NMB | NMB Bank - Financial Update - January 2023

    The bank (DSE:NMB) has reported an impressive 46% growth in earnings per share from TZS 584/- in 2021 to TZS 858/- in 2022. At the same rate net profit after tax increased from TZS 292.1 billion in 2021 to TZS 428.9 billion in 2022. Interest income reached TZS 953.7 billion 16.9% increase from that of 2021, primarily a result of ballooning earning assets which grew by 22% year on year to hit TZS 8.2 trillion in 2022. The loan portfolio led the growing streak, gaining 29% to TZS 6.02 trillion, while investment in government securities went by 11.6% to TZS 1.94 trillion.

    Although slower than income, overall costs have been increasing over time. In the previous five years, operating expenses have grown by 5.21% CAGR from TZS 405.1 billion in 2018 to TZS 496.4 billion in 2022, the increase was attributed to an increase in employees benefit expenses by 60.5% from TZS 166.1 billion in 2018 to TZS 266.6 billion in 2022. The cost-to-income ratio has been decreasing since 2016. This indicates that the bank is taking various steps to improve operational efficiency.

    Deposits have grown at 11.3% CAGR over the last five years hitting TZS 7.36 trillion in 2022, in the FY 2022 the bank recorded a deposit growth of 13% compared to 25% growth in 2021, it should be remembered that during the year 2022, the bank surpassed the target of opening one million new customer accounts and could be one of the reasons for a 13% increase in Deposits from customers.

    Nonetheless, a slower growth of deposits compared to the loan portfolio is a prerequisite for higher interest expenses, considering the loan to deposit ratio already grew to 83% in 2022 compared to 69% in 2021. The bank remained adequately capitalized with the core and total capital ratios to total risk-weighted assets and off-balance sheet exposures were above the statutory minimums of 14% and 12%, respectively.


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