Azania profit slows down in Q2

AZANIA Bank’s net profit has slowed down by almost 30 per cent in the second quarter of this year affected by non-interest income.

The lender’s net profit went down to 5.21bn/- in three months to June from 7.34bn/- in a similar period last year.

The profitability for the second quarter was affected mainly by non-interest income which also sunk by over 30 per cent to 10.79bn/- from 16.13bn/-.

On the other hand, the bank’s financial statement issued yesterday showed that the net income interest increased by 47 per cent to 21.23bn/- from 14.45bn/-.

The bank, among the group of elite lenders with over 1.0tri/- assets, its profit was eaten by non-interest expenses that went up by 25.5 per cent to 18.6bn/- in three months to June from 14.82bn/- in March.

The expenses were pushed up mainly by salaries and benefits that increased by 14.5 per cent to 10.29bn/- from 8.98bn/-.

The salary increase pushed up the number of workers after the lender employed 24 new staff in the three months to June, reaching a workforce of 596 people. The number of branches also went up to 25 from 24 in the quarter under review.

Nevertheless, Azania’s assets grew by 6.5 per cent to 1.63tri/- from 1.53tri/- pushed up by loan activities. The loan portfolio lent out 1.14tri/- at the end of June up from 1.04bn/- at March.

Additionally, the loan book went up, following the surging of deposits to 1.06tri/- from 991.4bn/-. The deposits have crossed the one trillion mark for the first time since inception in 1995.

The total amount of non-performing loans (NPLs) during the quarter declined by 20.6 per cent to 127bn/- from 160bn/-.

The decline of the NPLs volume pushed down the ratio to total gross loans to 10.75 per cent, albeit above the industry benchmark of 5.0per cent, from 14.58 per cent.

The level of NPLs forced the lender to set aside 6.2bn/- in quarter two for impairment losses on loans and advances, which was slightly lower compared to 6.81bn/-.

Azania is a fully-fledged commercial bank, whose formal name was First Adili Bancorp that opened its doors in 1995.

In January 2019, Azania acquired the assets and liabilities of Bank M, a retail commercial bank, which had been under management by the Bank of Tanzania (BoT) since August 2018, on account of ‘critical liquidity problems’ and inability ‘to meet its obligations’.

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