How CRDB recorded Sh270 billion in net profit

Dar es Salaam. CRDB Bank Plc has announced a record profit in 2021 - and the lender’s shareholders should expect lucrative returns on their investments.

At the group level, the bank - which boasts of assets worth Sh8.8 trillion - reported a net profit of Sh267.56 billion during the year that ended on December 31, 2021.

This was a huge leap from the Sh165.185 billion that it registered during the preceding year.

To shareholders, this record net profit translates into more money in their pockets as dividends.

Last year, CRDB Bank’s shareholders shared Sh57.46 billion in total dividends.

Shareholders received Sh22 per share as dividend.

In 2020, Sh44.4 billion in total was shared as dividends among the bank’s shareholders from a net profit of Sh123 billion that was registered in 2019.

The dividend per share was Sh17.

Its latest financial statement, which was published in media yesterday, shows that CRDB Bank Plc’s net profit of Sh267.56 billion for the 2021 calendar year was driven by double-digit growth rates in both funded and non-funded revenue streams.

While the net funded income stream grew by 11.2 percent - to Sh633 billion in 2021 from Sh569 billion in 2020 - the lender’s non-funded income stream grew by a significant 24.8 percent to reach Sh354.278 billion last year, up from Sh284 billion in 2020.

The CRDB Bank managing director, Abdulmajid Nsekela, attributed the performance to growth in lending to the private sector and lender’s improved operations.

“This is supported by growth in lending to the private sector, focusing SMEs, agribusiness, structured finance and to micro enterprises. We also improved our operations focusing on more value adding activities,” he said.

Growth in non-interest income, said Mr Nsekela, was driven by increased transactions volumes mainly from digital channels.

“Our investment in technology and forefront innovative solutions allowed us to deliver strong customer experiences and value proposition during challenging times of the global Covid-19 pandemic.

On a quarterly basis, our agent network grew by 3.4 percent to 19,165 agents at the end of year, being the largest network, driving largest volumes in the banking industry,” he said.

Over 87 percent of total bank transactions were performed through digital channels.

CRDB Bank’s Burundi subsidiary also performed exceptionally well last year, Mr Nsekela said.

However, he did not reveal the Burundi subsidiary’s figures.

In what describes the quality of CRDB Bank Plc’s loan book, the lender’s non-performing loans (NPLs) as a percentage of total gross loans dropped significantly to 3.3 percent in December 2021 from 5.7 percent last year.

This puts the lender in the regulator’s good books, considering that it [the regulator] wants commercial banks to cut their NPLs to below five percent.

In its January 2021 circular, the Bank of Tanzania (BoT) said NPLs for commercial banks and financial institutions must not exceed five percent while their cost-to-income ratios must be not more than 55 percent.

The circular warned that banks and financial institutions that have either cost-to-income ratios of more than 55 percent or NPLs above the five percent limit would be barred from paying dividends and bonuses.

Banks and financial institutions that will fail to comply for two consecutive years from December 31, 2022 will face regulatory sanctions to be determined by the BoT.

CRDB Bank Plc closed the year 2021 with a total of Sh6.5 trillion in customers’ deposits, while the total amount that it had extended in loans, advances and overdrafts stood at Sh5 billion.