Mid-sized banks to watch as sub-sector recovers

Mid-sized banks to watch as sub-sector recovers

Dar es Salaam. The year 2021 was generally good to a number of mid-sized lenders as available data show that some of them exhibited resilience and steady growths across a number of performance parameters in 2021 as the sector partially recovers from the Covid-19 pandemic.

This group includes lenders with asset levels ranging from slightly below Sh1 trillion and above Sh200 billion, majority being subsidiaries of large regional banks.

They include: KCB Bank Tanzania, Absa Tanzania, Bank of Africa (BoA), Equity Bank Tanzania, I&M Bank Tanzania, Bank of Baroda, Mkombozi Bank, BancABC, Amana Bank, NCBA Bank Tanzania, People’s Bank of Zanzibar (PBZ) and Habib Bank.

The Citizen’s probing eye into the financial statements for 10 of the 12 mid-sized lenders reveal that it was actually four banks that recorded breaking annual gains in terms of improved asset size and a drop in levels of Non Performing Loans (NPLs).

KCB Bank Tanzania, Absa Tanzania, Bank of Africa (BoA) and Equity Bank Tanzania registered splendid growth rates in profitability in 2021. KCB Tanzania saw its net profit rising to Sh15.64 billion in the year to December 2021, from Sh4.44 billion that was recorded in the year ending December 2020. The bank also cut its NPLs levels from six percent in 2020 to only two percent in 2021. This is far better than the regulatory recommended level of at five percent.

KBC Bank Tanzania’s assets rose to Sh836.27bn in 2021, from Sh721.56 billion in 2020 while its customers’ deposits improved to Sh555.78 billion from Sh470 billion of the previous year.

Speaking to The Citizen, the KCB Tanzania managing director Cosmas Kimario said part of the bank’s success could be explained by its establishment of customer-centric strategies, technological innovation in service delivery and discipline in issuance of loans.

“We have made significant technology investments and transformed our service delivery in facilitating seamless access, penetration and efficiency,” he said.

This he says was also attributed to the change in customers’ behavior as people now prefer fast, simple and efficient services without spending hours at the bank, which in turn improved transactions in services like internet banking.

The other bank to watch is Absa Tanzania. The lender’s profit after tax advanced by 1,875 percent to reach Sh9.4 billion in 2021 from a loss of Sh532 million in 2020.

The bank’s financial statement shows that its earnings have swiftly advanced from a loss of Sh532 million in 2020 to a profit after tax of Sh9.4 billion […]

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