Azania Bank has announced a significant boost in its net profit during the fourth quarter, primarily driven by a surge in net interest income. The bank's financial statement reveals a 7.7% increase in net profit, reaching 8.79 billion Tanzanian Shillings in the three months ending December last year, compared to 8.16 billion Shillings in the previous quarter.
With assets exceeding 2.16 trillion Shillings as of the end of the last month, Azania Bank's positive results can be attributed to the robust growth in interest income. The net interest income witnessed an impressive 32.2% surge to 33.7 billion Shillings in Q4, up from 25.4 billion Shillings in the same quarter the previous year.
This notable increase in net interest income is credited to a rise in the number of loans extended by the bank, totaling 1.63 trillion Shillings at the end of December last year, compared to 1.48 trillion Shillings in the previous quarter ending September.
Non-interest income also saw a remarkable threefold increase to 11.1 billion Shillings from 4.70 billion Shillings in a corresponding period the previous year, marking a 136% surge. This boost is attributed to commissions and fees, with the bank's commissions and fees soaring nearly threefold to 8.07 billion Shillings in Q4 from 2.90 billion Shillings in the same quarter in 2022.
The bank reported a 1.0% reduction in non-performing loans (NPLs), amounting to 110.1 billion Shillings, compared to 111.1 billion Shillings recorded in the previous quarter. Although Azania Bank's NPL ratio stands at 6.57%, slightly above the regulator's threshold of 5.0%, it represents a decrease from the 7.30% recorded in the preceding quarter.
Azania Bank's other operating expenses increased by 64.5% to 12.48 billion Shillings from 7.54 billion Shillings in a similar quarter the previous year. This rise is attributed to fees and commission expenses and an increased number of employees. Fees and commissions increased to 329 million Shillings in the fourth quarter, compared to 175 million Shillings in the previous year.
Moreover, the bank's workforce expanded to 632 employees at the end of last month, up from 571 in the same period of the previous year. Azania Bank currently operates 25 branches, further solidifying its presence in the financial landscape.