Exim profit slides to eight times low

The bank reported a pre-tax profit of 9.6bn/-last year against 83bn/- recorded in the previous year. Exim’s acting Group CEO Selemani Ponda said despite profit slowing down, the bank key operating parameters remained strong supported by strong balance sheet.

“[The] performance of the bank’s Tanzania operation was stable on the top line,” Mr Ponda said yesterday at a press conference. The bank assets grew by 5.0 per cent to 1.6bn/- in 2017 from 1.5bn/- in 2016.

However, he said during a press conference, that the bottom line was impacted due to higher provisioning on the impaired assets. The profit was eaten by higher provision of 29bn/-last year compared to 2.0bn/-in 2016.

The provision was necessary as to conform to the new accounting procedure—IFRS9 went into effect January. Also the bank’s profit in 2016 was boosted by one off sale of its equity stake in NMB bank that raked in 46bn/-. Exim’s acting chief said the actual pre-tax profit from the bank operation was 37bn/- in 2016.

The bank further planned to write off a major chuck of its impaired assets in this year quarter one to comply with the new central bank guidance. “This will help reduction in bank’s impaired assets portfolio from 14.63per cent to 8.95 per cent at end of March,” Mr Ponda said.

In the year under review the Group recorded a 7.0 per cent growth in net interest income to 97bn/- driven by earning asset books growth, better yields and contained cost of fund. The net interest income growth increased “despite increasing non-performing asset book which was subsequently written-off,” the CEO said.

The interest income—foreign exchange and fees and commission income--generated a reasonably annual growth of 24 per cent and 12 per cent to 12bn/- and 37bn/- respectively.

Exim bank has subsidiaries in Uganda with five branches, two in Djibouti and six in Comoro. In Tanzania the bank has 33 branches with 78 ATMs.

Source: Daily News

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