Tanzania: BoT records remarkable profit increase

Bank of Tanzania (BoT) net profit leaped by over 180 per cent last year thanks to unrealised foreign exchange revaluation gain.

The Central Bank said in its latest financial report released recently that the net profit leaped to 567.2bn/- at the end of June 2015 from 196.09bn/- of June 2014. The financial year of BoT ends in June.

It attributed the hyper performance mainly to unrealised foreign exchange revaluation gain that almost went up ten times. The unrealised gain generated 358.24bn/- during the year ending last June from 37.22bn/- of some period in 2014.

Unrealised gain or loss is the foreign exchange differences arising from foreign currencies transactions as at specific agreed period— day, week, month, quarter or year.

BoT said out of the said amount, the bank dividend amounted to 130bn/- compared to 72.45bn/- of 2014 in compliance with the provision on allocation of profit set out.

The BoT Act, 2006 stipulates the need of the central bank to generate adequate resources in order to support its operation and maintain its independence.

The bank generated a total comprehensive income of 577.33bn/- compared to 197.19bn/- of 2014. “The income was mainly attributed to gains arising from depreciation of shilling against major currencies, increase in interest income and decline in interest expenses,” the report said.

During the year under review, total assets of BoT increased to 12.37tri/- from 11.46tri/- of preceding year that was recorded at June 2014.

The deposits level from banks and non-banks institutions climbed to 3.1tri/- at the end of June 2015 from 2.36tri/- of June 2014. On other hand government deposits declined to 4.8bn/- from 10.19bn/-.

BoT attributed the increase majorly to three areas currency in circulation, deposit by banks and non-banks financial institutions and reserves.

The areas contribution were 497.55bn/- from money in circulation, 738.43bn/- from deposits and 504.88bn/- from reserves. The net increase was, however, reduced mainly by net redemption of BoT liquidity paper 580.11bn/-.

During the year under review, the board accepted risk management and internal control system of the BoT management.

“The bank (BoT) ensures that existing and emerging risks are identified and managed within the acceptable risk tolerance,” the report said.

The key risk that may significantly affect the BoT’s strategies and development are mainly three namely financial, operational and strategic.

The bank spent 70.12bn/- up from 64.51bn/- on salaries and benefits to its 1386 staff of whom 40 per cent are female. The amount increased as the number of staff also went up from 1820 of 2014.
Source: Daily News, reported by Abduel Elinaza, from Dar es Salaam, Tanzania
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