Tanzania: What NMB Historical Records Entail in Banking Sector

NMB Bank set new records last year after posting the highest and historical profit in the banking industry with approximately 22 per cent of the market share in both loans and customer deposits.

This ultimately made NMB bank to reach the new heights in the banking industry as the bank with largest balance sheet in the country.

It is as saying that NMB beat the odds during the year marred with the outbreak of the global pandemic that saw most of the banking operations and other economic activities globally slowing down and elsewhere came to standstill due to the efforts put by governments to combat the effects of the Covid-19.

However, NMB bank and the banking industry in Tanzania made its way to growth though at different levels which is a testament of the prudent measures taken by the government through the Bank of Tanzania (BoT) to make sure that banking sector remains resilient and continue to contribute to economic growth.

For example, BoT reduced the Statutory Minimum Reserves (SMR) from 7 per cent to 6 per cent in June last year, slashed discount rate from 7 per cent to 5 per cent, reduced haircuts on treasury bills from 10 per cent to 5 per cent and 40 per cent to 20 per cent on treasury bonds.

Also, BoT permitted regulatory flexibility on loan restructuring where financial institutions were allowed to discuss loan restructuring with borrowers.

For mobile money operators, BoT increased daily transactions limits for mobile money customers to 5m/- from 3m/- as well as daily balance amounts to 10m/- from 5m/- for mobile money platforms.

It is during this year under review that NMB bank posted 45 per cent increase in profit after tax to 205.5bn/- from 142bn/- posted while profit before tax jumped to 295.4bn/- from 211.1bn/- in the previous year, respectively.

According to the bank, the outstanding performance is attributed to the huge investment in technology that helped to grow operating income and enhanced operational efficiency in customer experience and cost efficiency.

For example, the bank's financial statements show the bank's operating income grew by 15 per cent and cost efficiency measures that contained operating costs at a marginal increase of only 2 per cent Year on Year.

It can be noted that the impressive results from the current largest lender in the land implies the resilience and attraction of the country's economy although the world continues to grapple with the pandemic.

Commenting on the bank's financial statement recently, NMB Bank Plc Chief Executive Officer, Ms Ruth Zaipuna, "This year (2020), despite the global uncertainties in the wake of a global pandemic, we delivered a record-setting performance with strong stakeholder support, operational excellence, and solid strategy execution. The market at large tremendously benefited from the unprecedented monetary and fiscal support by our Central Bank and the Government. This in turn led to our profits reaching all-time high," However, showing her ambition and desire to do much better, the bank's CEO said further that we certainly do not think this is as good as it can be.

We continue to see opportunities across the market and going forward we aim to strengthen our customer relations through further development of remote channels, taking advantage of advanced data analytics and personalization of range of products and services offered.

We would like to thank our customers, shareholders, the government, the Bank of Tanzania (BoT), our strategic partners and our dedicated staff for their continued support and partnership with NMB Bank."

During the year under review, the bank's strategic push for high efficiency on operations and digital channels led to increase in non-funded income by 19 per cent to 266bn/- from 224bn/-in 2019 driven by bank's focus on digital offering, while interest income increased by 13 per cent to 713bn/- from 632bn/- in the preceding year.

The bank has 226 branches, over 8,000 Agents (Wakala) and more than 800 ATMs across the country and is represented in all districts of Tanzania.

Confirming the bank's growing reputation as an economic development financier, from 3.5tri/- in the previous year as the bank continued to extend credit to the private sector.

The overall, customer deposits rose by 7 per cent to 5.2tri/- from 4.9tri/-in the previous year highlighting customers' continued trust and confidence to the NMB Bank.

Alongside this financial achievement, the Bank has also received a number of awards which is implying the growth trajectory of the institution.

For example, NMB's achievements led to internationally acclaimed recognition as the Safest Bank in Tanzania by Global Finance magazine, and being named Best Bank in Tanzania for 8th consecutive time by Euromoney magazine.

NMB Bank was also awarded as the Best Blended Finance Partner in Africa for banks working with International Finance Corporation (IFC) of the World Bank Group in 2019. Also, the Best Retail and Best Commercial Bank in Tanzania by the Banker East Africa Magazine in 2018

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