Milestone as CRDB springs wings beyond Africa

DAR ES SALAAM: THE Bank of Tanzania (BoT) has issued a No Objection Certificate (NOC) to CRDB Bank Plc for its plans to expand operations beyond Africa, citing the bank’s financial stability and performance.

BoT Governor Dr Emmanuel Tutuba confirmed on Wednesday that the Bank of Tanzania has granted CRDB permission—the first of its kind in the Central Bank history—to invest outside Africa, citing the bank’s substantial financial resources.

“BoT gave the go-ahead to invest abroad based on CRDB’s capital and the financial strength reflected in their 2023 financials,” said Dr Tutuba.

Last year, CRDB, listed on Dar es Salaam Stock Exchange (DSE) that total assets were 13tri/-(5.055 billion US dollars), deposits were 8.9tri/-, loans 8.5tri/- and profit after tax 424bn/-.

“This is CRDB’s strategy to seek new markets, deposits and capital from new stakeholders to invest in countries and facilitate financial transactions between Tanzania and trading partner countries,” the Governor said.

CRDB will be the first bank in East Africa to establish a subsidiary outside the continent, which is a significant historical milestone for Tanzania. CRDB Group CEO and Managing Director Abdulmajid Nsekela told the Daily News that they hailed central bank decision to trust the largest lender in the country to invest overseas based on their stellar performance over the years.

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“We thank the regulator [BoT] for trusting us and granting the certificate based on our strong performance,” Mr Nsekela said. “This is a preliminary strategy, and once the process is complete, we will inform the public of the country where we will establish the subsidiary”. While international investment is vital, President Samia Suluhu Hassan said that domestic efficiency must be prioritised. “Investment abroad will make more sense if Tanzanians have connections and efficiency in these institutions within the country; we should first show productivity at home,” President Samia said.

For CRDB, Dr Hilderbrand Shayo, an economistcum-investment banker, said this NOC highlights that, in addition to the earlier license granted for operations in Burundi and DR Congo, the banking sector in the country is demonstrating growth in stability and capital base.

This also indicates that the bank can now diversify its investment to take opportunities outside Tanzania boarders.

“As Tanzania expands its trade relations globally, it will facilitate easier trade and transactions for businesses using CRDB as their primary bank. “This development will simplify trading among merchants and support Tanzania’s mission to extend its influence in the regions where CRDB opens new branches,” Dr Shayo said.

Lilian Nguma, a small business owner in Dar es Salaam, said she was pleased that Tanzania is now taking the initiative.

“This is excellent news. We have seen banks from other African countries establishing branches outside the continent…thanks for government initiative to opening up the country,” she said Recently, in a working session of chairpersons and heads of public institutions under the Registrar of Public Assets, Nehemiah Mchechu, the Managing Director and CEO of CRDB Bank, outlined his strategy for investing outside Africa. Decisions by State Owned Enterprises (SOEs) to invest in foreign markets not only increase capital, growth and profitability but also contribute to improving local services and enhancing customer service culture.

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One of the resolutions from the forum, read by Mr Nehemiah Mchechu, was that in implementing the concept of foreign investment, institutions should have strategies to strengthen domestic performance through operational and management reforms that will enable them to compete outside Tanzania.

CRDB will now be the first bank from Tanzania to expand beyond the African continent, joining a few banks from other countries such as Nigeria, Ghana and South Africa (ABSA).

These banks have subsidiaries outside Africa, including Dubai, United Arab Emirates (UAE), London and New York. In August 2016, the international investment analysis firm Moody’s awarded CRDB Bank a B2 rating (solid growth), making it the first bank in the country to receive that rating.

CRDB Plc is among the top five banks generating significant profits in East Africa.