CRDB Bank Maintains Positive Performance Streak as Q3 Pre-Tax Profits Soar to Sh170 Billion
During the quarter, the Group made an after-tax profit of TZS 120 billion from its operations, compared to TZS 92 billion reported in the same quarter in 2019.
By: Chatter Media Ltd
Group CEO & Managing Director Abdulmajid Nsekela attributes the sustained positive growth to proactive strategies that have steered the Bank Group in the wake of an unprecedented pandemic that has adversely impacted various sectors of the economy. "We have not relented in our quest to pursue economic transformation because we know that despite the challenges in the market, our resilience is what will make the difference,"
During the quarter, the Group made an after-tax profit of TZS 120 billion from its operations, compared to TZS 92 billion reported in the same quarter in 2019. The jump was mainly driven by increased interest income as a result of growth in the loan portfolio, non-funded income (such as debt and equity) and cost containment.
Nsekela reckons that the Group's decision to support its customers during the pandemic implied the adoption of innovative solutions for customer, which have returned good tidings. He says the Bank focused on providing solutions to minimize disruptions through creating conveniences that proven instrumental in the recovery and continuity of business activities. "We have elevated our interactions with customers and accelerated our digital offering, supported by a robust system infrastructure, which has ensured service availability and seamless integrations,"
The Group's key performance indicators remained steady with positive growth of the balance sheet, generally characterized by improved incomes. Total income grew by 11% quarter-on-quarter from TZS 202 billion to TZS 225 billion, attributed to a gradual recovery in revenue generation following the COVID 19 outbreak. Cumulatively, the total operating income registered a 9% YoY growth from TZS 577 billion in September 2019 to TZS 630 billion as at the end of September 2020. Interest income for the quarter was TZS 513 billion compared to TZS 478 billion reported in the third quarter of the year 2019. The 7% increase is contributed by notable growth in loans - Corporate 9%, Personal 19% and SME 11%. The Group's total loan portfolio grew by 15% to TZ 3.7 trillion from TZS 3.3 trillion reported in the same period last year. Quarter on quarter growth was however slow with a paltry 3% growth, owing to market uncertainties.
"We managed to achieve a delicate balance between sustaining our business, scaling capacity, and helping customers – particularly SMEs – stay afloat as they try to manage their cash flow in the face of supply chain challenges and, decreased customer demand," Nsekela explains.
During the quarter under review, the Group's cost to income ratio declined by 2.4% to 60.8 from 63.2% reported in June 2020. Group Chief Financial Officer (CFO), Frederick Nshekanabo attributes the improved CIR to a raft of cost management initiatives, which have been adopted in line with the strategic direction towards sustainability.
"We have a particular focus on cost efficiency and employee productivity, which we reckon to have a net impact on our long-term growth," Nshekanabo says.
The Bank Group also maintained a healthy loan book with an improved Non-performing Loans (NPLs) ratio of 4.7% down from 7.5% reported in the same period in 2019. Cumulative Return on Equity (ROE) improved by 1.9% to 17.3% from 15.4% reported in 2019. Return on Assets (ROA) improved marginally to 3.4% from 2.9% reported in the previous year.
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