NMB, CRDB jockey for banking top spot

Prof Warsame
The two largest banks in the country, the National Microfinance Bank (NMB) and CRDB Bank are in a tight competition for the top position as market leaders in the industry.
Both banks posted historic profits last year and intense competition is forecast during this financial year, on the back of good economic outlook.
According to Dhow Financial analysis, NMB was the most profitable bank in 2012, after posting a 98bn/- net profit while CRDB comes second with 81bn/-.
Both are listed on the Dar es Salam Stock Exchange (DSE). “CDRB Bank closed the gap considerably last year,” Dhow Financial Chief Executive Officer Prof Mohamed Warsame said when presenting a report over the weekend.
Prof Warsame said: “If one analyses the numbers he or she will see that competition at the top is very fierce, actually the two banks (NMB and CRDB) are almost at par.” NMB generated interest income of 288bn/- while CRDB did make 262bn/- in the year ending last December.
Both set aside 26bn/- for bad debts and had almost similar non-interest expenses of 202bn/- for NMB and 171bn/- CRDB, meaning the costs of doing business is still high. During the year under review NMB net interest income was 55bn/- and NMB 9bn/-.
Last year’s data show that due to hefty profits the banks made their shareholders richer after return on average shareholder equity for CRDB climbed to 28.2 per cent from 15.2 per cent, and NMB jumped slightly up to 29.8 per cent from 27.6 per cent.
Though NMB remains the most profitable bank and largest network, CRBB leads in loan, assets and customer deposits. CRDB Bank assets reached 3.075tr/- compared to NMB’s 2.796tr/-. 
On loans portfolio CRDB lent out 1.8tr/- against NMB’s 1.35tr/- while deposits stood at 2.59tr/- and 2.27tr/- respectively.
The most interesting part was on trading income as CRDB raked in 23bn/- because of corporate and foreign exchange dealing while NMB generated 9bn/- due to the fact that it is a pro-poor bank. 
CRDB’s interest expenses are on higher side when measure up to NMB as last year they spent 55bn/- against its rival 9bn/-.
However, the two banks are very well below the Kenyans ones despite being of the same size like KBC, Equity and Co-operative. Last year, while CRDB and NMB net profit was 50.3 million US dollars and 61 million US dollars respectively their counterparts, penciled -- KBC (141.9 million US dollars), Equity (140.5) and Co-operative (89.6).
“These banks capitalised on agency banking where almost 40 per cent of their dealings are transacted via the agencies to cut down operational costs to boost profitable margin,” Prof Warsame said.
He added: “Tanzanian banks are where Kenyan were five years ago. (but with) the utilisation of modern technology I think the country is heading towards the right direction.” 
CRDB and Postal Bank have already launched agency banking though at nascent stages. The sector expects to get boosted in the second half of this year after the 2013/14 government budget is passed.
Source: The Daily News, www.dailynews.co.tz, reported by Abduel Elinaza in Dar es Salaam 
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