Dar es Salaam — The Bank of Tanzania (BoT) has extended administration of Bank M for 60 more days, it has been announced, today, November 7, 2018.
A statement from the central bank said the process to determine options for the continued operation of Bank M was incomplete.
"Accordingly, the Bank of Tanzania wishes to inform the public that the process of determining resolution options has not been completed thus extends administration of the bank for a period of 60 days effective 2nd November 2018."
In the statement, BoT assured the public that it will continue to protect the interests of depositors and maintain stability of the banking sector.
Bank M was placed under administration in early August after the authorities said it had failed to meet some of its financial obligations.
The decision to place Bank M under administration came as a surprise then as the bank had been viewed as one of the premier financial institutions in the market.
Following the takeover, BoT suspended normal business operations of the bank for a period of 90 days.
Bank M had been a profitable entity for nine of the 11 years that it has operated in the country before the closure caught many of its clients off guard.
As a corporate and investment bank, Bank M was largely involved with the issuance of loans to large companies while mobilising deposits from both individuals and corporate bodies.
The business model paid off and the bank, which received its commercial banking license from the BoT in February 2007 before opening for business in July of the same year, made losses only during the first two years of its operations.
By the end of 2016, the bank's assets had reached Sh1.05 trillion while its annual net profits ballooned to Sh16.6 billion.
But in unexpected turn of events, that profitable nature started to change. During the year ending December 2017, Bank M's profit declined to Sh12.14 billion.
Its net profit plunged to a measly Sh1.3 billion during the first half of 2018, from Sh8.5 billion during a similar period in 2017.