Dar es Salaam. Ecobank Tanzania’s profit before tax for the first quarter of 2024 has risen to Sh3.5 billion, five times more than what was recorded in the corresponding period in 2023.
Speaking to the press over the weekend, Ecobank-Tanzania managing director Dr Charles Asiedu said the results in Q1 were a continuation of the good performance that the bank achieved throughout 2023.
“In the first three months of the year, revenues surged by an impressive 66 percent to nearly Sh10 billion compared to the same period in 2023. This significant growth was driven by increased lending aimed at bolstering Tanzania’s economy, coupled with expanding business volumes, which underscored the strong acceptance of its products by customers,” he explained.
The improvement in profitability levels during this year’s Q1 was attributed to the controlled cost and decreased impairment charge arising from the non-performing loans (NPL) ratio consistently being under 3 percent for the past two years.
“Operating efficiency continued to improve, resulting from widening positive jaws between revenue and cost. Thus, the income ratio trended to less than 60 percent for the first time, compared to 77 percent a year ago,” said Dr Asiedu.
According to the lender, these results reflect increasing customer confidence as deposits grew over the one-year period by 68 percent to Sh313 billion, influencing asset growth of 27 percent to Sh415 billion.
“On the back of strong growth in deposits, we were able to support our client businesses as we grew our loan book by more than Sh65 billion to Sh157 billion from Sh90 billion,” he stated.
On an annual basis, the bank reported a Sh9.59 billion annual profit before tax in 2023, a remarkable feat compared to Sh1.61 billion in 2022.
These achievements also align with the broader success of the Ecobank Group, the pan-African financial services conglomerate.
Despite the challenging operating environment in 2023, the Ecobank Group reported a return on tangible shareholders’ equity of 24.9 percent and increased profit before tax by 8 percent (or 34 percent at constant currency), reaching $581 million.
Data provided by the lender showed that net revenue surpassed the $2 billion mark for the first time since 2015, growing by 11 percent (or 31% at constant currency) to reach $2.1 billion.
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Air Tanzania Banned From EU Airspace Due to Safety Concerns
Several airports have since locked Air Tanzania, dealing a severe blow to the Tanzanian national carrier that must now work overtime to regain its certification or go the wet lease way
The European Commission has announced the inclusion of Air Tanzania on the EU Air Safety List, effectively banning the airline from operating in European airspace.
The decision, made public on December 16, 2024, is based on safety concerns identified by the European Union Aviation Safety Agency (EASA), which also led to the denial of Air Tanzania’s application for a Third Country Operator (TCO) authorisation.
The Commission did not go into the specifics of the safety infringement but industry experts suggest it is possible that the airline could have flown its Airbus A220 well past its scheduled major checks, thus violating the airworthiness directives.
“The decision to include Air Tanzania in the EU Air Safety List underscores our unwavering commitment to ensuring the highest safety standards for passengers in Europe and worldwide,” said Apostolos Tzitzikostas, EU Commissioner for Sustainable Transport and Tourism.
“We strongly urge Air Tanzania to take swift and decisive action to address these safety issues. I have offered the Commission’s assistance to the Tanzanian authorities in enhancing Air Tanzania’s safety performance and achieving full compliance with international aviation standards.”
Air Tanzania has a mixed fleet of modern aircraft types including Boeing 787s, 737 Max jets, and Airbus A220s.
It has been flying the B787 Dreamliner to European destinations like Frankfurt in Germany and Athens in Greece and was looking to add London to its growing list with the A220.
But the ban not only scuppers the London dream but also has seen immediate ripple effect, with several airports – including regional like Kigali and continental – locking out Air Tanzania.
Tanzania operates KLM alongside the national carrier.
The European Commission said Air Tanzania may be permitted to exercise traffic rights by using wet-leased aircraft of an air carrier which is not subject to an operating ban, provided that the relevant safety standards are complied with.
A wet lease is where an airline pays to use an aircraft with a crew, fuel, and insurance all provided by the leasing company at a fee.
Two more to the list
The EU Air Safety List, maintained to ensure passenger safety, is updated periodically based on recommendations from the EU Air Safety Committee.
The latest revision, which followed a meeting of aviation safety experts in Brussels from November 19 to 21, 2024, now includes 129 airlines.
Of these, 100 are certified in 15 states where aviation oversight is deemed insufficient, and 29 are individual airlines with significant safety deficiencies.
Alongside Air Tanzania, other banned carriers include Air Zimbabwe (Zimbabwe), Avior Airlines (Venezuela), and Iran Aseman Airlines (Iran).
Commenting on the broader implications of the list, Tzitzikostas stated, “Our priority remains the safety of every traveler who relies on air transport. We urge all affected airlines to take these bans seriously and work collaboratively with international bodies to resolve the identified issues.”
In a positive development, Pakistan International Airlines (PIA) has been cleared to resume operations in the EU following a four-year suspension. The ban, which began in 2020, was lifted after substantial improvements in safety performance and oversight by PIA and the Pakistan Civil Aviation Authority (PCAA).
“Since the TCO Authorisation was suspended, PIA and PCAA have made remarkable progress in enhancing safety standards,” noted Tzitzikostas. “This demonstrates that safety issues can be resolved through determination and cooperation.”
Another Pakistani airline, Airblue Limited, has also received EASA’s TCO authorisation.
Decisions to include or exclude airlines from the EU Air Safety List are based on rigorous evaluations of international safety standards, particularly those established by the International Civil Aviation Organization (ICAO).
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The process involves thorough review and consultation among EU Member State aviation safety experts, with oversight from the European Commission and support from EASA.
“Where an airline currently on the list believes it complies with the required safety standards, it can request a reassessment,” explained Tzitzikostas. “Our goal is not to penalize but to ensure safety compliance globally.”
Airlines listed on the EU Air Safety List face significant challenges to their international operations, as the bans highlight shortcomings in safety oversight by their home regulatory authorities.
For Air Tanzania, this inclusion signals an urgent need for reform within Tanzania’s aviation sector to address these deficiencies and align with global standards.
The path forward will require immediate and sustained efforts to rectify safety concerns and regain access to one of the world’s most critical aviation markets.
Source: allafrica.com
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