Strong growth fuels banking sector expansion

DAR ES SALAAM: IMPROVED fiscal policies and a positive economic growth trajectory have been identified as key drivers behind the growth of the banking sector in Tanzania.

In a recent interview with the ‘Daily News’ in Dar es Salaam, Diamond Trust Bank (DTB) Chief Executive Officer Mr Ravneet Chowdhury attributed the bank’s strong performance to the country’s favourable business environment.

The bank reported a pretax profit of 58.2bn/- in the third quarter of the previous year.

Chowdhury noted that Tanzania’s economic stability is evident in DTB’s financial performance, which saw the bank issue loans totalling over 1tri/-, a 332 per cent increase compared to the same period in the previous year.

Furthermore, the bank’s assets grew to 1.86tri/-.

Commenting on the country’s economic outlook, the CEO said: “Tanzania’s Gross Domestic Product (GDP) growth remains strong.

During her New Year address to the nation, President Samia Suluhu Hassan said from January to June 2024, the country’s economy grew by 5.4 per cent, compared to 4.8 per cent during the same period in 2023. Mr Chowdhury said this positive trend is driving strong performance across the financial sector.

He explained that the banking sector is experiencing high demand for credit due to both domestic and international investments.

“We are witnessing positive growth in banking, following the upward trend. Our balance sheet is expanding, deposits are increasing and our loan portfolio is growing.

The demand for credit is strong, fuelled by significant local investments and overseas interest. Tanzania is increasingly recognised as a favourable investment destination, which creates ample opportunities for banking services and we are strategically capitalising on this,” he stated.

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In addition to its financial achievements, Chowdhury said that DTB’s commitment to sustainability, aligning with the United Nations Sustainable Development Goals (SDGs).

These goals include eradicating poverty, promoting good health and wellbeing, advancing gender equality and ensuring access to clean water and sanitation.

Other SDGs that the bank priorities are Decent Work and Economic Growth, Responsible Consumption and Production, Life on Land, Partnerships for the Goals and Peace, Justice and Strong Institutions.

“We have made strides in restoring eyesight and providing medical treatments. We regularly organise health camps in collaboration with the Rotary Club, benefiting many individuals. Our sustainability efforts are wideranging, focusing on 8 to 10 key pillars,” the CEO said.

DTB’s Head of Communications, Sylvester Bahati, added that the bank’s sustainability focus also prioritises Climate Action and achieving a Net Zero Strategy (Scope 1 and 2 emissions).

Mr Bahati said that DTB is committed to achieving carbon neutrality by 2030, in alignment with the principles of the Aga Khan Development Network (AKDN), which seeks to improve the quality of life in Asia and Africa.

As part of this initiative, DTB has begun tracking and reporting its Scope 1 and 2 emissions as of late 2023.

The bank also plans to plant 1 million trees by 2030, starting with 10,000 trees in 2024, with an additional 90,000 trees to be planted through partnerships