Minister receives 6.7bn/- in CRDB Bank dividends

17Jun 2019
Polycarp Machira
The Guardian
Minister receives 6.7bn/- in CRDB Bank dividends

THE government has appreciated the CRDB Bank for payment of 6.78billion/- in dividends to the government out of the 9.9 billion/- issued to its shareholders among them institutions, councils and cooperatives countrywide.

Minister for Finance and Planning, Dr Philip Mpango.

Speaking while receiving the dividends, the Minister for Finance and Planning, Dr Philip Mpango, urged other organizations to follow suit, saying it is through such financing that the government gets money.

The government owns a 21.5-per cent stake in the bank. Dividends are corporate earnings that companies pass on to their shareholders. They can be in form of cash payments, stock shares or any other property.

During the event, Dr Mpango spoke of the hassles he had been going through, when negotiating for loans to finance development projects in the country. “It is always not easy to access finances from other institutions in terms of loans but it is quite encouraging to see what our own institutions contribute to government coffers,” he said.

He called upon all institutions in which the government owns shares to pay out dividends to the government on time. He assured the CRDB Bank that the money would be directed towards development projects.

Dr Mpango used the occasion to advise Tanzanians to develop a culture of buying shares in capital markets and the stock exchange, saying it was a good investment. He insisted on the bank to strive for better services as it was key to maintaining and widening their market share. Of late the minister was receiving complaints from customers that some banks were debiting their money without their consent, he stated.

He said he had directed the Governor of the Bank of Tanzania (BoT) to look into the complaints and take proper measures, “but I am happy that CRDB Bank is not among the banks being complained of.”

He also called upon district and municipal councils, which are not CRDB Bank shareholders to learn from their peers, who received dividends for their investments.

Dr Mpango said it was high time for banks to go for customers instead of waiting for them to follow them as there were a lot of untapped opportunities.

In 2017 the government received 19.5bn/- from CRDB Bank as part of the state’s investment in the country’s largest local lender.

In 1996 CRDB Bank was operating as the Cooperative and Rural Development Bank - then wholly owned by the government. It went into a crisis that almost led to its bankruptcy as money flowed out into newly founded private commercial banks, and its salary bill was too high, etc.

To improve its situation, the government entered into an agreement with Denmark and in the process, they agreed to establish DIF.

However, throughout the fund’s existence the government never took its dividends because it continued supporting the bank to grow.

The government will continue receiving its dividends until 2021 before coming to a decision in 2022 on whether to withdraw all its shares and invest in other income generating activities or keep them in CRDB.

Initially, the government had 30 per cent of the shares, but when the bank was listed at the Dar es Salaam Stock Exchange (DSE) some of the shares were offloaded to members of the public.

Earlier, CRDB Bank Board Chairman Ally Laay called for a special awareness programme to members of the public to develop a culture of buying shares listed in stock exchange markets.

He said only a few Tanzanians had such a culture, and as a result the majority of shares floated were taken up by foreigners. Laay noted that statistics show that Tanzanians who own shares at DSE are less than 500,000 while opportunities were many.

The bank chief executive officer, Abdulmajid Nsekela, said they were well-planned to ensure they keep serving their customers and remained on top in the banking industry.

Meanwhile, the NMB Bank is expected to issue 33bn/- in dividends to its shareholders including the government, after the bank’s annual general meeting endorsed the amount in Dar es Salaam yesterday.

Last year the bank’s shareholders approved 32bn/- dividends and this year’s increase came after an increase in payments per share.

The dividend per share rose by three per cent, whereby the bank this year pays 66/- per share up from 64/- per share paid last year.

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