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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Britam half-year net profit hits Sh2bn on higher investment income
Insurer and financial services provider Britam posted a 22.5 percent jump in net earnings for the half-year ended June 2024, to Sh2 billion, buoyed by increased investment income.
The rise in half-year net profit from Sh1.64 billion posted in a similar period last year came on the back of net investment income rising 2.5 times to Sh13.27 billion from Sh5.3 billion.
“We are confident in the growth and performance trend that Britam has achieved, supported by its subsidiaries in Kenya and the region. Our business is expanding its revenue base while effectively managing costs,” Britam Chief Executive Officer Tom Gitogo said.
“Our customer-centric approach is fueling growth in our customer base and product uptake, particularly through micro-insurance, partnerships, and digital channels.”
The investment income growth was fueled by interest and dividend income rising 34 percent to Sh9.1 billion, which the insurer attributed to growth in revenue and the gains from the realignment of the group’s investment portfolio.
Britam also booked a Sh3.79 billion gain on financial assets at a fair value, compared with a Sh1.8 billion loss posted in a similar period last year.
The increased investment income helped offset the 12.7 percent decline in net insurance service result to Sh2.13 billion in the wake of claims paid out rising at a faster pace than that of premiums received.
Britam said insurance revenue, which is money from written premiums, increased to Sh17.8 billion from Sh16.6 billion, primarily driven by growth in the Kenya insurance business and regional general insurance businesses, which contributed 30 percent of the revenue.
The group has a presence in seven countries in Africa namely Kenya, Uganda, Tanzania, Rwanda, South Sudan, Mozambique, and Malawi.
Britam’s insurance service expense hit Sh13.6 billion from Sh11.3 billion, while net insurance finance expenses rose 2.6 times to Sh12.3 billion during the same period.
“Net insurance finance expenses increased mainly due to growth in interest cost for the deposit administration business driven by better investment performance. This has also been impacted by a decline in the yield curve, which has led to an increase in the insurance contract liabilities. The increase has been offset by a matching increase in fair value gain on assets,” said Britam.
Britam’s growth in profit is in line with that of other Nairobi Securities Exchange-listed insurers, which have seen a rise in profits.
Jubilee Holdings net profit in the six months increased by 22.7 percent to Sh2.5 billion on increased income from insurance, helping the insurer maintain Sh2 per share interim dividend.
CIC Insurance Group posted a 0.64 percent rise in net profit to Sh709.99 million in the same period as net earnings of Liberty Kenya nearly tripled to Sh632 million from Sh213 million, while Sanlam Kenya emerged from a loss to post a Sh282.2 million net profit.
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