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| Dr Kimei |
CRDB
Bank’s net profit has dropped 19 per cent, the bank announced in Dar es Salaam
on Thursday, citing huge fund set aside for bad debts following instability of
the agricultural sector.
Net
profit dropped to 38bn/- in 2011 from 47bn/- in the previous year, with foreign
exchange trading fluctuating miserably due to the challenges facing the local
currency.
The
Bank’s Managing Director, Dr Charles Kimei, said the bank has to cancel bad
debts worth 50bn/- mostly from cotton sector that was hard hit since 2008.
“Efforts
to recover the debts were wiped out by falling average output by 50 per cent in
the last three years,” Dr Kimei told reporters at the bank headquarters.
He
added “to make thing worse even the price dropped drastically to USD 0.70 per
pound from USD 2.00 in the last season to dash hopes for lenders to service
their loans.”
On
average the cotton production is about 300,000 tonnes per year but since 2008
the output dropped by almost 50 per cent to about 150,000 tonnes in
averages.
Over
50 per cent of CRDB loans portfolio goes to agricultural sector, with 690bn/-
directed to the sector last year. The bank vowed to continue lending to the
sector despite the setbacks.
Dr
Kimei said the debt cancellation does not mean the bank has lost the money but
did so to clear the balance sheet. The money will be recovered and the bank was
in a good health.
“We
cleared the balance sheet to pave way to return into a good profitability in
the next year (2012),” Dr Kimei said, “now the books are clean, we expect to
make a good profit of 100bn/-.”
The
CRDB’s assets grew to 2.7trn/- to become the biggest bank in the country in
terms of assets, beating 48 other banks. While deposits increased by 18 per
cent to 2.4trn/-, which was an increase of 400bn/- in 12 months. The deposits
assisted the bank to increase lending capability from 1.1trn/- to 1.4trn/-.
In
last year the bank network expanded rapidly to reach 75 branches after opening
up five new branches in Mwanjelwa in Mbeya, Ubungo, DSM, Bagamoyo in Coast,
Mpanda in Rukwa and Bariadi in Shinyanga.
“The
bank spent almost 5bn/- in opening the braches as one branch costs not less
than 800m/-,” the MD said, noting that the bank created 330 new jobs last year
through expansion.
Other
branches which are still under construction are Oysterbay, Tegeta, Quality
House and Tabata in DSM, CCT House Dodoma, Masasi Mtwara, Mwaloni Mwanza,
Kasumulu and Tunduma Mbeya.
Automated
Tellers Machines (ATMs) also increased to 209 from 162 including 20 ATMS that
also facilitate money deposit. Savings and credit cooperative society as well
as microfinance institutions under CRBD bank support reached 490 from 472.
In
comparison CRDB topped other banks in deposits, loan portfolio, and assets last year.
It
was the second biggest bank only on terms of profitability after National
Microfinance Bank (NMB) that posted pre-tax profit of 103bn/-.
After
CRDB in pre-tax profit ranking was Standard Chartered Bank that generated
48bn/-, while Exim Bank came fourth with 21bn/- followed by NBC that posted a
pre-tax profit of 18bn/-.
Source: The Daily News,www.dailynews.co.tz, reported by Abduel Elinaza
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