Financial Crime World

Tanzanian Banking Sector Reports Strong Financial Performance in 2022

Overview

The Tanzanian banking sector has reported a strong financial performance in the calendar year 2022, with total assets standing at TZS 46.0 trillion, up from TZS 39.2 trillion in 2021.

Funding Sources

According to the latest data released by the Bank of Tanzania (BOT), customer deposits remained the main source of funding for the sector, accounting for 66.7% of total funding sources. This was followed by:

  • Shareholders’ funds: 15.1%
  • Other liabilities: 13.0%

Financial Performance

The banking sector’s financial performance is reflected in its net income after tax, which stood at TZS 875 billion in 2022, up from TZS 676 billion in 2021.

  • Net interest income increased significantly, rising to TZS 2,792 billion from TZS 2,129 billion in the previous year.
  • Bad debt provisions and write-offs declined by 14.4% to TZS 400 billion in 2022, compared to TZS 468 million in the previous year.
  • The sector’s gross income also increased to TZS 3,755 billion in 2022, up from TZS 2,702 billion in 2021.

Breakdown of Assets and Liabilities

According to the BOT’s data, the breakdown of assets and liabilities is as follows:

Assets

  • Loans, advances, and overdrafts: 56.7%
  • Investment in government securities: 17.6%
  • Cash, and balances with the Bank of Tanzania: 11.0%
  • Other assets: 14.7%

Liabilities

  • Customer deposits: 78.5% (down from 83.4% in 2021)
  • Other liabilities: 13.0% (up by 43.9%)
  • Deposits with other banks: 6.1% (up from 3.4% in the previous year)

Sector’s Profitability

The banking sector’s profit before tax stood at TZS 1,457 billion in 2022, up from TZS 664 billion in 2021.

  • Income tax provision declined by 13.8% to TZS 581 billion in 2022, compared to TZS 678 billion in the previous year.
  • The sector’s net income after tax stood at TZS 875 billion in 2022, up from TZS 676 billion in 2021.

Overall, the Tanzanian banking sector reported a strong financial performance in 2022, driven by increased customer deposits and improved profitability.