NMB Bank Tanzania, one of the largest banks in the country with total assets of TZS 10.8 trillion as per the Bank's March 2023 Financial Statements, has achieved another remarkable feat. The bank has announced a record-breaking dividend payout of TZS 286 per share for this year, up from TZS 196 per share last year, driven by increased interest income in the year that ended in December.
During the 23rd Annual General Meeting (AGM) held on Friday, shareholders of NMB Bank, one of the top three most profitable banks in the East African Community (EAC) bloc, unanimously approved the new cash bonus. The decision highlights the bank's commitment to rewarding its shareholders and strengthening its position in the industry.
CEO Ms. Ruth Zaipuna expressed her satisfaction with the bank's progress, stating that NMB Bank has improved its Cost-to-Income Ratio (CIR) to an impressive 42 percent in 2022, compared to the previous rate of 46 percent. This achievement places the bank among sub-Saharan Africa's most efficient financial institutions.
The approved dividend will be disbursed on or around June 14, 2023. During a press conference in Dar es Salaam after the AGM, Ms. Zaipuna emphasized that 2022 was an exceptional year for NMB Bank, with significant milestones achieved throughout its 25-year history. Each share earned an additional TZS 93 over the dividend paid the previous year, totaling TZS 193 billion.
Ms. Zaipuna attributed the bank's extraordinary achievements to the successful execution of disciplined strategies and the realization of both financial and non-financial objectives. The remarkable profitability was primarily driven by a surge in interest income resulting from increased lending activities. The bank's alternative service channels also played a crucial role in sustaining growth momentum.
Furthermore, the containment of bad loans and effective management of operational costs contributed to the bank's triumphs in 2022. The impairment charges for loans decreased by 28 percent, from TZS 113 billion to TZS 81 billion, while operating expenses slightly increased by nine percent, aligning with a 21 percent growth in revenue.
NMB Bank continued to demonstrate robust balance sheet growth, supported by strong funding and capital positions. The loan book expanded by 29 percent, reaching TZS 6 trillion compared to the previous year's TZS 4.6 trillion. The deposits base also experienced a 14 percent increase, soaring to TZS 7.6 trillion from TZS 6.6 trillion. As a result, the bank's total assets witnessed an 18 percent growth, surpassing the TZS 10 trillion mark for the first time.
Moreover, the bank significantly improved the quality of its assets, leading to a decline in the non-performing loans ratio from 3.6 percent to three percent. This reduction in risk of losses from borrower defaults further strengthened NMB Bank's financial stability.
Dr. Edwin Mhede, Chair of the NMB Board, highlighted the bank's commitment to both profitability and societal impact. He stated, "In 2022, we not only achieved excellent financial results and continued to make history in terms of profitability but also fulfilled our tax obligations to the government and made significant social investments, touching the lives of people."
NMB Bank's consistent growth, prudent financial management, and dedication to social responsibility position it as a leading bank in Tanzania and contribute to the development of the nation's economy.
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