TADB posts impressive profit in Q3

DAR ES SALAAM: Tanzania Agricultural Development Bank (TADB) posted impressive financial results in the third quarter this year attributed to substantial increase of interest and non interest incomes.

During the quarter under review, TADB posted a pre-tax profit of 4.88bn/- which is an increase of 28 per cent, compared to 3.81bn/- recorded in the same period last year.

TADB Finance Director Dr Kaanaeli Nnko said in Dar es Salaam on Tuesday that the growth in pre-tax profit was underpinned by substantial increase of interest and non interest incomes.

He noted that TADB posted a 26 per cent year-on-year increase in net interest income, which climbed to 10.94bn/- in Q3 from 8.66bn/-in the preceding period.

“The rise in interest incomes is contributed by the expansion of lending activities within the agricultural sector and the effective management of interest-earning assets,” he said.

Non-interest income also experienced a commendable surge to 1.52bn/- marking an 18 per cent increase compared to the corresponding period in 2022.

The growing lending activities played a pivotal role in the impressive 18 per cent growth of non-interest income in Q3.

According to Dr Nnko, on a year-to-date basis, the bank’s profit before tax reached 12.34bn/- underscoring its financial efficiency within the ever-evolving financial landscape.

This achievement highlights TADB’s ability to generate sustainable profits while steadfastly adhering to its core mission of bolstering the agricultural sector.

Dr Nnko said loans and advances surged by an impressive 94.7bn/- (a 36 per cent increase) this year, reaching 358.56bn/- by the end of Q3.

“This surge solidifies the bank’s unwavering commitment to providing vital financial support to farmers, agribusinesses and various stakeholders across Tanzania,” he noted.

A remarkable improvement can be observed in asset quality, with the Non-Performing Loan (NPL) ratio in this year’s third quarter improving to 4.58 per cent, a positive trend compared to the 5.47 per cent reported in Q2.

This figure comfortably falls below the Bank of Tanzania’s threshold of 5.0 per cent underscoring TADB’s robust risk management practices and its solid financial standing.

“This achievement reflects a healthy expansion of lending activities while maintaining favourable asset quality,” he added.

The TADB’s operational expenses for Q3 amounted to 5.60bn/-representing 37 per cent increase from the 4.09bn/- recorded in the same period last year.

These figures reflect the bank’s continuous investment in enhancing its capabilities and services.

TADB’s most outstanding milestone is the substantial growth in its total assets, now surpassing half a trillion shillings, reaching 535.25bn/-.

“This significant growth not only strengthens the bank’s capacity to support the agricultural sector but also solidifies its position as a prominent player in the financial market,” he noted.

On her part, the TADB’s Acting Director of Credit and Business, Afia Sigge said that in the third quarter, the bank issued 61.88bn/- as loans in the agriculture, livestock and fishing sectors in the country.

She said of the 61bn/- disbursed to farmers, 40.23bn/- was disbursed for the purchase of inputs and costs of agricultural operations.

She said a total of 19.23bn/- was borrowed for the cost of construction of agricultural projects. Also a total of 1.22bn/- were borrowed from irrigation projects, while 1.19bn/- was borrowed for the purpose of purchasing livestock, modern agricultural materials and warehouse construction.

On his part, Smallholder Credit Guarantee Scheme (SCGS) Manager George Nyamrunda said the credit facility one of TADB’s flagship initiatives continues to make substantial progress.

The bank’s collaboration with 16 participating financial institutions (PFIs) has extended its reach to beneficiaries in 27 regions and 127 districts, with a total disbursement of 228.26bn/-.

“These results vividly illustrate the positive impact of this initiative on smallholder farmers and agricultural entrepreneurs nationwide, he said.

As TADB celebrates its eighth anniversary, these remarkable results underscore the resilience of its business model and its proven ability to transform the agricultural sector, solidifying its position as a key player in shaping the financial landscape and fostering growth and development.

The third quarter results bring the total number of farmers reached by TADB to 1,762,400 beneficiaries, in 27 regions and the districts 124.