The Tanzania Agricultural Development Bank (TADB) has seen a significant surge in its net profit, marking a remarkable 47% increase during the third quarter of this year. This surge in profit has been primarily attributed to an increase in net interest income.
According to the financial statement recently released by TADB, the net profit for the three months ending in September skyrocketed to TZS 3.94 billion, compared to TZS 2.66 billion reported during the same period last year.
TADB, which boasts assets worth over TZS 535 billion until the end of last month, has showcased robust financial results, driven by substantial growth in interest income.
The report revealed that net interest income experienced a notable upswing of 16.8%, reaching TZS 9.63 billion in the third quarter, as opposed to TZS 8.24 billion recorded during a similar period in the previous year.
This substantial increase in net interest income can be attributed to the surge in loans issued by TADB, which reached TZS 358 billion by the end of September, compared to TZS 317 billion at the close of June.
Additionally, non-interest income exhibited a remarkable growth of 25.2%, soaring to TZS 1.52 billion from TZS 1.21 billion, thanks to foreign currency dealings and translation gains.
Foreign currency dealings and translation gains increased twofold to TZS 119 million from TZS 54 million during a similar period in the preceding year, despite a slight decrease in the bank's fees and commissions.
TADB's commissions and fees experienced a minor dip of 2.27%, declining to TZS 429 million from TZS 439 million during the comparative quarter of the previous year.
Furthermore, TADB reduced its non-performing loans (NPLs) by 2.68%, dropping from TZS 17.3 billion reported at the end of June to TZS 16.8 billion. Nevertheless, it is worth noting that the NPL ratio remains above the benchmark set by the Bank of Tanzania (BOT), which is 5.0%.
On the operational front, TADB saw a notable increase in its operating expenses, which surged by 32.1% to TZS 2.82 billion from TZS 1.91 billion. This increase was primarily driven by rising costs in salaries and benefits, as well as fees and commissions.
Salaries and benefits witnessed a substantial increase, rising to TZS 2.69 billion from TZS 2.10 billion, reflecting a growth rate of 28.2%. Additionally, fees and commissions experienced a slight uptick of 6.25%, reaching TZS 85 million from TZS 80 million reported last year.
The increment in operating expenses can be attributed to the expanded workforce, which grew to 110 employees by the end of last month, compared to 104 during a similar period in the previous year, despite maintaining the number of branches. TADB currently operates from five zonal offices.
These financial results demonstrate TADB's continued commitment to its mission of fostering agricultural development in Tanzania, despite the challenges posed by the economic landscape. The bank remains focused on its strategic goals and further strengthening its position in the financial sector.