12 February 2013

Tanzania: Bank of India Suffers Sh634 Million Loss

THE Bank of India (BOI) has suffered a net loss of 634m/- in the fourth quarter of last year, after revenue from both interest and non interest sunk while operating expenses rose.

According to a financial statement published in Dar es Salaam, the bank in a similar quarter 2011 posted a net profit of 121m/-, while interest and and non-interest income plummeted to 392m/- from 432m/- and to 145m/- from 300m/- respectively.

The loss registered in the quarter ending last December, has been attributed not only to shrinking revenues during the period, but also from the fact that the bank set aside 419m/- against 46m/-of December 2011 for bad and doubtful debts.

BOI's expenses during the quarter under review shot up to 752m/- from 520m/- after opening a second branch near central business district in Dar es Salaam during the third quarter last year. The statement shows that the second branch increased the number of workforce from 20 to 27 staff while other expenses increased by 61 per cent to 585m/-.

The bank is a wholly owned subsidiary of the Bank of India, a premier national bank in India, closed the year when its assets growth slowed down by 13.64 per cent to 40.86bn/-. Deposits also went down by 14.88 per cent to 26.37bn/- from 26.53bn/- of 2011 dogging down loans and advances to 7.07bn/- from 10.86bn/- to reduce net interest revenues.

However, the level of loans and advances to total deposits at the end of last year stood at 64.87 per cent while it's nonperforming loans ratio jumped to 6 per cent from 4.69 per cent of 2011. BOI was incorporated in Tanzania in 2007, but started its operations in Dar es Salaam from June 2008.

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