Azania Bank made massive profits in 2022

Dar es Salaam, Tanzania:

The year 2022 proved to be a success for Azania Bank, which is one of the first-tier lenders, as it raised Sh18.36 billion in cumulative annual net profit.

The net profit is nearly nine times the Sh2.06 billion in cumulative profit that the lender recorded in the preceding year. The rise in the lender’s profit was primarily attributed to strong growth in interest income.

According to the released unaudited statement of the financial position as of December 31, 2022, the bank’s net interest income grew by 46.1 percent to Sh77.02 billion by the end of 2022, from Sh52.71 billion of the preceding year.There was also significant improvement in the revenue generated from non-interest income sources, as the total tripled in a one-year period. By December last year, the bank’s non-interest income was cumulatively at Sh36.91 billion, up from Sh12.12 billion in 2021.

Non-interest income includes foreign currency dealings, dividend income, other operating incomes, and also revenue from fee income that the bank charges for its products and services, such as wealth management advice, checking account fees, overdraft fees, ATM fees, interest, and fees on credit cards.

With the number of Tanzanians accessing banking services through alternative channels such as mobile phones and banking agents on the rise, their transactions translate into more money for lenders.

The bank, which currently has a value of Sh1.42 trillion in assets, had Sh768.12 billion in customers’ deposits. Over Sh955.34 billion has been extended as loans, advances, and overdrafts by the end of the year 2022, just about Sh50 billion more compared to the preceding year. However, the bank still has a challenge with non-performing loans at 18.25 percent, though at a slight improvement from 18.43 percent of the preceding year. Despite the promising trend of the banking sector’s performance in Tanzania, NPLs are still among the key challenges for commercial banks.

Overall, according to the Bank of Tanzania, the banking sector reduced the non-performing loans ratio to 7.2 percent in October 2022, down from 8.3 percent in the corresponding period in 2021.