NATIONAL Bank of Commerce (NBC), one of the largest banks in the country, recovered from the red, posting a net profit of 6.41 billion last year, thanks to reduction in bad debts written off.
The bank suffered 5.68 billion loss in 2011 due to bad debts that were written off at the tune of 56.55 billion and a substantial amount set aside for impairment losses of 55.81 billion.
Last year the bank attributed its profit to net interest revenue that increased to 93.3 billion compared to 85.94 billion of the previous year while non-interest and other revenues contributed 55.13 billion and 52.64 billion, respectively.
The bank also managed to cut down expenditure to 128.06 billion from 137.41 billion of 2011, after closing a branch to reduce its workforce by 101 to 1,340. This managed to amplify it profitability level. In last year's second quarter, bad debts chocked the bank to post a huge loss of 20.2bn/- which was the highest since the privatization of NBC and liberalization of the banking sector.
The bank attributed the mid year losses to corporate impairment losses amounting to 13.9 billion and provisions of 13.7 billion raised for cost and under accruals from 2008 to June 2012, relating to technical assistance provided by a parent company abroad.
Last year, however, NBC non performing loans (NPLs) stood at 117.4 billion being 16.8 per cent of total gross loans issued up to the end of last December.
Assets grew from negative 0.36 per cent to 4.33 per cent, translating to 1.508tr/- at the close of the year while deposits also increased from negative 1.77 per cent to 3.49 per cent or 1.266tr/-.
Due to NPLs, the bank restricted its loaning out slightly from 56.9 per cent to 54 per cent equals to 653.01 billion. NBC is one of the oldest banks in Tanzania, marking 45 year of experience in providing financial services. It offers conventional services through an extended branch network and ATMs.