Tanzania Banking Sector Performance Review - tzdpg.or.tz · PDF fileI thank everyone for...

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Tanzania Banking Sector Performance Review Year Ended 31 December 2009 20 May 2010 E

Foreword 2009 Tanzania Banking Sector Review is the third issue in the progression of Annual Performance Reports published by Ernst & Young. The review aims at highlighting and informing stakeholders’ performance and developments in the Tanzania banking sector.

Despite the financial crisis challenges arising in 2008, the Tanzanian banking sector remained safe and stable during 2009. In general, the sector is satisfactorily capitalised, with paid up capital recording an increase of 39%, (15% in 2008). The banking sector assets increased by 19% with the ratio of earning assets to total assets at 79% (83% in 2008). The funding structure was mainly composed of deposits which increased by 24% and shareholders’ funds which increased by 28%. Furthermore, the banking liquidity was overall considered satisfactory, with the ratio of liquid assets to deposit at 58% (54% in 2008). Three banks entered the market in 2009: United Bank of Africa (UBA), Mkombozi Commercial Bank (Mkombozi) and Tanzania Women’s Bank (TWB). Furthermore, this year’s report has included The People’s Bank of Zanzibar (PBZ) and Tandahimba Community Bank (TCB) and prior years’ performance have been adjusted to include these two.

CRDB became listed in June 2009 at Dar es Salaam stock exchange. Also NIC Bank of Kenya acquired 51% of Savings & Finance Bank in September 2009 and in December 2009, I&M Bank acquired 100% of CF Union Bank

This years’ report also comes with an article on agriculture finance as a topical issue.

I thank everyone for making the 2009 report a success and wish to extend my thanks to banks and financial institutions for their great support and cooperation in the development of the report.

Joseph Sheffu

Country Leader

Tanzania Banking Sector Annual Performance Review for the year ended 31 December 2009

Abbreviations

The report includes the following 38 institutions with their abbreviations used in the analyses:

No Abbreviations Banks 1 Access Access Bank 2 Akiba CB Akiba Commercial Bank 3 Azania Azania Bancorp 4 BancABC African Banking Corporation 5 Bank M Bank M (T) Ltd 6 Barclays Barclays Bank (T) Ltd 7 BOA BOA Bank (T) Ltd 8 BOB Bank of Baroda 9 BOI Bank of India (T) Ltd

10 CBA Commercial Bank of Africa 11 CF Union CF Union Bank 12 Citibank Citibank 13 CRDB CRDB Bank PLC 14 DCB Dar es Salaam Community Bank 15 DTrust Diamond Trust Bank 16 Exim Exim Bank 17 Habib Habib African Bank 18 ICB International Commercial Bank 19 Kagera Kagera Farmers Co-operative Bank 20 KCB Kenya Commercial Bank 21 Kili Coop Kilimanjaro Co-operative Bank 22 Mbinga Mbinga Community Bank 23 Mkombozi Mkombozi Commercial Bank 24 Mufindi Mufindi Community Bank 25 Mwanga Mwanga Community Bank 26 NBC National Bank of Commerce 27 NMB National Microfinance Bank 28 PBZ The People's Bank of Zanzibar 29 S&F Savings & Finance Bank 30 Stan Chart Standard Chartered Bank 31 Stanbic Stanbic Bank (T) Ltd 32 TCB Tandahimba Community Bank 33 TIB Tanzania Investment Bank 34 TPB Tanzania Postal Bank 35 TWB Tanzania Women's Bank 36 Twiga Twiga Bancorp Ltd 37 UBA United Bank of Africa 38 Uchumi Uchumi Commercial Bank

Please note

• FBME is excluded from the report because its financial statements include group’s results.

• The currency of the data is in Tanzanian Shillings and can be converted to US$ at TShs. 1330: US$1


• TWB, TCB and Kagera annual audited data could not be obtained, hence the data used in the report is from 2009 Quarter 4 results. For quarterly reports, we annualised the income statement to get the annual figures.

• Some banks did not disclose number of employees in the annual audited report; we have therefore used 2009 Quarter 4 figures.

The report was prepared by Aza Suleiman (Business Advisor) and Chacha Winani (Manager), with oversight and guidance from Glenn Scott (Executive Director) and Moremi Marwa (Senior Manager) all from Transaction Advisory Services.

Note that a separate quarterly data pack supplement is available on request.

Copyright, Ernst & Young © All rights reserved.

Disclaimer Whilst care has been taken in compiling the report, Ernst & Young does not give warranty to either completeness or accuracy of data and information contained herein, as data in the report is based on publicly published financial results audited or quarter four results as the only source of information. We realize there may be other undisclosed factors which may account for a bank’s performance. Therefore, we accept no responsibility for any reliance placed on or any losses incurred in using the report.

May 2010

EY Contact Details Address: Ernst & Young Utalii House 36 Laibon Road, Oysterbay P.O.Box 2475 Dar es Salaam, Tanzania

Tel: 255 22 266 7227 People

Name Title E-Mail Joseph Sheffu Country Leader [email protected] Glenn Scott Executive Director - TAS [email protected] Moremi Marwa Senior Manager - TAS [email protected] Chacha Winani Manager - TAS [email protected] Aza Suleiman Business Advisor [email protected]

mailto:[email protected]





Table of Contents

1 STRUCTURE OF THE REPORT ................................................................... 1 1.1 Overview ............................................................................................. 1 1.2 Contents of the report ......................................................................... 1

2 BANKING SECTOR AND ECONOMIC OVERVIEW ......................................... 3 2.1 Economic overview .............................................................................. 3 2.2 Banking sector overview ...................................................................... 3

3 TOPICAL ISSUE IN THE BANKING SECTOR ................................................ 5

4 SECTOR’S PERFORMANCE OVERVIEW ...................................................... 9

5 PROFITABILITY ...................................................................................... 11 5.1 Return on Assets and Equity .............................................................. 11

6 EFFICIENCY ............................................................................................ 14 6.1 Overview of the sectors’ efficiency ..................................................... 14 6.2 Operating Efficiency .......................................................................... 14 6.3 Portfolio Yield and Yield to Operating Efficiency .................................. 15 6.4 Staff Productivity .............................................................................. 17 6.5 Rates Paid on Funds .......................................................................... 19 6.6 Portfolio Quality ................................................................................ 19

7 CAPITAL ADEQUACY .............................................................................. 20 7.1 Capital Adequacy Overview ................................................................ 20 7.2 Asset Structure Overview .................................................................. 20 7.3 Funding (Liabilities) Structure Analysis ............................................. 22 7.4 Financial Soundness .......................................................................... 25 7.5 Liquidity Analysis .............................................................................. 26 7.6 Earnings Analysis .............................................................................. 27


List of tables Table 1: Summary of selected historical Macro-Economic figures ........................................ 3 Table 2: Snapshot of the Balance Sheet and percentage change for over 4 years ................ 9 Table 3: Snapshot of the Income Statement and percentage change for over 4 years ....... 10 Table 4 : Overview of Earnings & Profitability ratios for the past 4 years ........................... 11 Table 5: Overview of efficiency ratios over the last four years ........................................... 14 Table 6: Portfolio Yield for peer groups ............................................................................. 16 Table 7: Earnings per staff in peer groups ......................................................................... 18 Table 8: Capital Adequacy overview .................................................................................. 20 Table 9: Balance Sheet Structure for the 4 years ............................................................... 20 Table 10: Major components & % share of total assets ....................................................... 20 Table 11: Large banks and their share of sector’s Total Assets.......................................... 21 Table 12: Assets by peer group ......................................................................................... 21 Table 13: Composition of total liabilities and % increases ................................................... 22 Table 14: Snapshot of Share Capital and % increases ......................................................... 25 Table 15: Gross income increase. ...................................................................................... 27


List of Figures

Figure 1: ROAA for Banking Sector .................................................................................... 12 Figure 2: ROAA for the peer groups ................................................................................... 12 Figure 3: ROAE for peer groups ......................................................................................... 13 Figure 4: Banking sector operating efficiency .................................................................... 15 Figure 5: Peer group’s operating efficiency ....................................................................... 15 Figure 6: Portfolio Yield: Banking sector ............................................................................ 16 Figure 7: Portfolio Yield to Operating Efficiency (%) ......................................................... 17 Figure 8: Portfolio Yield to Operating Efficiency in peer groups ......................................... 17 Figure 9: Earnings per staff ............................................................................................... 18 Figure 10: Staff income to staff portfolio ........................................................................... 19 Figure 11: Assets composition ........................................................................................... 21 Figure 12: Funding composition ......................................................................................... 22 Figure 13: Funding structure ............................................................................................. 23 Figure 14: Peer group share of customer deposits............................................................. 23 Figure 15: Share of customer deposits among large banks ................................................ 24 Figure 16: Share of customer deposits among medium banks ........................................... 24 Figure 17: Share of customer deposits among NBFI’s ........................................................ 24 Figure 18: Share of customer deposits among small and regional banks............................ 25 Figure 19: Changes in capital structure ............................................................................. 26 Figure 20: Total capital to RWAs ........................................................................................ 26 Figure 21: Liquid Assets to Deposit Liabilities .................................................................... 27


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1 STRUCTURE OF THE REPORT

1.1 Overview

In this report, we compare banking sector institutions against each other and among peers in the groups. Peer groups used are as follows:

Ernst & Young Banking Review - Peer Groups Definition

Large Medium Regional & Small Barclays Access DCB Citibank Akiba CB Kagera CRDB Azania Kili Coop Exim BancABC Mbinga NBC Bank M Mkombozi NMB BOA Mufindi Stan Chart BOB Mwanga Stanbic BOI TCB

CBA TWB CF Union Uchumi DTrust Habib ICB KCB NBFIs S&F TIB PBZ TPB UBA Twiga

All areas of analysis have looked at performance across all institutions as well as performance among and within the peer groups.

The analysis is focused on three areas namely:

• Earnings and profitability;

• Efficiency; and

• Capital adequacy.

The full results for each bank for which all the ratios are used to measure the banks’ performance are presented in Appendix A.

1.2 Contents of the report

To facilitate the reading of this report, the document is organised as follows:

Section 2: Banking Sector and Economic Overview provides an overview of the entire banking sector in the country and historical economical performance.

Section 3: Topical issue in the banking sector reviews agricultural finance in Tanzania.

Section 4: Sector performance provides the country’s banking sector performance.

Section 5: Profitability contains a review and analysis of profitability of the institutions in the banking sector.

Section 6: Efficiency contains a review and analysis of efficiency of the institutions in the banking sector.


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Section 7: Capital Adequacy provides a review and analysis of capital adequacy and financial soundness of institutions in the banking sector in Tanzania.


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2 BANKING SECTOR AND ECONOMIC OVERVIEW

2.1 Economic overview

Prudent macroeconomic management along with substantial donor assistance has helped build and strengthen economic growth and fuel strong investment into the country. Real GDP growth has averaged 6.3% over the past four years. Most of this growth has been a direct result of pro - investment policies put in place by the Government, which has helped the country continue to attract foreign direct investment.

In the past few years the government has intensified its efforts to develop non-traditional sectors such as mining and tourism to lower the economy’s dependency on agriculture with some success and the results of these efforts has been forthcoming.

Tanzania’s medium outlook remains bright, backed by strong international support. The country is on a strong footing. Tanzania’s economy is predicted to grow around 6.3% over the next five years, with manufacturing, mining and tourism sectors featuring strongly. An improved macroeconomic environment should attract already growing FDIs.

Table 1: Summary of selected historical Macro-Economic figures

2006 2007 2008 2009

Gross Domestic Product (GDP)

Real GDP Growth % 6.74 7.15 7.42 4.1

Nominal GDP (USD Billions) 12.62 14.47 17.22 17.1 Nominal Per-Capita GDP (USD per Person) 324.16 366.92 431.95 425.14

Population in Million 38.93 39.44 39.87 40.23

Population Growth % 1.56 1.31 1.09 0.92

Inflation

Consumer Price Index 7.25 7.03 10.28 12.09

Exchange Rate (TZS against US dollar)

Year-end value 1,261.64 1,132.09 1,280.30 1,353.15

Interest Rates

Short-term 11.64 13.38 8.11 6.73

Policy rate 20.07 16.4 15.99 10.08

Trade and Current Account

Trade Balance (USD Billions) -0.34 -0.64 -0.64 -0.66

Current Account Balance (USD Billions) -1.17 -1.86 -2.73 -2.41 Source: Global Insight

2.2 Banking sector overview

In year 2009 there has been a healthy growth in the number of people who use banks. While the population has grown by 10% over the past three years (2006-2009), the number of people holding a bank account has risen by 33% at the same period1.

However, despite the encouraging growth in the number of people with bank accounts, it only serves 9% of the adult population in Tanzania was banked by 2009. This indicates that the potential for growth in the banking sector is still high.

Finscope’s 20092 survey on the demand for, and barriers to accessing financial services in Tanzania revealed that there is 22% increase in people who used to use banks for

1 Finscope 2009 Survey on the demand for and barriers to accessing financial services in Tanzania.


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savings, deposits, investments and loans but they do not now use banks. This is a lost opportunity for banks, and obstacles to access finance have been identified as:

• loans are perceived as not that relevant, hard to get or too difficult to repay;

• lack of enough money to bank and also the obstacles are too many to both save and/or invest with banks; and

• lack of knowledge on the banking services and products.

Though the Tanzania banking sector enjoyed another year of satisfactory performance in terms of assets and funding growth, profitability and capital adequacy, the growth was much reduced in several areas measured when compared to 2008. It may be fair to say that growth in the sector has slowed down due to the effects of the global financial crisis and the economic slowdown. However, based on the historical performance over the past five years and the global financial crisis notwithstanding, growth appears poised to continue over the medium to long term.

2 Commissioned by the Financial Sector Deepening Trust (FSDT)


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3 TOPICAL ISSUE IN THE BANKING SECTOR Agriculture Finance in Tanzania

The agricultural sector plays a dominant role in the Tanzania economy, accounting for about 30% of the GDP, providing 70% of exports earnings, and employing 80% of the total work force. Agricultural products, most notably coffee, cashew nuts, cloves, and cotton, are Tanzania's most important goods for exports, accounting for approximately 85% of the total agricultural export earnings. The country also exports tea, sisal, tobacco, and pyrethrum.

In Tanzania as a whole, only about 10% of people have access to financial loans from banks and other financial institutions, and the agricultural sector only accounts for 6% of the total lending activities. Historically, commercial banks have been reluctant to lend to small-scale farmers.

According to the Finscope surveys (both 2006 and 2009) among the rural household who currently have loans, 84% indicated that they obtained loan through informal means, 8% through SACCOS, 3% through MFIs, 3% as business loans and 3% individual personal loans from banks. Part of the reasons for this trend are such as: lack of credit history, unpredictable demand for loans, lack of proper records, seasonality of farming, lack of education and skills and the lack of collateral (movable or immovable) to pledge for repayment of loans. Even plots which farmers use cannot be used as collateral because farmers do not legally own the land.

Existing loan products for agriculture financing in Tanzania

• Inventory Collateralization & Warehouse receipt system – is a system of facilitating commodity trade and finance whereby the depositor (a producer, a farmer group, a trader, an exporter, a processor, an individual or a corporate body) of the commodities (collateral) in a designated warehouse enables access to credit by the depositor. One of the aims for the establishment of the system is price stability. In Tanzania, the system is gaining popularity and success especially in crops such as cotton, coffee, sunflowers, cashew nuts, rice, soya beans and maize.

A warehouse receipt system functions as one of the instruments involved in the transfer of ownership in both trades involving commodities as well as futures. The receipt (certificate of pledge) can be construed as a negotiable document, which can be made to the order of the company or the bearer of the document. A non-negotiable warehouse receipt will only allow delivery to the person or business that is named as the owner in the document. Most warehouse receipts are issued in negotiable form, making them eligible as collateral for loans.

In Tanzania, the Warehouse Receipts financing is governed by the Warehouse Receipt Act No 10 of 2005, warehouse regulation of 2006 and is monitored by the Tanzania Warehouse Licensing Board.

• Outgrowers financing system – this form of agri-financing is based on a premise that a prominent positive result of commercialisation in small-scale agriculture is the engagement of agro-industrial firms as partners in production and marketing.

Out-grower systems have been in existence for some time as a means of organizing the commercial production of both large-scale and small-scale farmers. Partnership between farmers, banks and agro-industrial firms is essential for the operationalization of this system of financing. With the liberalized marketing through the closing down of some of the marketing boards, private firms have become more involved in the out-growing using contract farming.


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Under the contract farming system a central processing and exporting unit purchases the harvests of individual farmers, and the terms of the purchase are arranged through contracts. The terms of the contract vary and usually specify how much produce the contractor will buy and at what price. The contractor often provides credit inputs and technical advice. The basis of such an arrangement is the commitment of the farmer to provide a specific commodity in quantities and at quality standards as determined by the purchaser and the commitment of the company to support the farmer’s production and to purchase the commodity.

• Agro-dealers (stockist) financing – In Tanzania, the undercapitalization of agriculture contributes to a situation in which less than 15% of farmers use improved seeds and fertilizers. Under the agro-dealers financing system commercial retailers or wholesale agro-dealers who undertake to maintain agricultural input stocks for sale to farmers (mainly seeds, fertilizer, pesticides and herbicides) are financed and/or guaranteed through NMB/Norfund/AGRA/FSDT and are also strengthened through training AGRA/CNFA as part of the Tanzania Agro-Dealers Strengthening Program (TASP).

Players in the Agricultural financing in Tanzania

Currently, sources of agriculture financing in Tanzania are through banks and financial institutions, NGOs, Development agencies and the Government.

Banks and financial institutions

Currently there are only a few banks that are involved in agriculture finance; the most prominent ones are NMB, CRDB, EXIM Bank, FBME, Kilimanjaro Corporative Bank and TIB.

NMB Bank

NMB introduced agriculture finance in its loan products back in 2004 and has since experienced a sharp rise in a number of customers and loans specifically in the area of warehousing receipt finance.

NMB has structured its agricultural loans as follows:

• Warehouse Receipt System, mainly financing coffee, cotton, sunflowers and cashew nuts. In operating this form of financing, NMB works closely with collateral managers, curing factories, ginneries, corporative societies and private companies;

• Out-growers’ financing schemes, under the scheme, NMB finances growers of tea, sugarcane, and barley and is working in joint ventures with tea and sugar companies for tea and sugar respectively and the Tanzania Breweries Ltd for barley.

• Agro-dealer (stockist) financing; Alliance for Green Revolution in Africa (AGRA), Financial Sector Deepening Trust Fund (FSDT), Citizens Network for Foreign Affairs (CNFA) and NMB are working closely with the Government (through the National Agricultural Input Voucher Scheme) as part of the Agro-Dealer Strengthening Program roll-out that has built a network of 840 agro-dealers focusing in giving farmers access to the government run fertilizer supply program. The program also provides innovative financing plan that strengthen and finances agro-dealers.

As of December 2009, total loans disbursed for the agricultural sector by NMB accounted for 15% of its total loan portfolio.

CRDB Bank

Originally, CRDB’s main objective was to finance rural and agricultural development projects. However, due to poor performance of many of its agricultural projects, the bank, in 1996 changed its operations to a fully fledged commercial bank with agriculture


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financing projects in its portfolio. To date, the bank is still one of the main providers of agriculture finance in the country.

The bank offers three main types of loan products in its agricultural financing window: (i) Agro-dealers (stockist) financing scheme; (ii) Warehouse receipt financing and (iii) Out growers financing schemes. However, most of CRDB lending activities to small business and agricultural related projects is done indirectly through SACCOS.

CRDB’s loans to agriculture are mainly for coffee, cotton, cashew nuts and tobacco. So far agriculture loans accounts for about 25% of CRDB’s total loans distributed as 75% in cotton, 20% in coffee, 2% in cashew nuts and 3% for other crops.

Exim Bank

Exim Bank started offering agriculture finance in 2003. This was when the Government accredited the Bank with the Agriculture inputs fund following the bank’s primary efforts of developing the agricultural sector in the country through loan financing. In the same year, the bank offered Tshs. 3 billion as agricultural inputs fund for financing agriculture. Since then, the bank has been giving loans to the farmers either through their SACCOS/AMCOS or directly to individual farmers and private companies.

The bank is an active participant in financing procurement, processing and packing of various export crops, mainly coffee, cashews and cotton as well as non-traditional crops such as sesame and pulses. The bank also finances procurement and distribution of fertilizers and other agricultural inputs to ensure growth and sustainability of such crops.

The bank provides two categories of loans namely: (i) Security based loans; and (ii) Commodity based loans.

FBME Bank has directed about 20 per cent of its total loan portfolio towards agricultural development in Tanzania. The bank offers credit to small and medium agricultural farmers mainly in Morogoro through warehouse receipt system. FBME works closely with warehouse operators, union of crop growers association, SACCOs and rice growers particularly in Ifakara to ensure that loans schemes for farmers are working efficiently.

Tanzania Investment Bank – following TIB recapitalisation in 2007, part of the bank’s loan portfolio was set aside in order to support farmers, about Tshs. 3 billion. Also the Government directed funds that were returned to the Bank of Tanzania External Payment Arrears (EPA) account to the enhancement of agricultural and livestock activities through TIB. Also, negotiations are underway between the Bank of China and the Tanzania Investment Bank to help the bank develop credit lines for farmers, the move aims at enhancing the TIB services to the farmers.

So far TIB have been supporting the floriculture sector for production of roses for export. The bank provides funding to the agriculture sector through community banks, SACCOS, NGOs and corporate agriculture.

Other Financial institutions

Apart from MFIs such as Pride, FINCA, Dunduliza, etc other most dominant financiers to the agriculture sector are member-based organizations such as Savings and Credit Co-operative Societies (SACCOS) and the Agricultural Marketing Co-operative Societies (AMCOS). Owing to the poor access of formal financial services in the rural areas, the formation of SACCOS and AMCOS was advocated and encouraged by the Government as one way of promoting access to financial services. Members of these schemes usually reside in the same village, and rely on the same primary cooperative society for crop sales. Farmers under this scheme open a group share account with a convenient bank catering for their needs in the area. Crop sales are paid to farmers through this account.


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Development agencies and NGOs

Other major players in the Tanzanian agriculture sector are development agencies and NGOs, most prominent ones being the EU, USAID, World Bank, Norfund, Tanzania Gatsby Trust, AGRA, Private Agriculture Sector Support (PASS), CNFA, FSDT, Technosave, JCS Technologies and others. Their role varies from financing technical training to farmers and agro-dealers, research on agro-technology, access and market linkages to financing and providing guarantee cushions against losses that could result from defaulted agricultural loans.

The Outlook

The Tanzania National Business Council (TNBC)’s two days meeting that was held on 2nd and 3rd June 2009, among others, resolved to embark on KILIMO KWANZA as Tanzania’s Green Revolution to transform its agriculture into a modern and commercial sector. KILIMO KWANZA comprises the following ten actionable pillars:

• Political will to push for agricultural transformation; • Enhanced financing for agriculture; • Institutional re-organisation and management of agriculture; • Paradigm shift to strategic agricultural production; • Land availability for agriculture; • Incentives to stimulate investment in agriculture; • Industrialisation for agricultural transformation; • Science, technology and human resources to support agricultural transformation; • Infrastructure Development to support agricultural transformation; and • Mobilisation of Tanzanians to support and participate in the implementation of Kilimo

Kwanza.

With the political willingness, the agriculture sector might attract investors and increase financiers’ appetite and a better appreciation of the sector. Commercially run large farms might consider raising long term finance through IPOs the same as KAKUZI, REA VIPINGO or SASINI in Kenya which are listed in the Nairobi Stock Exchange. As per the Kilimo Kwanza pact, the following are efforts that if implemented might see a substantial increase in agricultural finance in the near future:

• the government intends to increase the budgetary allocation to the sector to reach a minimum of 10% from the FY2010/11;

• efforts are underway, within the supervision of the Bank of Tanzania, to establish the Tanzania Agricultural Development Bank (TADB) that will start with a minimum capital of US$ 500 million;

• efforts are underway to establish special agricultural development finance window in banks such as Tanzania Development Bank, Tanzania Postal Bank, etc with minimal restriction to financing access by commercial farmers;

• there are efforts by the Government to negotiate with pension funds so that pension funds can start lending to commercial farmers, with minimal restrictions;

• the Unit Trust of Tanzania is considering setting up the Vision Tanzania Fund, a venture capital fund that will specialise in providing SMEs long-term financing for the agricultural sector and other processing and manufacturing sectors.

It is a fact that Tanzania needs innovative, long-term and large scale financing facilities to enable the agricultural sector play a greater role in the economic development and poverty eradication in Tanzania. The Kilimo Kwanza broad based and wholesale initiative, if implemented can be a break through towards achieving the goal.


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4 SECTOR’S PERFORMANCE OVERVIEW As at 31 December 2009, the Tanzania Banking Sector had 27 commercial banks, 8 regional unit financial institutions, and 3 financial institutions making a total of 38 banking sector organisations. This excludes Efatha Bank (only recently started and 2009 data not available) and FBME (whose activities are substantially outside Tanzania and Tanzania segment results are not produced).

Table 2: Snapshot of the Balance Sheet and percentage change for over 4 years

Balance Sheet 2009 2008 2007 2006 2009 2008 2007 (Amounts in millions of TZS) % Change Cash and balances with BoT 1,412,919 859,552 744,026 478,101 64% 16% 56% Balances with other banks 1,458,818 1,113,656 1,258,543 1,070,840 31% -12% 18% Investment in Government securities 1,638,858 1,450,900 1,359,670 1,175,796 13% 7% 16% Investment in debt securities 80,612 97,715 243,821 38,610 -18% -60% 531% Loans, Advances & Overdrafts 4,534,133 4,163,019 2,833,031 2,214,343 9% 47% 28% Other assets 691,909 591,671 464,742 316,338 17% 27% 47% Total Assets 9,817,249 8,276,512 6,903,832 5,294,029 19% 20% 30% Customer deposits 7,906,566 6,400,796 5,229,454 4,239,597 24% 22% 23% Deposits from other banks 253,706 350,531 510,985 255,303 -28% -31% 100% Other liabilities 408,201 551,393 384,969 274,138 -26% 43% 40% Total Liabilities 8,568,473 7,302,720 6,125,408 4,769,037 17% 19% 28% Paid up share capital 407,002 293,821 255,383 177,725 39% 15% 44% Retained earnings (current & prior years) 720,008 565,348 431,809 282,512 27% 31% 53% Other shareholder funds 121,766 114,623 91,232 64,755 6% 26% 41% Total Shareholder Funds 1,248,776 973,792 778,424 524,992 28% 25% 48%

Total assets increased to TZS 9,817,249 million representing an increase of 19% in 2009 compared to 20% (2008) and 30% (2007). This is similar to changes in broad money supply and 10% above the absolute levels of money supply.

What is noticeable in 2009 is the low (single digit) growth in loans and advances and restricted availability to invest in Government securities (up 13% in 2009) leading to excess liquidity and higher placements on the inter-bank market (up 31% in 2009).

The large group still dominates the market measured by total assets though the annual share continues to decline as in previous years. Their share of total assets was 77.9% compared to 80.4% in 2008 and 82.8% in 2007. Medium group continues to eat into the large bank group share where their total assets to the banking sector have increased to 17.6% in 2009 from 15.5% in 2008 and 12.7% in 2007. NBFI’s and Regional & Small continue to hold a market share of around 3% and 1% respectively.

The growth in assets has been financed almost entirely by an equivalent monetary increase in customer deposits (which continued to grow at around 24% in 2009) and only partly by the increase in shareholder funds (28% in 2009) thus resulting in improved liquidity and capital adequacy ratios.


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Table 3: Snapshot of the Income Statement and percentage change for over 4 years

Income Statement 2009 2008 2007 2006 2009 2008 2007 (Amounts in millions of TZS) % Change Interest income 787,051 679,764 605,584 439,222 16% 12% 38%

Interest expense -

204,079 -

154,987 -

162,077 -107,043 32% -4% 51% Net Interest Income 582,972 524,777 443,507 332,179 11% 18% 34% Bad debts written off -2,899 -211 -926 -1,441 1273% -77% -36% Provision for bad & doubtful debts -71,380 -28,181 -17,611 -53,919 153% 60% -67% Non-interest Income 323,246 260,762 223,744 172,387 24% 17% 30% Foreign exchange gain/loss 122,027 91,389 73,976 44,422 34% 24% 67% Fees, commissions & other income 177,080 150,271 131,756 104,229 18% 14% 26% Other Income 24,139 19,102 18,011 23,737 26% 6% -24% Gross Income 831,940 757,147 648,714 449,207 10% 17% 44%

Non- interest expense -

530,378 -

457,966 -

350,540 -261,762 16% 31% 34% Taxation -84,305 -90,401 -89,072 -56,507 Net Income after tax 217,257 208,780 209,103 130,938 4% 0% 60% Number of employees 9,801 9,020 7,776 6,167 9% 16% 26%

The income statement also shows that income growth (10% in 2009) has not matched asset growth (19% in 2009). This is due to firstly some pressure on net interest margins and secondly to the large increase in bad debt provisions.

Also with non-interest expense increasing by 16% in 2009 this has impacted bottom line profits which only grew 4% in 2009.


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5 PROFITABILITY Profitability analysis can use a number of different ratios such as those presented in table 4 below. Bank profits are affected by a number of key areas including: asset utilisation, interest rates earned and paid and expense base.

Asset utilisation has fallen in 2009 as seen by the decline in earning assets to total assets (79% in 2009 from 83% in 2008), loans and advances to total assets (46% in 2009 from 50% in 2008) and gross loans to deposits (59% in 2009 from 66% in 2008 – well below the regulatory 80% threshold).

Net interest margin has also fallen (13.4% in 2009 from 15.0% in 2008) as has interest margin to average earning assets (8.0% in 2009 from 8.4% in 2008). Non interest expense to gross income has also fallen slightly (48% in 2009 from 49% in 2008).

The above factors have resulted in flat sector earnings after tax in monetary values in 2009 (as was the case in 2008). This performance is reflected in ROAA and ROAE ratios which have decreased to 2.4% in 2009 from 2.8% in 2008 for ROAA and to 20% in 2009 from 24% in 2008 for ROAE.

Table 4 : Overview of Earnings & Profitability ratios for the past 4 years

Tanzania Banking Sector (Total)

Earnings & Profitability Ratios 2009 2008 2007 2006

Loans & Advances to Total Assets 46% 50% 41% 42%

Non Interest Expense to Interest Income 67% 67% 58% 59%

ROAA 2.4% 2.8% 3.4% 2.5%

ROAE 20% 24% 32% 25%

Interest Margin to Average Earning Assets 8.0% 8.4% 8.7% 7.4%

Non Interest Expense to Gross Income 48% 49% 42% 43%

Gross Loans to Deposits 59% 66% 56% 54%

Interest Income to Total Income 71% 72% 73% 72%

Interest Margin 74% 77% 73% 76%

Earning Assets to Total Assets 79% 83% 83% 85%

Net Interest Margin 13.4% 15.0% 17.6% 15.0%

Total Expenses to Interest Income 93% 90% 85% 84%

The majority of banks (28 of 38) reported profits in 2009 results with the exception of the following 10 banks: KCB, Barclays, S&F, Access, UBA, Mbinga, Kili Coop, TWB, Mkombozi and TCB, which recorded losses before and after tax. In mitigation, Access, UBA, TWB, Mkombozi and TCB are still in their start up stage of operations. Noticeably, Bank M this year has managed to report profit after tax of TZS 522 million in its second full year of operation.

For the other five loss-making banks a number of factors are relevant including: high levels of loan loss provisions and non-interest expense in excess of total income.

5.1 Return on Assets and Equity3

The sector average for Return on Average Assets (ROAA) has remained above 2% for the past four years; 2009 (2.4%), 2008 (2.8%), 2007 (3.4%) and 2006 (2.5%) though currently declining. As would be expected Return on Average Equity (ROAE) shows a parallel trend currently standing at 20% in 2009 down from the high of 32% in 2007.

3 The ratios have been calculated using Post Tax Profit


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As can be seen on the chart below, the top six performing banks in ROAA were Citibank (5.7%) followed by NBC (3.4%), CF Union (3.4%), NMB (3.1%), DCB (3.1%) and CRDB (2.8). Similarly, for the ROAE the highest performing banks were: NBC and NMB at 27%, CRDB, StanChart and CF Union at 26% and Citibank at 25%.

Figure 1: ROAA for Banking Sector

Taking into consideration the peer groups’ comparison, the large group still leads in ROAA in all the four years than other groups as shown on the chart below:

Figure 2: ROAA for the peer groups

The table above shows that ROAA in 2009 for Medium, NBFIs, Regional & Small Banks have converged around 1% while that of large banks remained well above them (at 2.8%)

In the last four years large group had the highest ROAE in the sector. In 2009, Large banks had a ROAE of 24%, Medium had a ROAE of 7% and NBFI and Regional & Small were at 5%. It is noted that the sectors ROAE decreased this year (at 20%) compared to previous year (at 24%). The decrease can be attributed to increased shareholders funds.

The following chart depicts the trend of declining ROAE ratios over the past three years for all peer groups.


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Figure 3: ROAE for peer groups


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6 EFFICIENCY Efficiency is vital to bank operations as it directly translates into profitability. As a result of this, efficiency ratios and profitability ratios are interrelated. This direct relationship between these two types of ratios will mean that whenever there is increased efficiency, there will be increased profitability. Various ratios can be used to measure efficiency of a bank. Some of those ratios are provided in the table 5 below.

6.1 Overview of the sectors’ efficiency

The sector’s average operating efficiency in 2009 was 12% which was up by 1% compared to that of 2008. This indicates that in general, the sector has become less efficient in its lending operations compared to 2008. These results reflect in the decreased profitability as shown in section 5.

Table 5: Overview of efficiency ratios over the last four years


Efficiency Ratios 2009 2008 2007 2006

Operating Efficiency 11.8% 11.4% 12.3% 11.0%

Average Loan Portfolio (TZS in Millions) 4,348,576 3,498,025 2,523,687 2,214,343

Loan Portfolio per Staff 444 388 325 359

Earnings per Staff 31 33 38 30

Staff Income to Staff Portfolio 6.9% 8.6% 11.8% 8.5%

Portfolio Yield 13.0% 12.9% 14.8% 13.4%

Gross Yield on Earning Assets 10.8% 10.8% 11.9% 9.7%

Rates Paid on Funds 2.5% 2.3% 2.8% 2.4%

Portfolio Yield to Operating Efficiency 1.2% 1.4% 2.5% 2.3%

Yield to Rate on Funds 10.5% 10.6% 12.0% 11.0%

Govt Securities as % Earning Assets 22.0% 22.7% 28.1% 27.0%

6.2 Operating Efficiency

From the chart below, it can be seen that, the most efficient banks in 2009 were: BOB (6%), Citibank( 6%),CF Union (8%), Habib (8%) and Stanbic(9%). On the other hand, the least efficient banks were UBA (126%), TCB (39%), TBP (37%), Access (32%),Mbinga (30%) and Mufindi (28%). The high inefficiency ratio for UBA is because the bank started its operations in the last quarter of 2009.

Among the large banks, Citibank was the most efficient at 6% followed by Stanchart at 9%. The least efficient banks in this group were Barclays and NMB at 15% and 14% respectively.

In the medium banks group, BOB was the most efficient bank followed by CF Union and Habib at 8%. The least efficient banks (apart from UBA) were Access and Akiba at 32% and 24% respectively.


15

Figure 4: Banking sector operating efficiency

Generally, large banks were most efficient in the sector while NBFI’s were the least efficient as provided in the chart below:

Figure 5: Peer group’s operating efficiency

6.3 Portfolio Yield and Portfolio Yield to Operating Efficiency

Portfolio Yield tells what the bank has earned on its loans & advances portfolio4. In 2009 the sector’s average Portfolio Yield was maintained at 2008 levels at 13%.

As shown on the chart below, banks with the highest yield were Mufindi (31%), TPB and Access (25%), Akiba and UBA (22%), Mbinga (20%) and NMB and DCB(19%). NMB had

4 This ratio includes Interbank loans in its calculations


16

the highest yield among the large banks group. This could be due to the type of customers that the bank serves which are considered riskier compared to corporate customers that the rest of the large group banks serve.

Figure 6: Portfolio Yield: Banking sector

The chart below shows portfolio yield among the peer groups over the last four years

Table 6: Portfolio Yield for peer groups

Portfolio Yield to Operating Efficiency is a ratio in which the yield is compared to the costs incurred to generate that yield.

The sector’s average yield to operating efficiency ratio for 2009 was at 1.2% (1.4% in 2008). The banks with the highest ratios were TIB (6%), NMB (5%), NBC, CF Union, DCB, Mufindi, Mwanga and Uchumi at (3%). 18 out of 38 banks had negative ratios.

The two charts below show portfolio yield to operating efficiency for individual banks and peer groups:


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Figure 7: Portfolio Yield to Operating Efficiency (%)

In terms of peer groups, in 2009, only large banks group and Regional and Small banks have been reporting positive Portfolio Yield to Operating Efficiency for the last four years as per the chart below.

Figure 8: Portfolio Yield to Operating Efficiency in peer groups

6.4 Staff Productivity

Staff productivity is one of the ratios which measures efficiency. In theory, it measures each staff’s contribution to profitability.

Earnings per staff for the sector was TZS 31 million with Citibank having the highest earnings per staff at TZS 579 million, followed by Stanchart(TZS 84 million), CF Union (TZS 61 million), BOB (TZS 60 million)and Stanbic (TZS 49 million). The least efficient bank in terms of earnings per staff was UBA (TZS -60 million) followed by TWB (TZS -27 million), Mkombozi (TZS -26 million), TCB (TZS -12 million)and Kili Coop (TZS -12 million). The chart below shows earnings per staff for all banks.


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Figure 9: Earnings per staff

Large banks group had the highest earnings per staff at 40 followed by Medium, NBFIs and Regional and Small at 9, 6 and 5. The following chart provides peer groups earning per staff.

Table 7: Earnings per staff in peer groups

The other staff productivity-related ratio is the staff income to staff portfolio which shows the net income each staff earned in percentage terms from the average portfolio each theoretically manages. The ratio has been calculated by using two ratios namely; net income per staff and portfolio per staff.

The average staff income to staff portfolio ratio for the whole sector was at 7% (9% in 2008).

Large group banks leads in staff income to portfolio as per the chart below.


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Figure 10: Staff income to staff portfolio

6.5 Rates Paid on Funds

Rates paid on funds shows the average rate a bank pays on borrowed funds. In the Tanzania Banking sector, customer deposits make up most of the funds borrowed.

In 2009, the sector rates paid on funds ratio averaged at 2.5% (2008 was at 2.3%). The banks which had the highest rates on funds were; Azania (7.5%), DCB (6.7%), Mwanga (6.2%), Bank M (5.8%) and BancABC (5.7%). On the other hand, the least expensive ones were Mkombozi (0.3%), UBA (0.8%), NMB (0.9%), TWB (1.0%) and Stanbic (1.2%)

6.6 Portfolio Quality

The sectors provision for bad and doubtful debts have increased to 153% (60% in 2008), actual bad debts written off increased by 1273% (77% decrease in 2008).

Non-performing loans to gross loans & advances showed the sector an average of 6.4% (in 2008 was at 4.2%).


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7 CAPITAL ADEQUACY

7.1 Capital Adequacy Overview

Capital adequacy can be analysed using various ratios as provided in table 8 below. In general Capital Adequacy ratios improved compared to 2008.

Table 8: Capital Adequacy overview


Financial Soundness Ratios 2009 2008 2007 2006

Non-Performing Loans to Gross Loans & Advances 6.4% 4.2% 6.1% 5.2%

Total Capital to RWAs 20.8% 19.0% 19.6% 16.9%

Core Capital to RWAs 19.6% 17.4% 18.0% 15.6%

Interest Margin to Gross Income 53% 56% 53% 54%

Liquid Assets to Total Assets 48% 44% 54% 54%

Liquid Assets to Deposit Liabilities 58% 54% 65% 63%

Total Capital to Deposit Liabilities 15.3% 14.2% 13.6% 11.6%

Capital Adequacy 12.7% 11.8% 11.3% 9.9%

7.2 Asset Structure Overview

The balance sheet size has increased to TZS 9,817 billion in 2009 from TZS 8,276 billion in 2008 representing a 19% increase. On the other hand, deposits increased by 24% (23% in 2008)

Table 9: Balance Sheet Structure for the 4 years

Amounts in Billions of TZS Dec-09 %

Change Dec-08 %

Change Dec-07 %

change Dec-06

Loans, Advances & Overdrafts 4,534 9% 4,163 47% 2,833 28% 2,214

Customer deposits 7,907 24% 6,401 22% 5,229 23% 4,240

Total Assets 9,817 19% 8,277 20% 6,904 30% 5,294

Loans and advances represented 46% of the sector’s total assets which was lower than the 50% in 2008. This was followed by investment in Government Securities (17%) which dropped from 18% in 2008. Inter-bank loans represented 15% of total assets, up from 13% in 2008.

Table 10: Major components & % share of total assets

Amounts in Billions of TZS Dec-09 %

share Dec-08 %

Share Dec-07 %

Share Dec-06 %

Share

Balances with BOT 905 9% 402 5% 370 5% 237 4%

Interbank balance 1,459 15% 1,114 13% 1,259 18% 1,071 20%

Investment in Govt securities 1,639 17% 1,451 18% 1,360 20% 1,176 22%

Loans, Advances & Overdrafts 4,534 46% 4,163 50% 2,833 41% 2,214 42%

Total 9,817 8,277 6,904 5,294

The dominance in assets share of the Top 8 continues to decrease from 80% in 2008 to 78% due to the medium group taking share from them and the entry of a number of new banks since 2009. See the table below.


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Table 11: Large banks and their share of sector’s Total Assets

2009 2008 2007 2006

Barclays 4% 7% 7% 6%

Citibank 4% 4% 6% 9%

CRDB 19% 18% 17% 17%

Exim 6% 6% 5% 5%

NBC 13% 14% 14% 15%

NMB 17% 17% 17% 15%

Stan Chart 9% 10% 9% 11%

Stanbic 6% 6% 7% 6%

Total 78% 80% 83% 84%

Six banks increased their assets significantly: TCB (152%), Access (149%), BOI (119%), Bank M (58%), CBA (56%), and DCB (50%). The only bank that decreased its assets was Barclays (20%).

Large banks group still dominates the banking sector as per the table below:

Table 12: Assets by peer group

Amount in millions of TZS 2009 2008 2007 2006

Large 7,668,696 6,663,505 5,714,641 4,462,185

Medium 1,722,985 1,284,190 874,632 605,171

NBFIs 323,301 260,229 256,468 178,226

Regional & Small 119,364 76,281 58,091 48,447

Total Sector 9,834,346 8,284,206 6,903,832 5,294,029

In terms of asset composition, loans, advances & overdrafts comprise the largest portion of the sectors balance sheet as per the chart below:

Figure 11: Assets composition


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7.3 Funding (Liabilities) Structure Analysis

Customers’ deposits were the largest component in the funding structure at 81% up from 77% in 2008. Core capital contributed 12%, other liabilities 4%, deposits from other banks 3% and other capital 1%. Customer deposits were up by 24% compared to 2008 which showed only a 23% increase. The increase was due to entry of new banks and increased customers base for the banking sector.

Table 13: Composition of total liabilities and % increases

Amounts in Billions of TZS 2009 % Share 2008

% Share 2007

% Share 2006

% Share

Customer deposits 7,907 67% 6,401 77% 5,229 76% 4,240 80%

Deposits from other banks 254 2% 351 4% 511 7% 255 5%

Other Liabilities 408 3% 551 7% 385 6% 274 5%

Core Capital 1,173 10% 891 11% 717 10% 483 9%

Other Capital 76 1% 83 1% 62 1% 42 1%

Total 11,826 83% 8,277 100% 6,904 100% 5,294 100% Figure 12: Funding composition

The chart below shows the funding composition over the past four years.


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Figure 13: Funding structure

Below are the Peer group’s percentage shares of customer deposits.

Figure 14: Peer group share of customer deposits

The following chart shows institutions in the banking sector share of customers deposit


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Figure 15: Share of customer deposits among large banks

Share of customers’ deposits among medium banks is given in the chart below:

Figure 16: Share of customer deposits among medium banks

Share of customers’ deposits among NBFIs is provided in the chart below:

Figure 17: Share of customer deposits among NBFI’s


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Share of customers deposit among Small and Regional Banks is provided below

Figure 18: Share of customer deposits among small and regional banks.

The four peer group tables above show the percent share of each bank within its peer group and how that has changed in the period 2006-2009.

In 2009 customer deposits for the sector increased by TZS 1,505 billion (24%. Four of the banks accounted for 60.6% of this being CRDB (TZS 348 billion), NMB (TZS 259 billion), Stanbic (TZS 160 billion) and NBC (TZS 146 billion)

7.4 Financial Soundness

During 2009, the sector aggregate capital (Total Shareholders’ Funds) increased by 28%, (25% in 2008). The increase was mainly contributed by retained earnings 30% (28% in 2008) and paid up share capital 39% (14% in 2008).

Table 14: Snapshot of Share Capital and % increases

Amounts in Billions of TZS 2009 % Increase 2008 % Increase 2007 % Increase 2006

Share capital 453 39% 326 14% 285 42% 200

Retained earnings 535 30% 411 28% 321 65% 195

Profit and Loss 185 20% 155 40% 110 26% 87

Other capital 76 -8% 83 34% 62 47% 42

Total Shareholders Funds 1,249 28% 974 25% 778 48%

525

The chart below shows changes in the capital structure


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Figure 19: Changes in capital structure

In relation to Risk Weighted Assets (RWAs) and off balance sheet items the sector average for core capital to RWAs was 20% and for the total capital to RWAs it was 21%.These are well above the statutory minimum of 10% and 12% respectively. Two banks were below the minimum.

Financial soundness has also been measured using total capital to total deposits liabilities which has a statutory minimum of 8%. The sector average ratio was 15%. Again, this is very comfortably above the minimum. Individually only one bank was below the minimum.

Figure 20: Total capital to RWAs

7.5 Liquidity Analysis

The sector recorded an overall ratio of liquid assets to total assets of 48% (44% in 2008). The liquid assets to deposit liabilities ratio was 58%, (54% in 2008). All banks were above the minimum. This high sector ratio is contributed partly by low lending and new entrants with very high liquidity ratios (UBA 457% and Mkombozi 336%)


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Also, the practice appears to be for several banks in Tanzania tend to keep substantial amounts of their deposits in the form of inter-bank placements and short-term Government and debt instruments instead of lending.

The ratios grew among all banking categories except for medium banks which decreased to 54% from 56% in 2008.

Figure 21: Liquid Assets to Deposit Liabilities

7.6 Earnings Analysis

Gross income grew by 10% (was 17% in 2008) as per the table below:

Table 15: Gross income increase.

Year Gross Income % Increase 2009 831,940 10% 2008 757,147 17% 2007 648,714 44% 2006 449,207

Most banks reported increased gross income with TCB, Access and BOI coming at the top at 232%, 209% and 98% respectively.

Interest income grew by 16% in 2009 while interest expense grew by 32%.

.


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APPENDICES: Summary of Ratios for the Banks


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Tables in the Appendices Appendix Table 1: Total Assets .......................................................................................... 30 Appendix Table 2: Loans, Advances and Overdrafts .......................................................... 31 Appendix Table 3: Customers Deposits .............................................................................. 32 Appendix Table 4: Number of Staff .................................................................................... 33 Appendix Table 5: Loans & advances to Total Assets ........................................................ 34 Appendix Table 6: Non Interest Expenses to Interest Income ............................................ 35 Appendix Table 7: ROAA.................................................................................................... 36 Appendix Table 8: ROAE .................................................................................................... 37 Appendix Table 9: Interest Margin to Average Earning Assets .......................................... 38 Appendix Table 10: Non Interest Expenses to Gross Income ............................................. 39 Appendix Table 11: Gross Loans to Deposits ..................................................................... 40 Appendix Table 12: Interest Income to Total income ......................................................... 41 Appendix Table 13: Interest Margin ................................................................................... 42 Appendix Table 14: Earning Assets to Total Assets ........................................................... 43 Appendix Table 15: Net Interest Margin ............................................................................ 44 Appendix Table 16: Total Expenses to Interest Income ..................................................... 45 Appendix Table 17: Interest Margin to Gross Income......................................................... 46 Appendix Table 18: Operating Efficiency ........................................................................... 47 Appendix Table 19: Average Loan Portfolio ...................................................................... 48 Appendix Table 20: Loan Portfolio per Staff ...................................................................... 49 Appendix Table 21: Earnings Per Staff .............................................................................. 50 Appendix Table 22: Staff Income to Staff Portfolio ........................................................... 51 Appendix Table 23: Portfolio Yield .................................................................................... 52 Appendix Table 24: Gross Yield on Earning Assets ............................................................ 53 Appendix Table 25: Rates Paid on Funds ........................................................................... 54 Appendix Table 26: Portfolio Yield to Operating Efficiency ............................................... 55 Appendix Table 27: Yield to Rate on Funds ....................................................................... 56 Appendix Table 28: Government Securities as % of Earning Assets ................................... 57 Appendix Table 29: Capital Adequacy ............................................................................... 58 Appendix Table 30: Non- Performing Loans to Gross Loans & Advances ........................... 59 Appendix Table 31: Total Capital to RWAs ......................................................................... 60 Appendix Table 32: Core Capital to RWAs ......................................................................... 61 Appendix Table 33: Liquid Assets to Total Assets.............................................................. 62 Appendix Table 34: Liquid Assets to Deposit Liabilities ..................................................... 63 Appendix Table 35: Capital to Deposit Liabilities ............................................................... 64


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Appendix Table 1: Total Assets

Total Assets Tsh millions 2009 2008 2007 2006 Barclays 433,407 542,693 475,651 325,091

Citibank 403,672 344,095 446,107 488,222

CRDB 1,854,868 1,449,800 1,142,669 898,303

Exim 566,433 478,429 376,612 267,020

NBC 1,294,606 1,135,527 962,634 810,442

NMB 1,669,333 1,384,268 1,158,310 795,425

Stan Chart 853,044 851,443 650,641 556,585

Stanbic 576,236 469,556 502,017 321,097

Access 20,809 8,372 6,397 0

Akiba CB 74,062 59,103 43,391 37,060

Azania 149,153 103,965 76,412 50,553

BancABC 164,226 139,376 92,030 47,693

Bank M 106,508 67,587 31,200 0

BOA 166,179 123,443 89,485 68,164

BOB 81,996 69,508 60,480 42,929

BOI 29,601 13,529 0 0

CBA 159,053 102,045 51,935 23,155

CF Union 80,009 63,850 42,566 29,509

DTrust 203,524 156,873 107,785 75,539

Habib 74,356 66,939 52,944 40,420

ICB 61,804 42,268 37,515 31,223

KCB 142,685 107,537 66,483 50,944

PBZ 120,445 102,588 73,431 72,327

S&F 65,550 57,207 42,578 35,655

UBA 23,025 0 0 0

TIB 169,617 134,567 135,438 76,257

TPB 97,361 86,489 84,445 73,278

Twiga 56,323 39,173 36,585 28,691 DCB 71,837 47,850 34,543 29,068 Kagera 5,219 4,600 3,336 2,600 Kili Coop 5,576 5,092 5,291 4,875 Mbinga 2,534 2,233 2,095 1,694 Mkombozi 8,700 0 0 0 Mufindi 4,844 4,296 4,055 3,470 Mwanga 6,441 5,506 4,233 3,084 TCB 603 240 0 0 TWB 5,166 0 0 0 Uchumi 8,444 6,464 4,538 3,656

Total Sector 9,817,249 8,276,512 6,903,832 5,294,029 Large 7,651,599 6,655,811 5,714,641 4,462,185 Medium 1,722,985 1,284,190 874,632 605,171 NBFIs 323,301 260,229 256,468 178,226 Regional & Small 119,364 76,281 58,091 48,447

Total Sector 9,817,249 8,276,512 6,903,832 5,294,029


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Appendix Table 2: Loans, Advances and Overdrafts

Loans, Advances and Overdrafts

Tsh millions 2009 2008 2007 2006

Barclays 232,266 293,895 221,170 192,238

Citibank 124,736 146,653 94,654 66,053

CRDB 949,505 836,803 588,347 405,772

Exim 250,592 201,240 162,197 123,095

NBC 676,500 664,550 463,305 358,117

NMB 672,579 570,578 345,210 137,457

Stan Chart 349,689 437,065 333,651 434,304

Stanbic 208,885 191,521 128,636 150,298

Access 12,159 3,181 268 0

Akiba CB 44,558 32,375 25,281 18,672

Azania 105,759 80,434 49,680 36,606

BancABC 97,896 98,742 37,432 20,814

Bank M 76,714 38,154 16,040 0

BOA 71,102 41,179 24,102 17,475

BOB 33,894 21,111 17,416 22,355

BOI 13,586 3,868 0 0

CBA 60,953 38,901 20,888 8,118

CF Union 43,164 34,771 20,923 14,064

DTrust 120,136 92,848 62,325 42,442

Habib 28,583 22,526 15,412 14,291

ICB 12,272 12,917 11,669 10,580

KCB 83,227 59,508 34,483 17,264

PBZ 31,407 24,824 14,602 13,820 S&F 24,274 28,110 22,784 20,723 UBA 103 0 0 0

TIB 81,773 71,580 40,458 27,968 TPB 38,178 45,644 36,400 23,260 Twiga 29,444 24,161 10,682 8,744 DCB 41,167 28,645 21,243 18,368

Kagera 3,317 3,533 2,194 1,727 Kili Coop 2,372 2,953 3,082 3,057 Mbinga 1,112 1,156 1,053 483 Mkombozi 379 0 0 0 Mufindi 2,467 2,321 2,124 2,461 Mwanga 3,795 3,686 2,642 1,519 TCB 443 24 0 0 TWB 289 0 0 0

Uchumi 4,857 3,563 2,678 2,199

Total Sector 4,534,133 4,163,019 2,833,031 2,214,343 Large 3,464,752 3,342,305 2,337,170 1,867,334 Medium 859,788 633,449 373,305 257,224

NBFIs 149,395 141,385 87,540 59,972

Regional & Small 60,197 45,880 35,016 29,814

Total Sector 4,534,133 4,163,019 2,833,031 2,214,343


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Appendix Table 3: Customers Deposits

Customer Deposits Tsh millions 2009 2008 2007 2006

Barclays 349,300 402,433 249,893 198,919

Citibank 286,287 217,658 272,313 356,049

CRDB 1,621,019 1,273,082 1,013,331 791,531

Exim 410,847 323,206 265,617 193,026

NBC 1,045,978 899,774 785,472 678,679

NMB 1,459,399 1,200,484 1,012,690 688,097

Stan Chart 650,386 593,368 485,588 463,685

Stanbic 443,292 283,602 314,570 248,138

Access 12,017 2,746 136 0

Akiba CB 59,796 44,656 35,196 28,969

Azania 120,854 80,586 55,213 35,326

BancABC 142,582 71,403 27,613 32,132

Bank M 83,107 50,872 20,830 0

BOA 146,433 104,806 73,065 50,302

BOB 64,167 52,249 46,388 30,149

BOI 14,784 5,107 0 0

CBA 87,467 52,328 16,196 4,565

CF Union 64,041 53,289 34,246 23,526

DTrust 164,563 127,410 85,328 64,054

Habib 65,545 58,517 46,101 35,277

ICB 50,968 34,342 30,453 27,254

KCB 108,212 91,960 47,620 33,682 PBZ 96,644 82,276 58,204 65,143 S&F 44,702 48,943 35,849 29,855 UBA 4,257 0 0 0 TIB 88,963 76,679 69,792 34,284 TPB 88,479 79,637 73,569 63,075 Twiga 46,412 32,535 27,727 23,629

DCB 55,767 35,143 28,498 24,893 Kagera 4,224 3,398 2,517 2,220 Kili Coop 5,380 4,647 4,264 3,650 Mbinga 2,008 1,593 1,616 1,439 Mkombozi 2,195 0 0 0 Mufindi 3,474 2,958 3,026 2,845 Mwanga 3,344 4,468 2,990 2,176 TCB 79 22 0 0 TWB 2,769 0 0 0 Uchumi 6,825 4,620 3,543 3,027

Total Sector 7,906,566 6,400,796 5,229,454 4,239,597 Large 6,266,508 5,193,607 4,399,474 3,618,124

Medium 1,330,139 961,490 612,438 460,234

NBFIs 223,854 188,851 171,088 120,988

Regional & Small 86,064 56,848 46,454 40,250

Total Sector 7,906,566 6,400,796 5,229,454 4,239,597


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Appendix Table 4: Number of Staff

Number of Employees Total 2009 2008 2007 2006

Barclays 634 758 567 161

Citibank 55 60 60 65

CRDB 1,311 1,249 1,153 996

Exim 377 324 258 204

NBC 1,389 1,343 1,141 857

NMB 2,478 2,020 1,869 1,750

Stan Chart 335 435 400 296

Stanbic 328 306 301 270

Access 163 138 42 0

Akiba CB 302 255 232 227

Azania 159 154 100 72

BancABC 76 38 38 28

Bank M 104 80 43 0

BOA 161 128 90 70

BOB 34 27 26 18

BOI 16 15 0 0

CBA 74 61 50 42

CF Union 57 51 47 45

DTrust 177 151 142 113

Habib 79 78 74 72

ICB 88 76 72 45

KCB 235 198 136 100

PBZ 126 115 85 72

S&F 74 74 72 0

UBA 32 0 0 0

TIB 108 101 83 81 TPB 409 429 411 393 Twiga 100 103 95 80 DCB 114 102 72 61 Kagera 20 21 12 0 Kili Coop 29 28 29 0 Mbinga 33 24 22 20 Mkombozi 25 0 0 0 Mufindi 26 24 20 0 Mwanga 26 25 19 15 TCB 9 10 0 0 TWB 16 0 0 0 Uchumi 22 19 15 14

Total Sector 9,801 9,020 7,776 6,167 Large 6,907 6,495 5,749 4,599 Medium 1,957 1,639 1,249 904 NBFIs 617 633 589 554

Regional & Small 320 253 189 110

Total Sector 9,801 9,020 7,776 6,167


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Appendix Table 5: Loans & advances to Total Assets

Earnings & Profitability Ratios

Loans & Advances to Total Assets

2009 2008 2007 2006 Barclays 54% 54% 46% 59% Citibank 31% 43% 21% 14% CRDB 51% 58% 51% 45% Exim 44% 42% 43% 46% NBC 52% 59% 48% 44% NMB 40% 41% 30% 17% Stan Chart 41% 51% 51% 78% Stanbic 36% 41% 26% 47% Access 58% 38% 4% Akiba CB 60% 55% 58% 50% Azania 71% 77% 65% 72% BancABC 60% 71% 41% 44% Bank M 72% 56% 51% BOA 43% 33% 27% 26% BOB 41% 30% 29% 52% BOI 46% 29% CBA 38% 38% 40% 35% CF Union 54% 54% 49% 48% DTrust 59% 59% 58% 56% Habib 38% 34% 29% 35% ICB 20% 31% 31% 34% KCB 58% 55% 52% 34% PBZ 26% 24% 20% 19% S&F 37% 49% 54% 58% UBA 0% TIB 48% 53% 30% 37% TPB 39% 53% 43% 32% Twiga 52% 62% 29% 30% DCB 57% 60% 61% 63% Kagera 64% 77% 66% 66% Kili Coop 43% 58% 58% 63% Mbinga 44% 52% 50% 29% Mkombozi 4% Mufindi 51% 54% 52% 71% Mwanga 59% 67% 62% 49% TCB 73% 10% TWB 6% Uchumi 58% 55% 59% 60% Total Sector 46% 50% 41% 42%

Large 45% 50% 41% 42% Medium 50% 49% 43% 43% NBFIs 46% 54% 34% 34% Regional & Small 50% 60% 60% 62% Total Sector 46% 50% 41% 42%


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Appendix Table 6: Non Interest Expenses to Interest Income


Non Interest Expense to Interest Income




36

Appendix Table 7: ROAA

Earnings & Profitability Ratios ROAA

2009 2008 2007 2006 Barclays -0.9% 0.0% 2.6% 0.8% Citibank 5.7% 4.6% 4.1% 3.9% CRDB 2.8% 3.1% 3.7% 2.9% Exim 2.7% 2.5% 2.7% 3.0% NBC 3.4% 3.8% 3.7% 3.3% NMB 3.1% 3.8% 4.0% 4.4% Stan Chart 2.5% 2.4% 5.4% 1.3% Stanbic 2.4% 2.1% 1.9% -1.9% Access -3.7% -10.3% -2.4% Akiba CB 2.0% 1.5% 1.9% 0.7% Azania 0.5% 0.8% 1.3% -0.9% BancABC 0.8% 1.5% 1.8% 0.0% Bank M 0.6% -2.1% -9.8% BOA 0.7% 1.0% 1.2% 1.0% BOB 2.3% 2.8% 1.6% 2.8% BOI 1.1% 3.1% CBA 1.0% 1.3% 2.4% -4.7% CF Union 3.4% 4.3% 4.2% 3.5% DTrust 2.1% 2.1% 3.6% 3.0% Habib 2.5% 2.8% 3.1% 2.8% ICB 0.4% 1.3% 1.9% 1.9% KCB -1.4% 0.4% 0.0% -1.0% PBZ 1.9% 4.5% 6.6% 2.1% S&F -0.8% 2.5% 2.5% 2.1% UBA -12.2% TIB 1.5% 2.4% 2.5% 2.5% TPB 0.4% 0.4% 0.3% 1.3% Twiga 0.5% 0.7% 0.9% 3.1% DCB 3.1% 3.4% 4.2% 2.0% Kagera 1.7% 2.2% 1.0% 5.0% Kili Coop -6.4% -8.5% -2.6% 1.0% Mbinga -1.8% 0.2% 2.5% -3.4% Mkombozi -10.8% Mufindi 2.6% 3.2% 2.0% 3.9% Mwanga 2.2% 2.1% 3.7% 2.2% TCB -25.6% -12.1% TWB -16.5% Uchumi 2.1% 3.4% 3.8% -4.7% Total Sector 2.4% 2.8% 3.4% 2.5%

Large 2.8% 3.0% 3.7% 2.7% Medium 0.9% 1.7% 2.3% 1.2% NBFIs 1.0% 1.5% 1.5% 2.1% Regional & Small 1.0% 2.2% 3.1% 1.5% Total Sector 2.4% 2.8% 3.4% 2.5%


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Appendix Table 8: ROAE

Earnings & Profitability Ratios ROAE

2009 2008 2007 2006 Barclays -8% 0% 26% 10% Citibank 25% 26% 36% 46% CRDB 26% 33% 43% 38% Exim 22% 23% 33% 37% NBC 27% 32% 34% 32% NMB 27% 35% 36% 38% Stan Chart 26% 22% 53% 19% Stanbic 22% 22% 21% -19% Access -9% -13% -2% Akiba CB 11% 8% 13% 6% Azania 6% 8% 11% -6% BancABC 6% 13% 14% 0% Bank M 7% -18% -62% BOA 8% 11% 15% 11% BOB 11% 14% 7% 10% BOI 3% 6% CBA 12% 14% 18% -29% CF Union 26% 33% 30% 24% DTrust 17% 15% 25% 25% Habib 24% 26% 30% 27% ICB 3% 8% 15% 20% KCB -13% 3% 0% -4% PBZ 16% 45% 122% 98% S&F -5% 19% 18% 15% UBA -16% TIB 5% 9% 10% 8% TPB 6% 5% 4% 16% Twiga 4% 6% 7% 19% DCB 15% 17% 29% 16% Kagera 12% 18% 9% 41% Kili Coop -112% -85% -15% 5% Mbinga -12% 2% 17% -22% Mkombozi -15% Mufindi 17% 22% 15% 29% Mwanga 17% 17% 29% 18% TCB -67% -13% TWB -36% Uchumi 12% 23% 37% -47% Total Sector 20% 24% 32% 25%



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Appendix Table 9: Interest Margin to Average Earning Assets


Interest Margin to Average Earning Assets




39

Appendix Table 10: Non Interest Expenses to Gross Income


Non Interest Expense to Gross Income




40

Appendix Table 11: Gross Loans to Deposits

Earnings & Profitability Ratios Gross Loans to Deposits




41

Appendix Table 12: Interest Income to Total income

Earnings & Profitability Ratios Interest Income to Total Income




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Appendix Table 13: Interest Margin

Earnings & Profitability Ratios Interest Margin




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Appendix Table 14: Earning Assets to Total Assets

Earnings & Profitability Ratios Earning Assets to Total Assets




44

Appendix Table 15: Net Interest Margin

Earnings & Profitability Ratios Net Interest Margin




45

Appendix Table 16: Total Expenses to Interest Income

Earnings & Profitability Ratios Total Expenses to Interest Income




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Appendix Table 17: Interest Margin to Gross Income


Interest Margin to Gross Income




47

Appendix Table 18: Operating Efficiency

Efficiency Ratios Operating Efficiency




48

Appendix Table 19: Average Loan Portfolio

Efficiency Ratios Average Loan Portfolio (TZS in Millions)

2009 2008 2007 2006 Barclays 263,081 257,533 206,704 192,238 Citibank 135,695 120,654 80,354 66,053 CRDB 893,154 712,575 497,060 405,772 Exim 225,916 181,719 142,646 123,095 NBC 670,525 563,928 410,711 358,117 NMB 621,579 457,894 241,334 137,457 Stan Chart 393,377 385,358 383,978 434,304 Stanbic 200,203 160,079 139,467 150,298 Access 7,670 1,725 134 0 Akiba CB 38,466 28,828 21,977 18,672 Azania 93,097 65,057 43,143 36,606 BancABC 98,319 68,087 29,123 20,814 Bank M 57,434 27,097 8,020 0 BOA 56,141 32,641 20,789 17,475 BOB 27,503 19,264 19,886 22,355 BOI 8,727 1,934 0 0 CBA 49,927 29,895 14,503 8,118 CF Union 38,967 27,847 17,493 14,064 DTrust 106,492 77,587 52,384 42,442 Habib 25,555 18,969 14,852 14,291 ICB 12,595 12,293 11,125 10,580 KCB 71,368 46,996 25,874 17,264 PBZ 28,116 19,713 14,211 13,820 S&F 26,192 25,447 21,754 20,723 UBA 52 0 0 0 TIB 76,677 56,019 34,213 27,968 TPB 41,911 41,022 29,830 23,260 Twiga 26,803 17,422 9,713 8,744 DCB 34,906 24,944 19,806 18,368 Kagera 3,425 2,864 1,961 1,727 Kili Coop 2,662 3,017 3,070 3,057 Mbinga 1,134 1,104 768 483 Mkombozi 189 0 0 0 Mufindi 2,394 2,223 2,293 2,461 Mwanga 3,740 3,164 2,080 1,519 TCB 233 12 0 0 TWB 145 0 0 0 Uchumi 4,210 3,121 2,439 2,199 Total Sector 4,348,576 3,498,025 2,523,687 2,214,343

Large 3,403,529 2,839,738 2,102,252 1,867,334 Medium 746,619 503,377 315,264 257,224 NBFIs 145,390 114,463 73,756 59,972 Regional & Small 53,039 40,448 32,415 29,814 Total Sector 4,348,576 3,498,025 2,523,687 2,214,343


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Appendix Table 20: Loan Portfolio per Staff

Efficiency Ratios Loan Portfolio per Staff

2009 2008 2007 2006 Barclays 415 340 365 1,194 Citibank 2,467 2,011 1,339 1,016 CRDB 681 571 431 407 Exim 599 561 553 603 NBC 483 420 360 418 NMB 251 227 129 79 Stan Chart 1,174 886 960 1,467 Stanbic 610 523 463 557 Access 47 12 3 Akiba CB 127 113 95 82 Azania 586 422 431 508 BancABC 1,294 1,792 766 743 Bank M 552 339 187 BOA 349 255 231 250 BOB 809 713 765 1,242 BOI 545 129 CBA 675 490 290 193 CF Union 684 546 372 313 DTrust 602 514 369 376 Habib 323 243 201 198 ICB 143 162 155 235 KCB 304 237 190 173 PBZ 223 171 167 192 S&F 354 344 302 UBA 2 TIB 710 555 412 345 TPB 102 96 73 59 Twiga 268 169 102 109 DCB 306 245 275 301 Kagera 171 136 163 Kili Coop 92 108 106 Mbinga 34 46 35 24 Mkombozi 8 Mufindi 92 93 115 Mwanga 144 127 109 101 TCB 26 1 TWB 9 Uchumi 191 164 163 157 Total Sector 444 388 325 359

Large 493 437 366 406 Medium 382 307 252 285 NBFIs 236 181 125 108 Regional & Small 166 160 172 271 Total Sector 444 388 325 359

Note: Staff numbers for some of the earlier years were not available


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Appendix Table 21: Earnings Per Staff

Efficiency Ratios Earnings per Staff

2009 2008 2007 2006 Barclays -6 0 26 25 Citibank 579 403 473 435 CRDB 47 48 45 39 Exim 47 46 47 55 NBC 42 41 41 42 NMB 27 35 31 27 Stan Chart 84 59 117 39 Stanbic 49 46 37 -29 Access -5 -8 -3 Akiba CB 1 8 5 3 Azania 6 7 14 7 BancABC 25 76 10 0 Bank M 7 -16 -19 BOA 9 12 16 16 BOB 60 87 39 100 BOI 26 1 CBA 34 23 4 -26 CF Union 61 64 47 31 DTrust 30 27 33 28 Habib 34 32 29 23 ICB 2 12 12 20 KCB -10 3 0 -6 PBZ 17 34 57 21 S&F -9 25 20 UBA -60 TIB 30 46 46 33 TPB 1 2 1 4 Twiga 2 3 5 18 DCB 22 23 32 14 Kagera 4 6 4 Kili Coop -12 -16 -5 Mbinga -1 0 2 -3 Mkombozi -26 Mufindi 7 8 5 Mwanga 8 7 10 7 TCB -12 -1 TWB -27 Uchumi 11 14 10 -12 Total Sector 31 33 38 30

Large 40 41 47 37 Medium 9 16 17 13 NBFIs 6 9 8 10 Regional & Small 5 10 14 10 Total Sector 31 33 38 30


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Appendix Table 22: Staff Income to Staff Portfolio

Efficiency Ratios Staff Income to Staff Portfolio

2009 2008 2007 2006 Barclays -1% 0% 7% 2% Citibank 23% 20% 35% 43% CRDB 7% 8% 10% 9% Exim 8% 8% 9% 9% NBC 9% 10% 11% 10% NMB 11% 15% 24% 34% Stan Chart 7% 7% 12% 3% Stanbic 8% 9% 8% -5% Access -11% -64% -79% Akiba CB 1% 7% 6% 3% Azania 1% 2% 3% 1% BancABC 2% 4% 1% 0% Bank M 1% -5% -10% BOA 2% 5% 7% 6% BOB 7% 12% 5% 8% BOI 5% 1% CBA 5% 5% 1% -13% CF Union 9% 12% 13% 10% DTrust 5% 5% 9% 8% Habib 10% 13% 14% 11% ICB 1% 7% 8% 8% KCB -3% 1% 0% -4% PBZ 8% 20% 34% 11% S&F -3% 7% 7% 5% UBA -3729% TIB 4% 8% 11% 10% TPB 1% 2% 1% 7% Twiga 1% 2% 5% 17% DCB 7% 9% 12% 5% Kagera 2% 4% 3% 8% Kili Coop -13% -15% -4% 2% Mbinga -4% 0% 6% -12% Mkombozi -340% Mufindi 7% 8% 5% 8% Mwanga 5% 5% 9% 7% TCB -46% -122% TWB -294% Uchumi 6% 9% 6% -8% Total Sector 7% 9% 12% 8%



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Appendix Table 23: Portfolio Yield

Efficiency Ratios Portfolio Yield




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Appendix Table 24: Gross Yield on Earning Assets

Efficiency Ratios Gross Yield on Earning Assets




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Appendix Table 25: Rates Paid on Funds

Efficiency Ratios Rates Paid on Funds

2009 2008 2007 2006 Barclays 3.9% 3.2% 3.8% 4.4% Citibank 1.7% 4.9% 4.8% 2.2% CRDB 2.2% 1.7% 1.7% 1.7% Exim 4.6% 4.4% 5.2% 4.8% NBC 1.7% 1.0% 1.1% 0.8% NMB 0.9% 1.0% 0.9% 1.0% Stan Chart 2.8% 2.3% 4.9% 3.3% Stanbic 1.2% 1.2% 4.0% 2.9% Access 3.9% 1.4% 0.0% Akiba CB 2.3% 2.2% 2.2% 2.4% Azania 7.5% 7.6% 7.2% 8.6% BancABC 5.7% 4.9% 7.8% 7.3% Bank M 5.8% 4.1% 1.2% BOA 3.7% 3.5% 4.9% 3.8% BOB 3.0% 2.4% 2.1% 1.2% BOI 3.6% 1.6% CBA 4.0% 3.9% 4.1% 4.5% CF Union 3.6% 3.2% 3.4% 3.2% DTrust 3.0% 2.9% 3.5% 2.8% Habib 2.2% 1.9% 2.1% 2.2% ICB 3.8% 3.9% 4.0% 4.0% KCB 4.0% 3.8% 4.6% 3.2% PBZ 1.5% 1.8% 1.3% 1.1% S&F 5.5% 5.6% 4.2% 3.4% UBA 0.8% TIB 4.8% 6.2% 5.7% 5.7% TPB 1.7% 1.7% 1.3% 1.4% Twiga 4.5% 2.5% 1.9% 2.1% DCB 6.7% 6.6% 7.2% 7.8% Kagera 2.9% 3.1% 4.1% 3.2% Kili Coop 2.1% 2.2% 2.2% 2.2% Mbinga 5.0% 3.7% 2.9% 2.2% Mkombozi 0.3% Mufindi 3.5% 3.5% 3.8% 2.4% Mwanga 6.2% 5.1% 6.2% 3.6% TCB 3.0% 0.0% TWB 1.0% Uchumi 2.1% 2.1% 1.7% 0.7% Total Sector 2.5% 2.3% 2.8% 2.4%

Large 2.1% 1.9% 2.6% 2.2% Medium 4.1% 3.7% 4.0% 3.5% NBFIs 3.6% 3.8% 3.5% 3.1% Regional & Small 5.4% 5.3% 5.7% 5.6% Total Sector 2.5% 2.3% 2.8% 2.4%


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Appendix Table 26: Portfolio Yield to Operating Efficiency

Efficiency Ratios Portfolio Yield to Operating Efficiency

2009 2008 2007 2006 Barclays -1% -3% 0% 1% Citibank 1% 3% 9% 5% CRDB 2% 2% 2% 2% Exim 1% 1% 2% 3% NBC 3% 2% 4% 3% NMB 5% 7% 7% 11% Stan Chart 0% -1% 3% 1% Stanbic -1% 1% -1% -1% Access -7% -26% -2% Akiba CB -2% 2% 0% 0% Azania 0% -1% 0% -1% BancABC 0% -1% -3% -4% Bank M -4% -7% -6% BOA -3% -2% -1% -1% BOB 1% 3% 3% 3% BOI 0% -1% CBA -2% -2% -3% -6% CF Union 3% 4% 4% 3% DTrust 1% 0% 1% 1% Habib 1% 0% 1% 1% ICB -5% 0% 0% 0% KCB -5% -5% -6% -5% PBZ 1% 1% 4% -1% S&F -2% 0% 1% 1% UBA -104% TIB 6% 5% 4% 8% TPB -12% -9% -11% -13% Twiga -10% -9% -6% -6% DCB 3% 8% 7% 3% Kagera -1% -3% -4% 0% Kili Coop 0% -13% -5% 1% Mbinga -10% 2% -3% 3% Mkombozi -10% Mufindi 3% -2% -3% 2% Mwanga 3% 2% 3% 3% TCB -28% -12% 3% TWB -9% Uchumi 3% 6% 4% -8% Total Sector 1.2% 1.4% 2.5% 2.3%

Large 1.9% 2.0% 3.2% 3.0% Medium -1.3% -0.8% -0.3% -0.7% NBFIs -1.0% -2.0% -3.7% -2.8% Regional & Small 0.9% 4.2% 3.8% 1.8% Total Sector 1.2% 1.4% 2.5% 2.3%


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Appendix Table 27: Yield to Rate on Funds

Efficiency Ratios Yield to Rate on Funds




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Appendix Table 28: Government Securities as % of Earning Assets

Efficiency Ratios Govt Securities as % Earning Assets




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Appendix Table 29: Capital Adequacy

Financial Soundness Ratios

Capital Adequacy




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Appendix Table 30: Non- Performing Loans to Gross Loans & Advances


Non-Performing Loans to Gross Loans & Advances




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Appendix Table 31: Total Capital to RWAs


Total Capital to RWAs




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Appendix Table 32: Core Capital to RWAs


Core Capital to RWAs

2009 2008 2007 2006 Barclays 16% 17% 12% 13% Citibank 18% 22% 19% 17% CRDB 18% 15% 15% 11% Exim 15% 17% 11% 16% NBC 19% 18% 19% 19% NMB 25% 25% 29% 55% Stan Chart 12% 8% 17% 6% Stanbic 19% 14% 11% 10% Access 48% 157% 461% Akiba CB 25% 32% 16% 18% Azania 11% 10% 15% 18% BancABC 17% 18% 18% 35% Bank M 9% 18% 22% BOA 15% 18% 20% 16% BOB 38% 50% 38% 36% BOI 71% 129% CBA 18% 16% 25% 38% CF Union 22% 21% 22% 24% DTrust 17% 18% 22% 17% Habib 23% 10% 19% 18% ICB 31% 35% 37% 21% KCB 12% 18% 23% 32% PBZ 31% 36% 0% 0% S&F 44% 23% 19% 22% UBA 2797% TIB 58% 32% 64% 34% TPB 17% 11% 16% 23% Twiga 15% 15% 18% 30% DCB 25% 35% 24% 13% Kagera 15% 14% 16% 17% Kili Coop -11% -3% 7% 21% Mbinga 15% 18% 19% 33% Mkombozi 336% Mufindi 29% 23% 5% 12% Mwanga 14% 15% 17% 19% TCB 48% 486% TWB 204% Uchumi 29% 30% 18% 16% Total Sector 20% 17% 18% 16%



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Appendix Table 33: Liquid Assets to Total Assets


Liquid Assets to Total Assets




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Appendix Table 34: Liquid Assets to Deposit Liabilities


Liquid Assets to Deposit Liabilities




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Appendix Table 35: Capital to Deposit Liabilities


Total Capital to Deposit Liabilities




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APPENDIX A : RATIO CALCULATIONS

EFFICIENCY RATIOS

1. Operational Efficiency (%): Non Interest Expense + Interest Expense/Loans &

Advances (including inter-bank) + Probable Losses. To determine how efficient the bank has been in making its loans i.e. keeping its costs down. The lower the % the more efficient the bank.

2. Average Loan Portfolio: The loans and advances for the current and preceding period

divided by 2. To show the increase/decrease in loan portfolio over the period under review.

3. Loan Portfolio per Staff: Loans & Advances + Probable Losses/by number of staff. To

show theoretical staff productivity in terms of amount of loans per staff. 4. Income to Staff: Profit before tax/number of staff. To show, again theoretically, how

much each staff has contributed to the bank’s earnings. 5. Staff Income to Staff Portfolio (%): The result of earnings to staff (4, above) as a %

of result of portfolio to staff (3). To show how much each staff has contributed on average to the bank’s earnings. In theory this suggests that a bank with a higher ratio has more productive staff.

6. Portfolio Yield (%): Interest Income/Loans & Advances. To tell us what the portfolio

actually earned. Ideally this should be at least equal to (and preferably better than) the bank’s annual interest rate. A yield lower than the interest rate means there are one or a number of inefficiencies. (Note: the interest income figure may also include interest earned from non-lending sources).

7. Gross Yield on Earning Assets (%): Interest Income /Earning Assets: Shows the gross

interest income earned from all earning assets. This % can be compared to other investments such as Treasury Bills.

8. Rates Paid on Funds (%): Interest expense/Customer Deposits. Basically this gives the

average deposit interest rate paid by the bank on customer deposits (Note: the interest expense may include interest on other borrowed funds).

9. Portfolio Yield to Operating Efficiency (%): The result of the Portfolio Yield (6) minus

the result of the Operating efficiency (1). The yield is compared to the costs incurred (operating efficiency %) to generate that yield. The yield % should obviously be higher than the Operating efficiency %.

10. Government Securities to Earning Assets (%): Shows to what extent Earning Assets

are made up of Government Securities (as opposed, for example, to loans and advances).

11. Loans & Advances to Total Assets (%): Loans & Advances as a % of total assets.


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PROFITABILITY & EARNINGS RATIOS

1. Return on Total Assets (%): Using profit after tax, to show the returns generated by

the bank’s assets. 2. Return on Total Equity (%): Using Shareholders’ funds, to show the return to

Shareholders from the bank’s operations. 3. Interest Margin to Earning Assets (%): Shows the net interest income earned on the

bank’s earning assets. 4. Non-Interest Expense to Interest Income (%): To show how much non-interest

expense would ‘eat’ into interest income especially if interest income was the bank’s only income source. In other words, is the bank earning enough from its main source of income to cover other major (non-interest) expenses.

5. Non-Interest Expense to Total income (%): To show the extent to which non-interest

expense would ‘eat’ into total income. 6. Gross Loans to Deposits (%): Loans and Advances + Probable Losses/Customer

deposits. 7. Interest Income to Total income (%): To show the extent to which interest income is

the bank’s major source of income (as it should be). 8. Interest Margin (%): Interest Income-Interest Expense/Interest Income. This shows the

bank’s net interest income. The higher the interest margin % the more efficient is the bank’s interest policy.

9. Earning Assets to Total Assets (%): To show the composition of the bank’s assets and

if most of them are earning assets and how efficiently and productively the bank uses those earning assets.

10. Interest Margin to Loans & Advances (%): This is also known as Net Interest Margin

and is Interest Income- Interest Expense/Loans & Advances. This shows net interest earned by the bank on its loans & advances.

11. Total Expenses to Interest Income (%): To show the extent to which the bank’s

interest income covers total expenses if, hypothetically, assuming that interest income was the bank’s only source of income.

12. Interest Margin to Gross Income (%): Interest Margin/Interest and Non-interest

income. To demonstrate how much of the bank’s net interest earnings made up total earnings.

FINANCIAL SOUNDNESS RATIOS

1. Non-Performing Loans Ratio (%): Non-performing loans/loans & advances + probable

losses. Tells how well the bank is managing its loan portfolio. The lower the % the better managed the portfolio.


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2. Capital to Risk Weighted Assets plus Off Balance Sheet Exposures (%): Shows the

degree to which creditors are covered first, by Total capital and then by Core Capital only.

3. Liquid Assets to Total Assets (%): To show the extent of the bank’s liquidity. To be

compared to the BOT minimum. 4. Liquid Assets to Deposit Liabilities (%): To show how much liquid assets the bank has

to cover Customer deposits e.g. in the event of a ‘run on the bank’. 5. Total Capital to Deposit Liabilities (%): Shows how much cover there is from total

capital on all the bank’s Deposit liabilities.

Please note the following:

• Core Capital = Paid up share capital + share premium + preference shares + retained earnings + profit and loss account

• Total Capital = Total shareholder’s funds • Off Balance Sheet Exposures = Contingent liabilities • RWAs – Risk Weighted Assets is a 'minimum' amount of capital that banks should

hold. This minimum capital is a percentage of the total capital of a bank, which is also called the minimum risk-based capital adequacy. Indeed, RWAs calculated as: cash * 0% + (Balances with other banks + Interbank loans and receivables * 20%) + (investment in Government securities + investment in debt securities * 0%) + loans, advances and overdrafts * 100%

• Liquid assets - An asset is said to be liquid if it can be sold quickly without significant losses and has low risk with short maturity period (less price sensitive to interest rate movements with unlikely capital losses). Typical examples of bank assets are cash, reserves, securities (Government debt and commercial paper) and inter-bank loans. The calculation for liquid assets: Cash + Balances with Bank of Tanzania + Balances with other banks + Inter-bank loans and receivables + Cheques and items for clearing + Investment in Government securities + Investment in debt securities

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