Tanzania: Is Tanzania's Banking Sector Caving In?
The banking sector in Tanzania currently comprises 41 banks that had a combined portfolio worth Tsh.22.5 trillion ($9.7 billion) as of 2014 which was a 15.11 per cent increase from Tsh.19.15 trillion ($8.4 billion) in 2013.
Major components of the banking sector assets include loans advances, overdrafts, cash, balance with other banks, items for clearing and investment in debt securities. In 2014 the total capital in the banking sector increased by 17.10 per cent to Tsh. 3 trillion ($1.3 billion) in 2014 from Tsh. 2.5 trillion ($ 1 billion) in 2013.
This boom was attributed to the entry of new banking institutions, retention of profits and additional capital injection. The rosy climate however took a U-turn in 2016 when the sectors net profit dropped heavily from Tsh. 438 billion ($190 million) that had been realized in 2015 to Tsh. 423 billion ($183 million) and Tsh. 286 billion ($124 million) in 2017.
By June 2018, 40 banks had jointly shed a total of 381 jobs off their payrolls to remain with a total of 12,156 employees citing the need to align their operations with the new economic realities and cope with declining profit margins. Some of the banks that adopted the retrenchment policy are Exim Bank, Access Bank, Akiba Commercial Bank (ACB), Commercial Bank of Africa (cba) and CRDB Bank Plc.
Access Bank laid off a total of 142 employees remaining with 634 employees making it top the list with the highest retrenchment numbers. Read more from All Africa.
Source: All Africa