Maendeleo Bank posts first profit

Maendeleo Bank plc has posted its first pre-tax profit of 208m/- some two years since it officially opened business in Dar es Salaam, thanks to revenue from loans.

The bank established by the Evangelical Lutheran Church of Tanzania (ELCT), Eastern and Coastal Diocese and listed at Dar es Salaam Stock Exchange (DSE)’s alternative market in 2013, projected to make a first profit in its third year.

However, it beat the deadline by a year. The bank attributed the profit to net interest income that jumped from 474m/- last June to 1.08bn/- in June, this year.

The revenues from loans and advances were the results of lending increment that surged by almost 35 per cent to 11.36bn/- at the end of June.

The assets grew to 43.92bn/- as at the end of June from 31.56bn/-of March, pushed up by loan portfolio and balances with other banks. Despite lending to go up by 35 per cent, gross loans and advances to total deposits increase by 29 per cent at the end of June.

The ratio was lower compared to end March of 32 per cent. The bank, which its share price closes the week trading at 600/-, maintains a prudent lending to keep its NPLs at 1.0 per cent - compared to industry benchmark rate 5.0 per cent.

The bank non-interest income also went up dearly to 358m/- from 161m/-, pushed up mainly by fees and commissions. Deposits, a key docket to increase lending, has gone up by 45 per cent to 38.6bn/-.

The bank still maintained a single branch and 30 staff in Dar es Salaam as at the end of June but cash used for investment activities, in second quarter were 206m/- compared to 54m/- of first quarter.

The bank, according to the management, was established to serve the unbanked population, low income earners especially women and youth, as well as SMEs, large companies and SACCOS.

According to the bank’s financial plan provided during the listing, the institution is projected to make profit of 288m/- in its third year and increase it to 776m/- in the fourth year.

The current shareholders are United Evangelical Mission 14.5 per cent, ELCT - Eastern and Coastal Diocese 9.2 per cent and church parishes 7.7 per cent.
Source: Daily News, reported by Abduel Elinaza, from Dar es Salaam, Tanzania
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