Local bank asset share overtake foreign counterparts

Local banks’ share of the total banking sector’s assets has jumped to 51.1 per cent overtaking foreign banks that recorded a gain of 48.8 per cent only.

The Bank of Tanzania (BoT) Directorate of Banking Supervision Annual Report, 2012 show the major components of the banking sector assets continued to depict an upward trend.

The banking sector’s total assets jumped to 16.98tri/- in the period under review, which is an increase of 16.8 per cent from 14.53tri/- recorded in the previous year.

“The major assets indicated growth where the investment in debt securities recorded 41.7 per cent gains, loans, advances and overdrafts 18.3 per cent and interbank loans and receivables 22.5 per cent,” stated the report.

Four major banks namely CRDB Bank Plc, NMB Plc, NBC Limited and Standard Chartered Bank held 51.61 per cent of the total assets of the banking sector. In the list, CRDB Bank ranked first with 3.07tri/- followed by NMB 2.81tri/-, NBC Limited 1.51tri/- and Standard Chartered Bank 1.36tri/-.

Similarly, the banking sector’s ratio of total earning assets to total assets in the period under review increased to 79.2 per cent compared to 78.04 per cent recorded in preceding year.

Major sub-components of earning assets and their relative proportion to total assets were loans, advances and overdrafts by 49.8 per cent, investment in debt securities 16.9 per cent. 

Balances with other banks and financial institutions 9.05 per cent, interbank loans receivables 3.02 per cent, equity investment 0.32 per cent and bills purchased and discounted 0.05 per cent.

Furthermore, the total liabilities of the banking sector increased to 14.85tri/- from 12.79tri/- recorded in the previous year, representing an increase of 16.13 per cent.

Deposits were the major liability item accounting for 91.21 per cent of total liabilities. The sector’s total capital made an increase of 22.04 per cent during the year 2.13tri/- compared to 1.74tri/- of the corresponding period in the year 2011.

The growth was mainly attributed to entrance of new banking institutions, retention of profits and capital injection by banking institutions.

About 60.57 per cent of total capital comprises of other capital items which included share premium, capital grants, general reserves, retained earnings and profits for the year as well as fixed assets revaluation reserves. The increase in other capital items proves the strength and stable growth of the banking sector.
Source: Daily News, reported from Dar es Salaam, Tanzania
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