[Tanzania] NMB posts 4 per cent jump in profits on increased recoveries of bad loans
National Microfinance Bank Plc. (“NMB”) has posted a 4 per cent increase in net profit. The bank’s profit after tax (PAT) for the three months ending March 31, 2017 grew to TZS 40.9 billion from TZS 39.3 billion recorded for the same period in 2016.
NMB Managing Director - Ineke Bussemaker attributed the good start to the year to improved operating income and increased recoveries of previously non-performing loans.
Ms Bussemaker said that total operating income rose by 4.6% from TZS 56.1 billion recorded at the end of the first quarter in 2016 to TZS 58.7 billion in 2017. This growth was driven by an increase in both the net interest income as well as the foreign exchange revenue which increased by 41% from TZS 3.5 billion in the previous year to TZS 4.9 billion in 2017.
“Net interest income for the first quarter of 2017 was TZS 115.9 billion, a 9.4% increase from TZS 106.0 billion for the first quarter of 2016 and a 0.9% increase compared to TZS 114.9 billion recorded in the last quarter of 2016,” Said Ms Bussemaker
The banks financials also indicates that Non-interest revenue (NIR) increased from what was recorded in the same period in 2016 as well as the previous quarter. The bank’s NIR rose by 5.3% from TZS 39.4 billion in the first quarter of 2016 to TZS 41.5 billion in the first quarter of 2017 and by 4% from TZS 39.9 billion recorded in the 4th quarter of 2016.
Customer deposits only grew by 0.9% from TZS 3.71 trillion in the last quarter of 2016 to TZS 3.75 trillion in 2017.
“To grow the customer base and subsequently the deposit base, the bank is deploying more agents i.e. NMB Wakala across the country. The goal is to have a total of 4,500 agents by the end of the year.” Said Ms Bussemaker
The ongoing market-wide liquidity shortage has forced the bank to prudently slow down on the lending. Loans and advances extended to customers in the quarter decreased by 1.2% to TZS 2.76 trillion from TZS 2.79 trillion recorded in the previous quarter. Our loan to deposit ratio remains healthy at 74.6%.
Our loan recovery efforts are reflected by the Non-Performing Loans (NPL) ratio which has decreased to 4.6% from 4.8% which was recorded in the previous quarter.
“This is a good start to the year. The management team is committed to deliver good returns to our shareholders for the year 2017,” Ms. Bussemaker added.