The National Bank of Commerce (NBC) made a loss of 20.3bn/- for the quarter ended June 2012, blaming the results on bad debts.
The bank announced in a statement, that showed NBC during a similar period last year, made a pre-tax profit of 3.51bn/-.
Analysts have expressed concern over the rise of bad and doubtful debts in the institution, which was privatised in 2000.The bank announced in a statement, that showed NBC during a similar period last year, made a pre-tax profit of 3.51bn/-.
They said that the amount set aside as provisioning for bad and doubtful debts or non-performing loans (NPL) at 11.1 per cent, which translates into over 71bn/-.
The Zan Securities Chief Executive Officer, Mr Raphael Masumbuko, told the 'Daily News' that the bank's results also show assets and customer deposits to have dropped.
He, however, said posting loss in one quarter does not mean the bank will lose in full year results.
NBC generated interest income of 24.82bn/-, down from 27.02bn/- during the preceding quarter, while non-interest income dived to 12.99bn/- from 13.7bn/-.
On Wednesday some Members of Parliament (MPs) raised concern over NBC's performance.
However, the Minister for Finance and Economic Affairs, Dr William Mgimwa defended the bank saying it was still sound despite the request by the central bank for additional capitalisation.
"The bank is liquid and sound, though Bank of Tanzania (BoT) asked them to raise an additional fund to support its capital in case of abnormality," Dr Mgimwa told the house.
NBC balance with BoT dropped to 178.77bn/- from 192.88bn/-, during the quarter ended in June.
Last month, NBC, which is a unit of ABSA Group of South Africa, suspended the Managing Director, Mr Lawrence Mafuru, pending investigation following allegations of irregularities.
Late last month, in South Africa, ABSA Group controlled by Barclays Plc sent its Head of Collection on leave, pending a probe into circumstances that have led it to raise provisions for bad debts.
The South African bank posted a 39 per cent increase in bad debts in the first half of this year and increased the amount it sets aside to cover souring mortgages to 52 billion rand (6.4 billion US dollars or 10.24tr/-).
Source: The Daily News, http://www.dailynews.co.tz, reported by Abduel Elinaza
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