises, Defies Covid-19 Turmoil

Tanzania: Absa Profit Rises, Defies Covid-19 Turmoil

Absa Bank Tanzania has registered a 1,875 per cent rise in net profit in the 2021 financial year showing how the bank maintained outstanding operational viability in the aftermath of the Covid-19, defying a year marked by turmoil in all sectors including the banking sector.

"The year 2021 has been a very good year from the financial performance perspective as the Bank was able to recover from a reported loss position of 532m/- in 2020 to register a 9.4bn/-profit after tax (PAT) in 2021," said the bank’s Managing Director, Mr Abdi Mohamed.

He said the 2020 reported loss was mainly contributed by the negative effects of the Covid-19 pandemic that affected most of the sectors in the economy and impacted on the bank’s financial performance by lowering revenues and increasing loan impairment losses.

According to the Bank’s MD, profit before tax (PBT) also grew significantly by 210 per cent year on year from 4bn/- last year to a 13bn/- in 2021, mainly contributed by declining loan impairment charges by 30 per cent and decreasing operating costs by 8 per cent while the Bank was able to maintain stability in the revenue performance year on year.

He also said that the bank’s net interest income grew by 2 per cent in 2021 despite decent growth in customer loans mainly due to the timing of the customer loan growth during the year and declining margin as the bank continue to improve on customer pricing and make lending more affordable to its customers.

The Absa Finance Director, Obedi Laiser said, in 2021 most businesses recovered albeit not fully from the pandemic impact of 2020 and the Bank registered growth in customer loans and customers deposits of 17 per cent and 2.1 per cent respectively from the previous year with a corresponding 30 per cent decrease in loan impairment charges due to improvements in the financial performance of most borrowers in the year.

Customer deposits would have grown by a decent 11 per cent in the year but were impacted by a regulatory change during the year on mobile money trust account deposit holdings.

The Bank recorded growth in customer loans across all its business customer segments of retail, business banking and corporate banking as it continues to drive and execute its strategic plan to ensure to improve its digital offerings, customer segment expansion and participate more broadly into the public sector support initiatives.

According to the Finance Director, during the […]

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