CRDB Bank extends wings beyond borders

Dr Kimei
CRDB bank is set to open a branch in Bujumbura, the capital city of Burundi, next July amid expectations of posting a pre-tax profit of 100bn/-.

The bank has attributed the projection to good results achieved in this year’s first quarter, which maps the profitability way forward for the rest of the year.

The bank will open its Burundian branch on July 1, 2012, becoming the second, after Exim bank, to invest outside the country.

Exim bank has branches in Morocco and Djibouti. CRDB Bank Managing Director Charles Kimei said the bank targets Bujumbura where the banking system remains undeveloped with merely six per cent of the population being tapped by commercial banks.

The bank posted a net profit increase by 34 per cent to 28bn/- in the first quarter, up from 20bn/- realized in the corresponding period last year, giving hopes of meeting its full year target of 100bn/-.

Dr Kimei described the outlook as positive after performance in the first quarter that ended in March surpassed target.

“Trend shows that the first quarters map the rest of the year performance,” Dr Kimei told reporters when presenting the bank’s performance in the first quarter of 2012.

The MD, who is an economist, said the profit realized in three months of this year where beside inflation challenges that pushed banks operative cost high amid declining money in circulation.

“High inflation (at 18.7) has had negative impact on our deposits and level of loans issued, but we managed to beat all odds in the first quarter of this year to post handsome profit,” he said.

Beside high inflation, he said, the bank managed to keep its lending interest rate below 20 per cent against other players who currently charge between 25 and 30 per cent.

The bank said it would not consider hiking lending interest rate soon but if inflationary trend remain unchanged, it would change stance. The bank’s net income from loans grew by 35 per cent to 59.5bn/- from 44.2bn/-, despite the inflation pressure that ate the value of shilling.

However, Dhow Financial Managing Director, Prof. Mohamed Warsame, said the analysis made by his company based on the past data and future projection puts the CDRB pre-tax profit in this year to 90bn/-.

“Historical and projected net profit stimulation results show that the bank profit is in the range of 57.5bn/- to 72bn/-, but the base case lays at 63bn/- ,” said Prof.

Warsame, whose company made the analysis report on CRDB stock prices. The bank assets in the quarter under review grew to 2.8trn/- from 2.7trn/- of the previous quarter last year, which is almost 30 per cent of the total government current fiscal budget.

CRDB, the biggest bank in terms of assets and deposits, said in dealing with queuing problems increased 10 branches—five are in operations—while the number of ATMs has gone up from 183 to 215 to date. The number of staff grew by 300 to 1,504 at the end of the March this year.
Source: The Daily News, , reported by Abduel Elinaza
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