Arusha - CRDB Bank netted Sh36 billion as profit last year, almost a half of what one of the largest lenders in the country generated in 2016.
The drop in profit has been attributed to the accumulation of non-performing loans (NPLs) and other challenges facing the financial sector, the managing director Charles Kimei said here on Wednesday.
Currently, the bank has outstanding loans amounting to Sh3 trillion, prompting it to devise several strategies to woo more clients, including reducing interest rates for borrowers and attract more clients.
During 2016 CRDB made a profit of Sh63.7 billion with the dropping levels also attributed to an initiative set to clean up the loans book.
The profit scenario also indicated a downward trend even this year as only Sh13.6 billion was realised in the first quarter of this year (January to March), down from Sh26.18 billion during the same period last year.
The MD, who was addressing journalists ahead of the 23rd shareholders’ conference on Saturday, said he was confident the strategies laid down would see the bank soaring high again.
“We are expecting more profits. We believe in sustainability”, he said, promising that shareholders would be paid dividend and that this would be announced during the coming meeting.
He assured that the liquidity position of the bank was stable and that efforts to reduce the interest rates for borrowers, specifically the small and medium-sized entrepreneurs (SMEs).
“We want more clients,” Dr Kimei said, noting that the 22-year-old financial institution was also struggling to diversify its client base and that it was still leading in capital assets and branch network.
CRDB Bank was established in 1996 when the then state-owned Cooperative and Rural Development Bank was privatised and recapitalised with the support of Danish aid agency, Danida.
Currently, it has three subsidiary companies being CRDB Microfinance, CRDB Insurance Brokerage Limited and CRDB Bank Burundi.
According to Dr Kimei, the bank has full-fledged 262 branches across the country, 15 mobile branches, 534 ATMs, 1,000 points of sale and 3,000 Fahari agents.
Statistics issued in December last year, indicate the bank’s assets - the capital and savings - to be at Sh 5.4 trillion equivalent to a quarter of the government’s annual budget expenditure.
They were estimated at Sh.4.1 tr while loans issued have climbed to a whopping Sh.3.5 trillion The savings stand at Sh.4.3 trillion which, according to the bank boss, was Sh. 300 billion more than the financial institution’s closest competitor.
CRDB has been the leading bank in Tanzania since 2005, mainly due to its capital assets and branch network.
Last year it was declared the ‘safest’ bank by an American magazine Global Finance.