NBC REMITS 1.2BN/- DIVIDEND TO TREASURY

THE Board of Directors of the National Bank of Commerce (NBC Tanzania) has approved the transfer of 1.2bn/- dividend to the government after nine years of accumulated losses in its balance sheet.

Board Chairman, Mr Nehemiah Mchechu announced on Friday during the bank’s golden jubilee, that the bank had been turning profit since 2015, but could not issue proper dividends to its investors.

Tanzanian government is the second largest shareholder with 30 per cent shares after the South African banking group - Barclays Africa Group formerly Absa Group Limited that owns 55 per cent and International Finance Corporation (IFC) that owns a 15 per cent stake in NBC.

“In 2015 and 2016, NBC posted a profit of 12bn/- and 14bn/- respectively and this year the board finally approved a dividend of 1.2bn/- to be transferred to the treasury, one of our largest shareholder,” Mr Mchechu said, when addressing the podium.

Finance and Planning Minister, Dr Phillip Mpango who represented Prime Minister Kassim Majaliwa, told delegates that the government had long been waiting for such returns as an investor.

“This is the time that all the institutions with whom the government has shares start paying proper dividend … I expect you will triple the payments in the next financial year,” he said.

However, the Minister highlighted that there has been poor penetration of financial institutions; especially banks in rural areas with figures indicating only 17 per cent of bankable population had access to banking services.

The trend puts the government’s target to reach 75 per cent of bankable population come 2017 in doubt.

Dr Mpango urged the country’s third largest bank by assets and other banks to streamline their focus targeting small, micro and medium enterprises as well as private sector to promote financial inclusion. “The government plans to transform its economy into a middle income country.

This means we target our economic growth to jump from the current 7 per cent to 10 per cent in 2020.

In addition, we are seeking to increase our per capita income from 1,006 US dollars in 2015 to 1,500 US dollars in 2020,” he said, pointing out that it is by the help of the banks that the government’s vision will be attained. Apparently, he said, most people including the elite are still afraid of borrowing from banks.

Dr Mpango challenged the banks to lower their loan interest rates considering that the Central Bank had as well lowered its interest from 16 per cent to 12 per cent.

The Minister, however, lauded the bank for its innovativeness having been the pioneer of agency banking, embedded insurance cover and online banking.

Source: DailyNews