The banking sub-sector in Tanzania remained sound and stable in terms of capital adequacy, liquidity, asset quality and profitability despite the slowdown of global economic conditions last year according to the Financial Sector Supervision Annual Report 2021 released by the Bank of Tanzania (BoT).
The 25th edition of the Central Bank annual report, shows that banks’ total assets increased by 13.4 per cent to 39.3bn/- last year, mainly financed by an increase in deposits, borrowings and retained earnings.
Deposits increased by 15.1 per cent to 28.4bn/- mainly attributed to deposit mobilization strategies by banks.
“Total deposits accounted for 86.0 per cent of total liabilities. In addition, borrowings and retained earnings increased by 8.0 per cent and 12.2 per cent to 3.007bn/- and 2.059bn/-respectively,” the report said.
Loans, advances and overdrafts on the other hand increased by 11.0 per cent to 20.8bn/- and accounted for 52.9 percent of total assets.
“The observed growth was attributed to favourable macroeconomic environment, the Bank’s sustained accommodative monetary policy and regulatory measures taken to support private sector’s credit growth,” the report added.
The report said the sector’s outreach continued to expand through branch network, agent banking, digital and other delivery channels with the number of branches increasing to 990 from 969, while the number of agents and number of deposit transactions increased by 21.1 per cent to 48,923 and 44.9 per cent to 50,942,662, respectively.
“Deposits through agents increased by 56.1 percent to 36.17bn/-. The growth implies that this service delivery channel has become a more effective means of mobilizing savings and increasing access to and usage of banking services,” the report added.
According to the BoT Governor Prof Florens Luoga, Central Bank Last year implemented measures to cushion the banking sector from the negative effects associated with the COVID-19 pandemic.
He said the measures enabled the sector to maintain adequate capital and sufficient liquidity levels to meet maturing obligations and fund assets growth.
“Assessment of the financial system stability indicated that, the financial sector was resilient to internal and external shocks with capital and liquidity levels remaining above minimum regulatory requirements. The Bank continued to monitor risks from the financial sector and put in place appropriate mitigation measures to sustain the stability of the sector,” he said.
He noted that Bank will continue to monitor risks posed by domestic and global economic shocks and strengthen regulatory and supervisory interventions to ensure the sector remains sound, stable and supportive to macroeconomic and financial stability.