TIB Development Bank has come out of the red zone to post a profit, despite a declining net interest income by three times in three months to March.

The TIB, the largest domes- tic Development Finance Institution (DFI), posted a net profit of 338m/- in March compared with a loss of 5.19bn/- in a similar period last year.

The profit was the outcome of the net income interest that slid three times to 3.54bn/- from 10.50bn/- as the result of de- creasing of lending activities.

In the three months to March, the loans and advances dropped to 444bn/- from 453.19bn/- showing the DFIs reducing its lending pace.

Nevertheless, the lender's non-interest income almost doubled to 785m/- from 474m/-.

However, the bank's total income was eaten considerably by expenses that however decrease minutely to 4.48bn/- from 4.8bn/-.

The bank assets grew down by 0.9 per cent to 612.87bn/- from 618.45bn/- dragged down by balances with other banks and declining leading activities.

Also, total deposits decreased to 303.8bn/- from 321.7bn/-. TIB is one of the lending institutions with highly non- performing loans that stands at 54 per cent for the last six months.

TIB, fully owned by the government, was established in 1970 with the main purpose of financing development with an emphasis on industrialisation of the country.

The economic reforms of the 1990s highlighted the lack of long-term funding as it was not offered by any of the commercial and financial institutions operating in the country at the time.

The government therefore re-designated TIB as DFI in 2005. DFIs are specialised development organisations that are usually majority owned by na- tional governments.

DFIs invest in private sector projects in low and middle- income countries to promote job creation and sustainable eco- nomic growth.