Defying all odds in a competitive banking market which has witnessed more than five banks close shop or get acquired by stronger peers in the second quarter of 2019, the bank sustained its profit making momentum by posting a 98 percent pre-tax profit.
Nsekela who took over as CRDB Group’s Managing Director in October last year, said in Dar es Salaam last week that pre-tax profit jumped to 86.65bn/- which translates to 98 percent increase compared to 43.85bn/- made during the same period last year.
He attributed the impressive performance to improved business practices, coupled with strategic investments in government securities and also increased earnings from foreign currency trading.
“Our focus on operational efficiency and sales optimisation is paying off. We are witnessing a rebirth of CRDB Bank, buoyed by strong business fundamentals and a refined offering, as you can see, our earnings from foreign currency dealings have significantly increased showing our commitment in serving each segment in the market,” the group’s CEO said.
He affirmed that the bank’s continued pursuit for business excellence portends to an even greater financial performance in the second half of this year. “We are focusing on the customer and this means that we are re-engineering our products and services to respond to the changing needs in marketplace,” added Nsekela, one of the youngest CEOs to lead a Tier 1 bank in the market.
Among key highlights during the period included maintenance of a strong balance sheet with the group’s total assets appreciating by 8 percent to 6.38trn/- from 5.93trn/- reported in the first quarter of the year.
Group loan portfolio witnessed a slight positive change to close at 3.18trn/- which accounted for an increase of a percent from 3.16trn/- made over the same period of time.
“Our total customer deposits increased by 15 percent 4.95trn/- from 4.32trn/- reported in quarter one of 2019, while net interest income increased by 30 percent to 258bn/- from 198bn/- reported in June 2018,” Nsekela added.
During the period, the Dar es Salaam based lender also continued to dominate the domestic market commanding a 22 percent share of deposits thanks to its network of 238 branches, 553 ATMs, 556 Point of Sales terminals and 10,064 agents spread across the country.
The bank’s market dominance can also be attributed to strong digital banking investments with platforms such SimBanking and SimAccount being favourites among consumers because of their convenience. CRDB also has a reliable Internet banking service.
Nsekela who led the bank to a pre-tax profit growth of 77 percent to over 64.1bn/- last year against 36.2bn/- made in 2017, has cultivated confidence among staff members, shareholders and government officials as being good for the top job left by veteran banker, Dr Charles Kimei who retired in October last year.
The CEO of East Africa’s third-largest lender had promised shareholders, regulators and fellow staff members of sustained growth under his leadership which attracted Finance Minister, Dr Philip Mpango who told shareholders during this year annual general meeting that growth is imminent.
“Due to a number of measures taken by the government through Bank of Tanzania, interest rates have reduced by 0.62 percent to 16.38 percent by February this year while banks lending to the private sector grew by 7.3 percent during the same period,” Dr Mpango said.
Dr Mpango commended CRDB management and shareholders for doing very well in the market pointing out that during the first quarter of this year, the bank’s profit grew by 216 percent to 30.7bn/- from 9.7bn/- during a similar period last year.
“Because of its good performance, the price of CRDB Bank’s shares at Dar es Salaam Stock Exchange has increased by 4 percent from 125/- to 130/- each by April this year,” he added while pointing out that the bank’s profit this year is set to increase significantly hence benefitting both its shareholders and Treasury through tax payment.
Speaking at the AGM, CRDB Board Chairman, Ally Laay said the bank which is jointly owned by the public with 43 percent, Treasury with 21 percent and 10 percent owned by pension funds, has continued to perform impressively in the market.
“Because of our good performance in the market, the bank has been paying dividend annually to its shareholders because of profits made from banking business we do,” he added. The Board Chairman further pointed out that the bank has a policy on dividend payment whereby 30 percent of the profit is allocated annually.
“Last year, we paid Treasury 19.5bn/- as divided for the government’s 21 percent shares it owns at CRDB,” Laay noted while promising to pay more this year as the bank’s performance continues to improve.