- Published on Thursday, 29 December 2011 17:55
- Written by FINNIGAN WA SIMBEYE
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A modest actual profit of 3.6bn/- was made by Tanzania Investment Bank last year compared to 2.9bn/- in 2009 despite the global recession that necessitated government bail out of struggling private companies.
TIB Managing Director, Peter Noni said in the 2010 annual report that the modest profit margin increased because of cost saving measures and charged off loans. Mr. Noni said the bank’s net asset value also increased to 243.7bn/- in December 2010 from 167.2bn/- in 2009.
“Loan portfolio also grew during the year from 81.8bn/- in 2009 to 106.1bn/- by December 2010,” Noni said. Deposits also grew from 105.5bn/- to 129.7bn/- during the same period under review thanks to Kilimo Kwanza funds which were disbursed by the government. TIB has a mini agriculture lending window.
TIB which is under restructuring to become a fully fledged development institution, realized interest income of 18.9bn/- from 18.7bn/- over the same period as interest rates fell due to bad debts of struggling borrowers.
“Non interest income grew to 5.6bn/- from 2.3bn/- in 2009 due to higher foreign exchange income and recoveries from previous charged off assets,” the MD said in his presentation of the 2010 annual report.
During the year under review, TIB managed to assist create 2,275 permanent jobs and 5,587 temporary jobs after lending clients money while expanding its own staff family by 50 employees.
The bank which opened a branch in Mwanza and relocated the headquarters to Mlimani City in Dar es Salaam, said its Arusha branch will open its doors before March 2012. The bank’s Board Chairman, Professor William Lyakurwa said I his statement that 2010 was a year of recovery by the economy from the global recession hence most businesses did not perform to maximum potential.
“Improved agriculture performance especially with regard to improved food supply and generally the government’s macro-economic management reinforced the recovery process and many of the bank’s clients an overall successful year,” Prof Lyakurwa said.
He pointed out that on the path to transformation, TIB took major steps towards reinforcing its human resources with establishment of Strategic Planning and Corporate Affairs Division. “It is our expectations that the formulation, implementation, monitoring and evaluation of TIB’s business plans and strategy will be streamlined accordingly,” the Board Chairman pointed out.
Established in 1970 by an Act of parliament as a development financial institution to substantiate commercial banks, TIB added an agriculture lending window in 2010 after President Kikwete ordered Bank of Tanzania to channel money recovered from External Arrears Payment Account defaulters to TIB for lending to the sector.