NMB Financial Update - January 2023

NMB Bank Plc maintained the position of the most profitable bank in Tanzania after recording a profit growth of 46%. The growth originates from a significant growth of the bank's loan portfolio while the quality of loans improved with a slight drop in the NPL ratio. The loan portfolio growth is at large funded by deposits, despite a falling net interest margin as deposits become expensive due to faster growth in the demand of credit. Non-interest income is also increasingly becoming a major part of the bank's income as commercial banks create lifestyle ecosystems for clients to preempt the possible fall of interest income as the central bank implements long term accommodative monetary measures that shall most likely lower lending rates. The bank was prudent on operational expenses leading to an improved cost to income ratio and rising profit margins. 

The price is already reacting to the results, posting an 11.6% price appreciation within the week of the results. The projected dividend yields is about 8.2% on the current price of the bank. Dividend payment is expected in June, from the bank's historical annual financial calendar. With dividend payment in June, the dividend yield translates to 19.6% annualized return, before any capital gains.