The giant bank in Tanzania, National Microfinance Bank Plc. (NMB) has recorded a 2.4 percent increase in profit after tax for the year ended 31 Dec 2016. According to records, NMB, for 10 year in a row, remains the most profitable bank in the country.
Despite the challenging macroeconomic environment, NMB was able to deliver a good performance, the NMB Managing Director – Ineke Bussemaker said.
“The bank’s net profit increased from Tshs 150.3 billion in 2015 to Tshs 153.7 billion in 2016. The growth is attributed to an increase in the Bank’s operating income which rose by 16 percent.” Said Ms. Bussemaker
The bank’s interest income grew from Tshs 438.7 billion in 2015 to Tshs 551.0 billion in 2016 which is equivalent to a 25.6 percent growth. The bank’s total assets grew by 8 percent from Tshs 4,580 billion in 2015 to Tshs 4,951 billion in 2016. Loans and advances to customers rose to Tshs 2,794 billion, a 13 percent increase from Tshs 2,482 billion in the previous year. The loan growth was mainly driven by a growth of Salary Worker Loans which rose by 16 percent from the prior year to Tshs 1,698 billion.
Amidst the liquidity crunch experienced by many banks in 2016, asset growth was funded by a Tshs 172 billion increase in customer deposits and Tshs 312 billion growth in borrowed funds as well as the NMB Retail Bond which raised Tshs 41 billion. As a result, interest expenses grew by 49 percent from Tshs 68.5 billion in 2015 to Tshs 102.2 billion in 2016.
“Customer deposits that are largely comprised of non-interest earning accounts rose by 4.8 percent from Tshs 3, 568 billion in 2015 to Tshs 3,737 billion in 2016.” She said
“A number of our clients were adversely affected by the business climate in 2016, consequently this impacted the loan book quality which deteriorated to an NPL ratio of 4.8 percent in 2016 from 2.4 percent in 2015.” She said
With 20 percent market share in both loans and deposits, NMB has the 2nd largest balance sheet in the industry. For the 10th year in a row, NMB remains the most profitable bank in the country.
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