NMB reports 20pc profit surge

TANZANIA: NMB Bank has posted a robust 20 per cent increase in net profit for the year ending June, reflecting a strong performance despite rising operational costs and higher impairment losses.

Financial statement released last week shows the bank’s net profit reached 314bn/-, up from 262bn/- the previous year.

Total assets grew to 13tri/- marking a 13 per cent increase from 12.4tri/- in the previous year to underscore the bank’s expanding financial footprint and its strengthening balance sheet.

Loans, advances and overdrafts, net of allowances for probable losses, increased by 23 per cent to 8.124tri/-, up from 7.85tri/- to highlight the bank’s expanded credit operations.

Non-performing loans remain relatively low at 2.8 per cent of gross loans. Interest income rose by 18.8 per cent, reaching 665.5bn/- compared to 560.3bn/- last year.

However, interest expenses also surged by 40.6 per cent, climbing to 151.7bn/- from 108bn/-, reflecting increased costs associated with funding.

Impairment losses on loans and advances increased by 24.6 per cent to 50.8bn/- from 40.8bn/-, signaling a higher provisioning for potential loan defaults.

Non-interest income saw a notable increase of 28.7 per cent, reaching 280.5bn/-, up from 218bn/-.

This growth was driven by a remarkable 83.9 per cent rise in foreign currency dealings and translation gains, which jumped to 66.6bn/- from 36.2bn/-.

ALSO READ: NMB: Financial education deficit hinders youth, women in agriculture

Non-interest expenses also rose by 14.8 per cent to 292.7bn/- from 255bn/-.

Despite this increase, the growth in non-interest income helped balance out the higher costs, contributing positively to the bank’s overall profitability.

Customer deposits grew to 8.9tri/- from 8.4tri/-, reflecting continued trust and engagement from the bank’s clientele.

Analysts say overall, NMB’s financial results demonstrate a strong performance with significant profit growth and asset expansion.

While the increase in interest and impairment expenses poses challenges, the bank’s growth in non-interest income and customer deposits provides a solid foundation for future stability and success.