The CRDB Bank yesterday gave 6.78bn/- dividend to the government out of 9.9bn/- issued to its shareholders - namely institutions, councils and cooperatives countrywide.
A dividend cheque was handed over to Minister for Finance and Planning, Dr Philip Mpango, who wanted other entities to follow suit.
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, shares of stock or any other property.
They may be issued in various timeframes and at payout rates. 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.
He called upon all institutions in which the government owned shares to give 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 high services as it was key to their
continued market share control. The minister said of late he had been receiving complaints from customers that some banks had been debiting their money without their consent.
"I have directed the Bank of Tanzania (BoT) Governor to look into the complaints and take proper measures, but I am happy that CRDB Bank is not among the banks being complained of," said Dr Mpango.
He also called upon district and municipal councils, which were not CRDB Bank shareholders to learn from their authorities, which received dividends for their investment.
Dr Mpango said it was high time for the banks in the country 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 Rural Development Bank - then wholly owned by the government - it went into a crisis that almost led to its bankruptcy.
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 dividends and invest in other income generating activities or keep them in CRDB.
Initially, the government owned 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 few Tanzanians had such a culture as a result the majority of shares floated were owned by foreigners. Mr Laay said according to statistics Tanzanians, who owned shares at DSE did not exceed 500,000 while opportunities were many.
The bank chief executive officer, Mr Abdulmajidi Nsekela, said they were well-planned to ensure they kept serving their customers and remained on top in the banking industry.
Meanwhile, the NMB Bank is expected to issue 33bn/- dividend 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/- dividend and this year’s increase came after an increase in the payment per share.
The dividend per share has increased by 3 per cent, whereby the bank this year pays 66/- per share up from 64/- per share paid last year.
“The intention is to increase the dividend per share over time as the bank’s performance continues improving,” said Mr Albert Jonkergouw, the bank’s interim managing director, when briefing reporters on the sidelines of the meeting.