Learning from success stories in banking community
TANZANIA: THE Bank of Tanzania (BoT) is mandated to licence, regulate and supervise banks and financial institutions, comprising commercial banks, microfinance banks and community banks.
Also in the list, are development finance banks, financial leasing companies, mortgage financing companies, microfinance service providers, credit reference bureaux, bureau de changes and representative offices of foreign banks.
Also, the Bank is mandated to regulate and supervise all financial matters of Social Security Schemes operating in Tanzania. The primary objectives of regulating and supervising banks and financial institutions are to maintain the stability, safety and soundness of the financial system and to reduce the risk of loss to depositors.
Tanzania banking sector recorded strong growth in 2022 and 2023. As of March 2024, 47 licensed banks are operating in Tanzania: 34 commercial banks, four community banks, four microfinance banks, two development banks, one Non-Bank Financial Institution, one House Financing Company, and one Mortgage Refinancing Company. Altogether, in 2022 they had 981 branches and 75,238 bank agents.
The sector remained resilient to internal and external shocks and continued to grow in terms of deposits and assets, supported by a favourable macroeconomic environment and regulatory and supervisory measures.
The major components of the sector’s assets were loans, advances and overdrafts which accounted for 56.5 per cent; investment in debt securities (17.5 per cent); and cash, balances with the Central Bank of Tanzania (BoT), balances with other banks and items for clearing (14.4 per cent); while the remaining assets accounted for 11.6 per cent of total assets.
Uchumi Commercial Bank (UCB) is among the said banks. It recorded a success story in the year 2023 in the sense that its profit was 1.28bn/- that was an increase rated at 12 per cent when compared to 1.1bn/- recorded in 2022. As a result-return on equity increased from 8.86 per cent recorded in 2022 to the same of 10.03 per cent in 2023.
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Revealing this was the Chairman of the Board of Directors of the bank, Mr Wilson Ndesanjo when addressing the 18th Annual General Meeting of shareholders of the bank held at Uhuru Hotel & Conference Centre here in Moshi on Saturday 29th June this year.
Mr Ndesanjo said paid-up share capital increased by 25.2 per cent rising from 10.21bn/- recorded in 2022 to 12.78bn/- in 2023. In the same vein he said return on assets increased from 1.87 per cent in 2022 to 2.33 per cent in 2023 adding that the return on shareholder funds was 9.10 per cent in 2023 while basic earnings per share was 10.08 per cent.
“As on 31st December 29023 UCB paid up capital was 12.78bn/- which is below the minimum requirement by the Regulator (Bank of Tanzania) of 15bn/- to be a fully-fledged Commercial Bank and behind the bank target of 20bn/- by 7.8bn/-” he said.
He further said that in an effort to increase the share capital of the bank shareholders at their Extra Ordinary General Meeting held on 11th December 2023 agreed to increase the capital to 20bn/- by 31st December 2024.
“As a way forward to achieve this target shareholders agreed to allot 8,061,335 shares amounting to 8.061335bn/- by way of Right Issue to all shareholders who were at the register of shareholders by 31st December 2023. The shareholders also resolved to retain 1bn/- from 2023 profit to boost capital “said the UCB Chair.
Concluding his presentations in this meeting he said he was glad to inform shareholders that immediately after that meeting of 11thg December 2023 shareholders were notified of the resolution and positively responded whereby shareholders set a target of reaching a paid-up capital of 15 bn/- before the end of 31st June 2024.
UCB inflation rate declined from 3.2 per cent recorded as on 31st December 2022 to the same of 3.0 per cent recorded as on 31st December 2023. As for the Broad Money Supply this grew by 14.1 per cent in 2023 when compared to 11.6 per cent recorded as on 31st December 2022.
Revealing this was the Chief Executive Officer of the bank, CPA Samwel Wado when presenting his bank performance for the year which ended on 31st December 2023 to the 18th Annual General Meeting of shareholders of UCB held at Uhuru Hotel & Conference Centre here ion Moshi on Saturday 29th June this year.
CPA Wado said his bank profit before tax was 1.42bn/- recorded by the end of 2023 when compared with the same of 999m/- recorded in 2022 an increase rated at 47.8 per cent.
” Total assets were 55.08bn/- in 2023 when compared to 48.48bn/- recorded as on 31st December 2022 reflecting a growth of 13.6 per cent. The annual target of the total assets was 66.7bn/- (82.5 per cent achieved),” he said.
Coming to customers deposits he said the same increased to 40.36bn/- when compared to 35.8bn/- recorded on 31st December 2022 which was an increase rated at 12.7 per cent, adding that as the targeted deposits was 48.8bn/- the same was achieved by 82.7 per cent.
“Loans and advances in 2023 reached 36.31bn/- when compared to 32.46bn/- recorded in the previous year, an increase rated at 11.9 per cent. As the annual loans and advances target was set at 36.96bn/- it means that target was realized by 987.4 per cent,” said the UCB Chief.
Talking on his bank paidup share capital he said this increased to 12.78bn/- compared to 10.21bn/- recorded in the previous year which ended on 31st December 2022 an increase rated 25.2 per cent, adding that as the annual target of paid-up capital was 13bn/- the same was achieved by 98.3 per cent.
“Total revenue stood at 8.31bn/- by the end of 2023 when compared to 7.12bn/- recorded in the previous year, an increase rated at 16.78 per cent. Records are such that the set out revenue target for 2023 was a revenue of 45bn/- implying that the said target was reached by 87.9 per cent” the UCB Chief.
