National Microfinance Bank Plc. (“NMB”) has recorded a 2.4% increase in profit after tax (PAT) for the year ended 31 Dec 2016.
The NMB Managing Director – Ineke Bussemaker says that despite the challenging macroeconomic environment, NMB was able to deliver a good performance.
“The bank’s net profit increased from TZS 150.3 billion in 2015 to TZS 153.7 billion in 2016. The growth is attributed to an increase in the Bank’s operating income which rose by 16%.” Said Ms Bussemaker
The bank’s interest income grew from TZS 438.7 billion in 2015 to TZS 551.0 billion in 2016 which is equivalent to a 25.6% growth. The bank’s total assets grew by 8% from TZS 4,580 billion in 2015 to TZS 4,951 billion in 2016. Loans and advances to customers rose to TZS 2,794 billion, a 13% increase from TZS 2,482 billion in the previous year. The loan growth was mainly driven by a growth of Salary Worker Loans which rose by 16% from the prior year to TZS 1,698 billion.
Amidst the liquidity crunch experienced by many banks in 2016, asset growth was funded by a TZS 172 billion increase in customer deposits and TZS 312 billion growth in borrowed funds as well as the NMB Retail Bond which raised TZS 41 billion. As a result, interest expenses grew by 49% from TZS 68.5 billion in 2015 to TZS 102.2 billion in 2016.
“Customer deposits that are largely comprised of non-interest earning accounts rose by 4.8% from TZS 3, 568 billion in 2015 to TZS 3,737 billion in 2016.” She said
“A number of our clients were adversely affected by the business climate in 2016, consequently this impacted the loan book quality which deteriorated to an NPL ratio of 4.8% in 2016 from 2.4% in 2015.” She said
With 20% market share in both loans and deposits, NMB has the 2nd largest balance sheet in the industry. For the 10th year in a row, NMB remains the most profitable bank in the country.