Kagera Farmers' Bank suffers over 211m/- loss

Kagera Farmers Co-operative Bank (KFCB) sunk to the red after posting a net loss of 211.08m/- in last quarter of 2014, as its non-performing loans soared to 44.09 per cent.

The bank financials released show the bank in the same quarter of 2013 posted a net profit of 21.1m/-, after a net income generating 159.55m/-.

The cooperative bank attributed the loss to the provisioning of 114.76m/- for bad debts against 6.11m/- of same quarter previous year.

Also the bank's interest and non interest incomes went down during the period under review. Revenues from net interest dropped to 159.55m/- whereas non interest slightly declined to 90.94m/- from 91.4m/-.

The net interest revenue slid after the bank reduced the pace of issuing loans by almost 4.0 per cent to 2.31bn/-. The bank assets growth slowed down to 4.94bn/- in the last year's fourth quarter from 5.29bn/- of third quarter in 2014. While, customer deposits also shrank to 3.13bn/- from 3.25bn/-.

KFCB's NPLs of 44.09 per cent, is one of the industry highest as the benchmark is 5.0 per cent. This means almost half of their loans dished out in 2014 are bad ones.

The Bank of Tanzania, Director of Banking Supervision, Mr Agapiti Kobelo, told 'Daily News' on Wednesday that though loan risk is relatively at an average of 7.0 per cent should go down to the threshold.

"We are meeting regularly with individual banks which have higher NPLs to discuss and advise them on the way to go to arrest the trend," Mr Kobelo said. Tanzania has 54 banks.

On year-to-year basis the bank also posted a net loss of 378.11m/-compared to a net profit of 141.24m/- for the year ending 2014. KFCB started in 2002 and has a single branch with a workforce of 27 people.
Source: Daily News, reported from Dar es Salaam, Tanzania
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