Tanzania’s CRDB Bank Posts Record Profit, Proposes Increased Dividend During Strategic Expansion
May 18, 2024By Adonis Byemelwa
CRDB Bank has demonstrated remarkable growth and significantly boosted its profits and shared value year over year. In 2023, the bank reported a post-tax profit of TZS 428.8 billion, a substantial rise from TZS 351.4 billion in 2022, marking a 21% increase.
This milestone was announced by Dr. Ally Laay, Chairman of the Board of Directors, during a press conference in Arusha, anticipating the 29th annual general meeting of CRDB shareholders. The event, slated for tomorrow in Arusha, will feature Dr. Hussein Mwinyi, the President of Zanzibar, as the guest of honor.
Due to these impressive results, the Board has proposed a dividend of TZS 50 per share, an 11.11% increase from the previous year's TZS 45. If approved, this would result in total dividends of TZS 130.6 billion, representing 34% of the net profit, up from TZS 117.5 billion in 2022.
The CRDB General Meeting, themed "Shared Prosperity," is scheduled for Saturday, May 18, and will be preceded by a shareholder seminar at the Arusha International Conference Centre (AICC). Key agenda items include dividend proposals, directors' reports, financial statements for 2023, director fees, and the appointment of financial auditors.
CRDB Group Managing Director Abdulmajid Nsekela highlighted the crucial role of shareholders in the bank's ongoing success. He noted that the bank's strength lies in the collective input of its shareholders, which has fostered sustainable growth and solidified CRDB's foundation.
Nsekela said the five-year strategic plan (2023-2027) aims to enhance efficiency and expand the bank's footprint, with new branches in the DRC and Burundi, and plans for Zambia, Uganda, and the Comoros Islands.
The banking landscape has seen significant technological advancements, particularly in mobile banking, which has increased financial inclusion among the unbanked population.
Banks in Tanzania offer a variety of services including retail banking, corporate banking, microfinance, and investment services. The adoption of digital banking solutions has been crucial in reaching remote areas, thereby fostering economic activities.
Regulatory reforms and strategic partnerships have enhanced the sector's resilience and competitiveness, positioning Tanzania as a burgeoning hub for financial services in East Africa.
The total number of bank branches and ATMs fell to 987 in 2022 from 990 in 2021, with large banks accounting for 55.2% of the branch network. Urban centers housed 51.6% of total branches. In 2013, the Central Bank of Tanzania (BOT) introduced comprehensive agent banking guidelines allowing licensed banks and financial institutions to appoint retail agents for their banking services, according to the Tanzania Investment website.
This mechanism has enabled banks to extend their services profitably to previously unbanked lower-income individuals. The agent banking business has grown significantly, with the number of agents increasing by 53% to 75,238 in 2022 from 48,923 in 2021.
Deposits through agents rose by 71.1% to TZS 61,915.9 billion, with large banks dominating the agent banking sector, accounting for 59.7%. Urban centers accounted for 56.5% of total operating bank agents.
CRDB Bank's impressive financial performance and strategic expansion plans underline its commitment to enhancing shareholder value and contributing to Tanzania's vibrant banking sector. With ongoing advancements and a robust regulatory framework, the future looks promising for both CRDB and the broader financial services industry in Tanzania.
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