DAR ES SALAAM: TIB Development Bank has marked a significant turnaround, emerging from a period of financial strain to report a net profit of 5.6bn/- for the quarter ending June.
This represents a striking reversal from the 2.5bn/- loss recorded in the same quarter of the previous year, signaling both a robust recovery and promising future prospects for the government-owned institution.
The bank's latest financial statement, unveiled last week, highlights a substantial improvement in both interest and non-interest income.
Net interest income surged by 37.8 per cent to 13.5bn/-, up from 9.8bn/- a year ago, driven by increased lending activity and favorable shifts in interest rates.
This growth reflects strategic enhancements in the bank's lending operations and investment portfolio.
Non-interest income also saw a notable rise, climbing from 2.9bn/- to 8.5bn/-, largely attributed to successful foreign currency dealings and significant translation gains. These figures underscore the bank's ability to navigate currency fluctuations effectively and capitalise on foreign exchange opportunities.
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In terms of lending, the bank's loans, advances and overdrafts increased to 343.5bn/- in the quarter ending June 2024, up from 319.5bn/- a year earlier, highlighting robust growth in this segment.
Meanwhile, impairment losses on loans and advances fell to 6.2bn/-, down from 8.7bn/-, indicating improved asset quality.
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Bad debts written off also decreased markedly to 14m/- from 102m/-, reflecting enhanced credit risk management.
Despite a rise in non-interest expenses to 10.2bn/-, up from 4.9bn/- and other operating expenses climbing to 7bn/- from 1.8bn/-, the bank managed to keep salary and benefits expenses stable at 3.15bn/-.
The reduction in the workforce to 135 employees from 149 suggests enhanced operational efficiency.
The bank's basic earnings per share (EPS) improved significantly to 19 from a negative 11, with return on average total assets (ROA) rising to 1.2 per cent from a negative 1.1 per cent.
Return on average shareholder funds (ROE) also increased to 4.9 per cent from a negative 5 per cent, reflecting a stronger overall financial performance.
The ratio of non-interest expense to gross income rose to 39.6 per cent from 30.2 per cent reflecting increased operational cost or reduced cost efficiency
Net interest income to average earning assets ratio improved to 2.5 per cent from 1.9 per cent, showcasing the bank's enhanced income generation capacity.
Industry experts attribute the bank's success to its strategic efforts in optimising financial operations and leveraging currency market opportunities.
Looking ahead, TIB Development Bank's leadership is poised to continue leveraging its recent achievements while addressing ongoing economic challenges.
The bank's ability to sustain and build upon its recent performance will be closely monitored by both government stakeholders and market analysts.
