Dar es Salaam. Interest income remains the major source of profit for the banks in Tanzania. But other streams have shown improvement – and are increasingly raising their share of contribution to the lenders’ profit basket.
An analysis by The Citizen of the financial statements of various commercial banks in the country has indicated that, while the interest income stream registered low growth rates in 2019, it was actually growth of the non-interest income that increased at a better rate. Non-interest income includes fees and commissions, as well as dividends and earnings from foreign exchange dealings – among other streams.
Fees in the banking business include monthly fees and other charges, such as those which are levied on the withdrawal of cash from bank branches at tellers’ counters, as well as through automated teller machines (ATMs). For instance, NMB Bank’s interest income grew by only about 1.3 percent last year. But the bank’s non-interest income rose by a goodly 14 percent!
In the event, the bank’s net profit rose by a relatively whopping 52 percent, to reach Sh148.6 billion during the year to December 31, 2019, up from Sh97.663 billion in 2018.
The bank raised its earnings from foreign exchange dealing to Sh24 billion in 2019, up from Sh20 billion in 2018. On the other hand, its income from fees and commissions rose to Sh188.7 billion last year, compared to Sh167 billion in 2018.
While the NBC Bank’s interest income dropped slightly, its non-interest income stream registered a 12 percent growth, thereby sending the earnings in that category to Sh58.7 billion. Fees and commissions increased from Sh36.45 billion in 2018 to Sh41.37 billion in 2019.
For its part, CRDB Bank’s interest income rose by 18.5 percent in 2019 – and non-interest income rose 18.3 percent in the same year.
The bank made Sh37.86 billion from foreign exchange dealings in 2019, up from Sh30 billion in 2018.
The Diamond Trust Bank’s interest income stream rose by only 0.33 percent last year. But, its earnings from non-interest income increased by 6.08 per cent.
On the other hand, the interest income for the Stanbic Bank rose by 12.3 percent, as against a 3.4 percent rise of the bank’s non-interest income.
