Maendeleo Bank Plc witnessed a remarkable three-fold increase in net profit during the fourth quarter of last year, attributed primarily to a surge in non-interest income, according to the bank's recently released financial statement.
The statement revealed that the bank's net profit soared to 776 million Tanzanian Shillings in the three months ending in December last year, marking a substantial rise from 258 million Tanzanian Shillings reported in the corresponding quarter of 2022.
With assets totaling over 124 billion Tanzanian Shillings as of December, the bank demonstrated robust performance driven by positive growth in non-interest income.
The report indicated a significant increase in non-interest income, which surged by 78 percent to 916 million Tanzanian Shillings from 514 million Tanzanian Shillings recorded in 2022. Foreign currency dealings and fees and commissions played pivotal roles as major revenue drivers.
Foreign currency dealings and translation showed a notable improvement, registering a gain of 18 million Tanzanian Shillings compared to a loss of 2.0 million Tanzanian Shillings in 2022. Similarly, fees and commissions experienced a substantial rise, climbing by 39.2 percent to 546 million Tanzanian Shillings from 392 million Tanzanian Shillings.
However, despite the surge in non-interest income, the bank experienced a slight decline in net interest income during the fourth quarter.
The bank's interest income witnessed a year-on-year decrease of 7.4 percent, falling to 2.65 billion Tanzanian Shillings last year from 2.87 billion Tanzanian Shillings, despite an increase in the loan portfolio.
By the end of last year, Maendeleo Bank had issued loans valued at over 74 billion Tanzanian Shillings, up from 70 billion Tanzanian Shillings recorded in the third quarter ending in September.
Additionally, customer deposits at the bank grew by 5.8 percent to 83.4 billion Tanzanian Shillings in the fourth quarter, compared to 78.8 billion Tanzanian Shillings reported at the end of the third quarter.
Notably, non-performing loans (NPLs) witnessed a significant uptick of 8.0 percent, reaching 3.76 billion Tanzanian Shillings from 3.48 billion Tanzanian Shillings reported in September.
However, Maendeleo Bank managed to maintain its NPLs ratio at 5.0 percent by the end of December, aligning with the Bank of Tanzania's threshold of 5.0 percent.
Furthermore, the bank's non-interest expenses increased to 2.27 billion Tanzanian Shillings from 2.01 billion Tanzanian Shillings reported in the corresponding period of the previous year, driven by escalated salaries and benefits.
According to the statement, salaries and benefits surged by 19.8 percent to 997 million Tanzanian Shillings from 832 million Tanzanian Shillings reported in a similar period in 2022, largely due to the increased number of staff, which rose to 119 by the end of December last year, compared to 114 in the previous year.
Moreover, the bank's branch network expanded to 30 branches from the 10 recorded in 2022, indicating its commitment to broader accessibility and service expansion.