In a remarkable financial performance, Tanzania Agricultural Development Bank (TADB) has announced a significant 47% increase in net profit for the third quarter of this year, citing a surge in net interest income as a key driver. The bank's financial statement, released yesterday, revealed that net profit rose to 3.94 billion Tanzanian shillings in the three months ending September, compared to 2.66 billion shillings in the same quarter last year.
This impressive growth is attributed primarily to the remarkable increase in net interest income, which surged by 16.8% to 9.63 billion shillings in Q3, up from 8.24 billion shillings during the same period last year. The statement highlighted that this rise was fueled by a substantial increase in loans issued by the bank, amounting to 358 billion shillings at the end of September, up from 317 billion shillings recorded in the previous quarter ending June. Moreover, TADB experienced a notable uptick in non-interest income, which climbed by 25.2% to 1.52 billion shillings from 1.21 billion shillings. This boost was attributed to successful foreign currency dealings and translation gains, which doubled to 119 million shillings from 54 million shillings in the corresponding period last year, compensating for a slight decrease in the bank’s fees and commissions.
Despite this positive growth, the bank's commissions and fees experienced a marginal decline of 2.27%, decreasing to 429 million shillings from 439 million shillings in the comparative quarter of the previous year. Additionally, TADB managed to maintain its Non-Performing Loans (NPLs) at a satisfactory level, with a slight 2.68% decrease from 17.3 billion shillings at the end of June to 16.8 billion shillings. The NPLs ratio remained stable at 5.0%, meeting the regulatory threshold.
However, the bank’s operational expenses saw a notable increase, rising by 32.1% to 2.82 billion shillings from 1.91 billion shillings. This rise was primarily driven by higher expenditures on salaries, benefits, fees, and commissions. Salaries and benefits surged by 28.2% to 2.69 billion shillings from 2.10 billion shillings, while fees and commissions experienced a modest 6.25% increase, reaching 85 million shillings from 80 million shillings in the previous year.
This increase in operational expenses was attributed to the bank’s decision to expand its workforce, with the number of staff growing to 110 at the end of last month from 104 in the same period last year, despite maintaining the same number of branches. TADB operates through five zonal offices, strategically positioning itself for continued growth and success in the future.