Barclays Tanzania could be justifiably satisfied with it performance in 2005 – net profits ballooned 86% to TSh4.8bn ($4.1m). With Tier 1 capital rising 16% to TSh23bn, the bank was able to report a substantial improvement in its RoE to 21%, from 13% the year before.
Last year’s performance comes on the heels of strong performance in 2004, when net profits grew 36%, underlying the health of the bank and reflecting the strong performance of the local economy. Tanzania’s GDP growth averaged more than 6.7% in the past two years and is projected to grow by 5.9% this year, according to the IMF.
As a result, Barclays had a strong increase in its balance sheet, with assets growing 28% in 2005. Though its cost/income ratio edged upwards, diligent attention to loan quality resulted in the NPL ratio improving markedly. “Adherence to strict lending practices ensures that loans and overdrafts created are of high standards, providing a proactive mechanism to managing delinquency levels,” says financial director Waziri Barnabas.
Barclays is keeping close tabs on its costs. “We are applying even stricter management of expenses to improve profit margins and increase shareholder returns,” says Mr Barnabas.
