Tanzania: Kagera bank reduces loss by 53pc in Q3

kagera bank.jpgKagera Farmers Cooperative Bank has reduced its net loss by some 53 per cent in this year’s third quarter thanks to non interest income which almost doubled. 

The net loss, of a single branch bank, went down to 64.34m/- in Q3 compared to 134.21m/- of similar period last year.

The bank attributed the performance to non interest income that generated 70.92m/- in three months ending September up from 43.95m/- of same period last year. 

On other hand, the net interest income slowed down by almost 48 per cent to 94.14m/-from 180.15m/-.

The financial statement issued yesterday showed that the revenue generation was almost eaten up by allowances set aside for doubtful debt. 

The impairment losses amount, however, increased to 173.79m/- in Q3 compared to 79.47m/-of similar period last year.

This, impairment amount, was the results of the bank non-performance loans to total gross loans (NPLs) ratio that went down slightly to 45.61 per cent from 50.48 per cent.

Kagera bank, NPLs was nine times higher than the national average benchmark of 5.0 per cent. 

However the bank’s total assets grew by almost 1.0 per cent to 4.71bn/-from 4.68bn/-, while deposits went up by 1.25 per cent to 3.31bn/-.

Meanwhile, cumulatively the bank year-on-year net profit increased to 343.26m/- from 166.89m/- to push further to negative returns on average shareholders’ fund. 

The shareholders investment return plunged to negative 204.29 per cent from merely 96.27 per cent.

The bank opened its door to the public in 2002 serving the farmers of Kagera and its surroundings but due to inefficient capital plunged into loss marking. 

The bank started to operate with 200m/- capital but two years ago, its main shareholder—Kagera Cooperative Union—injected 1.5bn/-.

KCU pledged to keep on increasing the capital to rescue the bank from further loss making spree.
Source: Daily News, reported from Dar es Salaam, Tanzania
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