CRDB Bank PLC Shareholders Approve TZS 12 Dividend Following a 103% Jump in Pre-tax Profit in FY 2012

Arusha Tanzania, May 11, 2013 - Tanzania’s leading bank, CRDB Bank PLC shareholders Saturday approved a dividend payment of TZS12.0 per share (30% increase from 2011) proposed by the board during the Annual General meeting (AGM) held in Arusha.

Burundian  President H.E. Pierre Nkrunziza cuts a ribbon alongside CRDB Bank PLC Managing Director Dr. Charles Kimei (Left) during the official opening of the bank's maiden subsidiary in Bujumbura. The bank has spent $10M to launch operations in Burundi.

The shareholders also retained PriceWaterhouseCoopers (PWC) as the bank’s auditors for the FY 2013. This follows the bank’s impressive performance in the 2012 FY after it posted a TZS107.7 billion pre-tax profit - a 111% increase compared to the previous FY which stood at TZS51.0 billion.

CRDB Bank Plc Chairman of the Board Mr. Martin Mmari attributed the growth in profit to the ‘revival of foreign exchange related income to its normal trend, growth in net interest income and fees and commissions coupled with strong cost management’.

“We are focused on ensuring high shareholders return as reflected by earnings per share and partly by the dividend paid per share. We recommended a TZS 12.0 per share and I am happy to note that the same has been approved by the shareholders,” said M. Mmari

He added: “the total amount of dividend recommended is TZS 26.1 billion, as compared to TZS 19.6 billion paid out in 2011and this signals a strong and progressive growth in earnings per share (EPS) and dividends per share(DPS). ”

CRDB Bank Managing Director, Dr Charles Kimei addressing the shareholders noted the Bank has witnessed an improved performance with significant growth in customer deposits especially from government institutions and a growing customer base as well as an increasing loan portfolio.

“Our interest income grew by TZS 73.3 billion to TZS 261.7 billion while the net interest income rose to TZS 206.2 billion in FY 2012 compared to TZS 153 billion recorded in 2011,” said   Dr. Kimei.

The MD however noted: “the loan impairment remained a challenge to the bank and we are steadfastly working to reduce it to not more than 5% of the loan portfolio which stood at TZS 1.807 billion as of December 2012.”

According to the MD, the bank’s net interest income after loan impairment charges increased to TZS 179 billion in 2012 from TZS 122.2 billion in 2011. On the other hand, fees and commissions income grew to TZS 75.2 billion in 2012 up from TZS 62.8 billion in 2011.

Dr. Kimei said the bank remains steadfast in implementing activities aimed at ensuring growth in retail (personal, retail, microenterprises and SMEs) business.

Late last year, the bank launched its first subsidiary outside the Tanzanian boarders in Burundi’s capital Bujumbura joining the list of fast growing banks in the region. The MD maintained that the Bank’s venture into Burundi was a deliberate move to tap the growing business between Tanzania and the land-locked Burundi since majority of imports to Burundi come through the port of Dar-es Salaam.

“Our Burundi subsidiary deposits and total assets as of December 2012 stood at TZS 1.12 billion and TZS 18.65 billion respectively. With less than one month of operation, the net loss for the year stood at TZS 0.3 billion, which is within our expectations,” said Dr. Kimei.

Other Key Highlights

  

Dr. Kimei says CRDB Bank will continue focus on achieving operational effectiveness and customer experience while maintaining its core business model. The Bank will emphasize on consolidating improvements made on credit risk management processes to further reduce the non performing loans (NPL) ratio to less than 5%. Dr. Kimei further said the bank’s total assets are expected to grow by 17% by end of 2017 on the back of adequate capital and liquidity levels.

These developments come even as the bank continues to roll out products aimed growing its banking services portfolio. Last month, the bank launched a China Desk - a platform aimed at facilitating business between Tanzania and China. According to the MD, the growing business between China and Tanzania portends great prospects and the bank is already working with the Bank of China and HSBC to ease the costs and risk of doing business between Tanzania and China.

Meanwhile, the MD announced plans to roll out agency banking within the month after an approval from the Tanzanian Central Bank. According to him, the agency banking solution will increase the bank’s reach within Tanzania and aid the bank’s aspiration in tapping the unbanked population. Currently, only 10% of Tanzania population is banked according to available statistics from the Central Bank of Tanzania .