Tanzania’s Banking Sector is booming. The Commercial and non-commercial banks’ net profits rose by about Tsh. 400 billion last year to a record of Tsh 1.16 trillion for the first time in Tanzania’s banking history, thanks to the government’s pro-business policies.
Financial statements released show that there was a massive record net profit of over Tsh. 1.164 trillion in 2022 compared to Tsh. 760 billion that was registered in 2021. The analysis focused on first-tier Lenders which together account for over 95% of profitability including NMB Bank plc, CRDB Bank plc, Standard Chartered Bank, NMB Bank, Exim Bank, Absa KCB Bank, Stanbic Bank, Peoples’ Bank of Zanzibar, Citibank, Azania Bank and DTB.
Other profitable banks that were randomly picked to complete the list of 17 lenders on The Citizen’s analysis, were Equity Bank (which jumped from a loss in 2021 to record a net profit of Tsh 9.54 billion in 2022), Tanzania Agricultural Development Bank (TADB), Bank of Africa (BOA), Maendeleo Bank and Mkombozi Bank among others.
The massive rise in profitability - coupled with a reduction in levels of Non-Performing Loans (NPLs) and an increase in both customers’ deposits and loans and advances among other performance parameters – comes as a massive improvement from what the sector experienced between 2016 and 2017 when it [the sector] grappled with a squeezed liquidity in the market. As a result, in 2017, the entire sector registered a combined net profit of Tsh. 286 billion.
NMB Bank’s Chief Executive Officer, Ruth Zaipuna said its annual net profit growth of 46.8% was the outcome of several factors, including a business-friendly environment that is supported by government’s policies that reflect the strong performance momentum NMB has had in the last four years and the impact of its service excellence and corporate giving agenda on people’s lives and productive activities.