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NMB Integrated Annual Report 2023
NMB Integrated Annual Report 2023
Annual Report
For the year ended 31 December 2023
TOUCHING LIVES
EMPOWERING COMMUNITIES
TOUCHING LIVES
EMPOWERING COMMUNITIES
About this Report
The report provides a detailed account of our business operations, strategic approach, and financial and
non-financial performance throughout the year. Additionally, we shed light on corporate governance, risk
management, and the overall context in which we operate.
The report, covering the period from 1 January 2023 to 31 December 2023, highlights our progress in
alignment with our key objectives and emphasizes our unwavering commitment to positively impacting
crucial areas central to our bank’s focus.
Our goal is to transparently communicate our efforts and accomplishments, as well as our ongoing
dedication to responsible banking practices. We aim to ensure that stakeholders have a comprehensive
understanding of our journey towards creating sustainable value.
Reporting Boundary
NMB Bank Plc’s comprehensive reporting encompasses financial and non-financial information detailing the
bank’s core banking activities, performance metrics, and strategic narrative aligned with the bank’s robust
business model.
Reporting Framework
The Financial information in this report has been prepared as per the International Financial Reporting
Standards (IFRS). Our reporting procedures are guided by the current guidelines and regulations set forth by
various governing bodies, such as the Bank of Tanzania’s (BOT) prudential guidelines, the National Board
of Accountants and Auditors (NBAA), the Capital Market and Securities Authority (CMSA), and the Dar es
Salaam Stock Exchange (DSE) rules. To ensure the quality of our content, we have incorporated principles
from the Integrated Reporting Framework. We are dedicated to continuously improving our reporting process
to align with the latest guidelines and international best practices, with the ultimate aim of achieving full
adherence to Integrated Reporting Framework.
Combined Assurance
Both management, internal audit, and external audit conducted comprehensive reviews to guarantee
accuracy in reporting and disclosures. The Board and Board Committees played their respective roles in
overseeing this process. The report includes specific details extracted from the consolidated annual financial
statements audited by Deloitte & Touche.
Reporting Period
The annual Report covers the period from 1 January 2023 to 31 December 2023 and is published annually.
Any material events occurring after this timeframe and up to the report’s approval by the Board of Directors
of NMB Bank have been duly considered and communicated.
Director’s Responsibilities
The Board prepared and presented the information in the report and acknowledges its responsibility for
ensuring its integrity. The report provides relevant stakeholders with material information. The Board
approved this Annual Report on 24 May 2024.
Table of Contents
BARCC Board Audit, Risk and Compliance FVTPL Fair Value through Profit or Loss
Committee
FYDP Five Year Development Plan
BIA Basic Indicator Approach
GCRI Global Climate Risk Index
Bn Billion
GDPR General Data Protection Regulation
BOT Bank of Tanzania
GDP Gross Domestic Product
CASA Current and Savings Accounts
GePG Government Electronic Payment
CCPs Cash Collection Points Gateway
NHIF National Health Insurance Fund UJVC Upanga Joint Venture Company
QR Quick Response
Overview
1.4
Record
Profit After Tax
TZS Trillion
545
TZS Billion
7+ Non Funded
Million
Income
39%
TZS Billion
2023 12.2
2022 10.3
2021 8.7
33.30% 34.90%
500 Mn
Shares
31.80%
84%
Net Promoter Score (NPS)
59 59 59
Customers onboarded
digitally in 2023
2021 2022 2023
Organisational strength
80% 48% 4x 1 3x
Employee Engagement Female Best Bank Best Digital Bank Best Retail Bank
Score employees Awards Award Awards
Best-practice to Sustainability
TZS 400 Bn
• Support the transition to a net zero economy
and manage climate change risks.
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
CAGR: +15%
CAGR: +21%
7.6 8.5 7.7
6.7 6.0
5.3
4.9 3.6 4.1 4.7
Deposits Loans
181
143
69 97
48
1,090
584 863
420
289
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
1
Client-focused: At NMB, our core values are
embedded in understanding and catering to our
clients’ needs. Our distinct value proposition is
delivering personalised financial solutions aligning
with their goals and aspirations. Through continuous
engagement and feedback, we ensure our services
evolve in tandem with our clients’ requirements.
4
2 A socially responsible business: Our ethos
embraces social responsibility. We are committed
Distinct Value Proposition: Our deep-rooted to making a positive impact in the communities
local presence, unique understanding of our we serve. Our initiatives encompass sustainable
client’s needs, world-class technology, and digital practices, community development programs, and
innovations allow us to offer tailored propositions. ethical investment strategies to create a better future
for all stakeholders.
3
Focus on Operational Efficiency and Prudent
5
Cost Management: We pride ourselves on A highly performing and engaged workforce:
managing costs judiciously while maintaining Our success stems from our people. We cultivate
an unwavering focus on operational efficiency. a culture of performance excellence, fostering an
This approach allows us to optimise resources, engaged and motivated workforce. By investing
enhance service quality, and provide our clients in their growth, development, and well-being, we
with competitive services without compromising ensure that our team delivers the highest standards
on excellence. of service and innovation.
6
Robust risk management: Mitigating risks is at
the heart of our operations. We employ robust risk
management frameworks, leveraging cutting-edge
technology and comprehensive strategies, which
safeguards our clients’ interests and the bank’s long-
term stability.
12.2
TZS Trillion
ROE
29%
ROA
5%
About NMB
Ways of Banking
28,295
Create long-term Customer Experience. channels.
Agent outlets
Our values
• Integrity
Mobile Banking (NMB Mkononi):
• Compliance Access various banking services,
• Customer Focus money transfers, and payments easily
• Teamwork via *150*66# or the NMB Mkononi App
• Innovation
Wholesale Banking
4.1 Million +3,300
Treasury Banking
Leadership Employees
NMB leverages the expertise of a seasoned Rewarding careers,
Board of Directors, backed by a proficient competitive remunerations
Executive Management Team, that actively
and rewards with professional
foster a thriving organizational culture and
guarantee strategy execution. development.
Talent
The Bank has a diverse workforce of more Customers
than 3,600 individuals, brought together Safeguarding and expanding the
by shared principles and a culture that financial assets of individuals,
promotes inclusivity and excellence.
private and public institutions
Innovation and partnerships
NMB consistently improves its technological
base, including digital capabilities to enhance
Community
accessibility, streamline processes, and
ensure utmost security in banking. Contributing to the nation’s
socio-economic progress, the
Service Excellence Bank is dedicated to supporting
NMB is devoted to grasping customer endeavors that foster a robust
needs and utilizing data-driven insights and and enduring economy under the
innovation to offer an exceptional customer guidance of Tanzania’s leadership
experience. vision.
Governance
The Bank possesses a robust and efficient
Regulators and the Government
governance structure founded on the most
global benchmarks. This structure serves Engaging with relevant authorities
as the bedrock for achieving sustained to support a conscientious
prosperity and showcases the honesty and regulatory framework.
openness that our stakeholders deserve.
Resilience
We are a domestic, systemically important Investors
bank with total assets exceeding TZS 12.2 Providing robust returns and
trillion, robust liquidity, and strong credit
long-term value to investors.
ratings.
A responsible bank
The Bank strongly emphasizes sustainability Suppliers
within its strategic priorities. We are dedicated
Collaborating with our suppliers,
to enhancing NMB’s role in supporting
Tanzania’s goal of fostering an inclusive and providing them with avenues for
environmentally friendly economy through shared prosperity.
various CSI and ESG projects.
Brand
NMB possesses significant brand equity
and entices an expanding customer base of
7.1 million individuals. NMB Integrated Annual Report 2023 | 10
Overview
Investors Employees
NMB Bank is committed to delivering robust We deeply acknowledge that our workforce is the
returns and fostering long-term sustainable value cornerstone of our performance and productivity.
for our esteemed investors. Our commitment to fostering a diverse tapestry
of cultures and experiences sets us apart.
How We Serve & Engage We’re nurturing a future-ready workforce to
adapt to evolving client needs and technological
Our business model thrives on capital from debt
advancements.
and equity investors, which is pivotal in executing
our strategic vision. We ensure transparency Collaborating with our employees, we’re co-
by providing investors with comprehensive creating an inclusive, innovative, and client-
progress updates against our strategic and centric culture that fuels ambition, action, and
financial frameworks, whether within short - or accountability.
long - term horizons. Furthermore, our footprint
and sustainability initiatives, such as Jamii How We Serve & Engage
Bond, expose investors to emerging market
opportunities. Our regular engagement with employees through
multiple channels is the bedrock for superior client
Looking ahead to 2024, our engagement with service and upholding our Purpose and Values.
investors will continue, updating on our strategic A culture embedded in inclusivity and ambition
priorities, financial framework progress, and our enables us to unlock innovation and execute our
trajectory towards target returns. business strategy.
We aim to generate value by providing easily NMB Bank is dedicated to fortifying our operations
accessible banking solutions that cater to by consistently providing efficient, sustainable, and
everyday needs while ensuring affordability and value-driven goods and services through supplier
exceptional customer service. We empower engagements.
individuals to nurture and safeguard their finances,
assist businesses in various operations, such as How We Serve & Engage
trading, transactions, investments, and growth,
and extend our support to various financial Our supplier engagement strategies are guided
institutions, including banks, the public sector, and by stringent selection, due diligence, and
development organizations. contract management processes that align with
our policies and standards. Strengthening our
How We Serve & Engage supplier governance underscores our proactive
risk mitigation and regulatory compliance stance.
Our approach revolves around innovative products Furthermore, our Procurement policies shade our
and seamlessly integrated digital services, which unwavering commitment to ethics, human rights,
are fundamental to achieving an unparalleled diversity and inclusion (D&I), and environmental
client experience. This involves enhancing our performance. Incoming suppliers align with these
capabilities to safeguard clients against emerging principles, reinforced through standard contract
risks in the ecosystem, such as fraud and templates and periodic engagements emphasizing
cybersecurity, accompanied by robust education on ethics, compliance, and sustainability.
initiatives and enhanced communication channels.
Their Interests
Looking ahead to 2024, we remain committed to
actively listening to and addressing customers • Sustainability and diversity
feedback and concerns, furthering our digital
transformation and innovation endeavors, and • Fair and Transparent tendering processes
aiding our clients as they transition towards
sustainable practices, including pursuing net-zero • Encouragement of supplier-driven innovations
objectives.
• Timely and accurate payments.
Their Interests
• Timely dispute resolution
• Offering unique and differentiated products
and services
1.2 Mn
New Customers
59 4
Net Promoter Score New Branches
NMB Bank proactively collaborates with public NMB Bank is steadfast in its commitment to
authorities to fortify the financial system’s operate as a socially responsible and sustainable
effectiveness and promote stability and entity. By collaborating with local partners,
sustainable growth. we actively contribute to fostering social and
economic development within our communities.
How We Serve & Engage
How We Serve & Engage
Throughout 2023, we engaged with governments,
regulators, and policymakers, focusing on Engagement forms the cornerstone of our strategy,
sustainability, digital innovation, cybersecurity, where we actively collaborate with a diverse
and regulatory frameworks. Our Compliance spectrum of civil society, international partners,
and Regulatory Affairs team ensures alignment and local NGOs. This collaboration spans a
between advocacy and business strategies. In multitude of areas, ranging from environmental
November 2023, NMB Bank Plc emerged as the and public policy concerns to community-driven
national overall winner, recognised as the largest initiatives. Constructive dialogues enable us to
taxpayer in Tanzania and the most compliant comprehend alternative viewpoints while ensuring
taxpayer for the second year. a mutual understanding of our business approach.
Our engagements address specific client needs,
Their Interests transactions, or policy concerns highlighted by
partnering development partners.
• Strong capital and liquidity positions
Their Interests
• Stringent standards for conduct and
combating financial crime • Climate change and environment
• Healthy economies and competitive markets • Human rights
• Positive, sustainable development • Financial inclusion
• Digital innovation in financial services • Social Impact
• Operational resilience and customer
protection.
TZS 4.2 Bn
CSI Spent
TZS 2 Bn
Climate Action Budget
TZS 436 Mn
Amount on Nuru Yangu Scholarship
Capital Input
Financial Capital
Our financial capital forms the bedrock for sustaining and expanding our business operations. It fuels
our growth initiatives, generates sustainable returns, and enhances stakeholders value.
Human Capital
Comprising our skilled workforce, ingrained organisational culture, and collective expertise, our
human capital is pivotal in innovating solutions tailored to our customers’ needs. Our people are the
driving force behind realising our Bank’s vision.
Intellectual Capital
Our intellectual capital encompasses technological innovations, robust systems and processes, and a
heritage-backed strong brand identity.
Manufactured Capital
Our manufactured capital provides a competitive edge, including physical assets like property and
digital assets such as IT systems, enabling us to deliver enhanced value to stakeholders.
Natural Capital
Referring to the resources we utilise to sustain operations, our natural capital reflects our commitment
to responsibly leveraging resources to create lasting value for our stakeholders.
Financial Capital
Shareholder value surged through a substantial increase in net profits, driving robust returns for our
investors. Our strategic focus remains on striking a delicate equilibrium between maximizing immediate
financial gains for shareholders and the imperative investment required for our sustained long-term
growth.
Human Capital
Investing in our workforce constitutes a significant yet essential cost, vital for attracting, retaining, and
nurturing talent. While these investments impact short-term financial capital, they yield substantial long-
term returns across various other capitals.
Intellectual Capital
Balancing increased automation of solutions, which impacts both intellectual and manufactured capital,
against driving client adoption of digital solutions that elevate client experiences poses a trade-off. This
challenge intersects with the need for human interaction, a critical aspect of our human capital.
Manufactured Capital
Efforts to automate solutions and drive digital adoption for superior client experiences through digital
platforms present a trade-off. We recognize the importance of direct human interaction, particularly
through physical branches, in complementing these digital advancements.
Natural Capital
Balancing the utilisation of natural resources, which sometimes negatively impacts human and social
capital, remains a critical trade-off. Our commitment lies in minimizing environmental impacts while
striving to deliver positive environmental outcomes for society.
#1 2x 96% 99%
Most Best Innovation in Share of transactions Stable digital
Innovative Retail Banking in performed on digital platforms-Service
Tanzania channels Uptime
Manufactured
29% 361
29% 20%
FY23
(2022: 25%) (2022: 286)
TZS
FY22 1.224 Tn
Productive, efficient, and effective workforce TZS 1.022 Tn
Staff Productivity Revenue per FTE 14%
15%
6.2x 386
2022:5.4x (TZS Million)
37%
0 +20
Major Cyber Security Digital & Technology Employees Shareholders
Incidents intiatives launched
Government Reinvested
- Financial Inclusion
Value allocated
To Employees:
Salaries and other benefits 227,450 202,428
To Shareholders:
Dividend to other shareholders 123,198 97,639
Government 57,392 45,486
To Government:
Corporate Tax 238,571 186,720
PAYE 61,356 55,083
Skills development levy 9,117 8,785
Excise Duty 47,770 42,838
VAT on services 93,813 84,373
Other taxes 11,887 5,484
462,515 383,283
* Income earned by providing banking services = Interest Income + Fees and Commission Income + Realised Gain on Investment Securities
+ Foreign Exchange Income + Other Income
31
Awards
- Overall, Winner
Most Compliant Taxpayer in Tanzania African Banking Awards: EMEA Finance
- Largest Taxpayer in the category of Financial
Institutions in Tanzania - Best Bank in Tanzania
- Runner-Up in the overall winner category - Best Innovation in Retail Banking in Tanzania
Best Employer of the Year 2023
- Runner-up
Best Private Sector Employer 2023
Global Brands Magazine
- Quality, Productivity, and Innovation Award - Best Investment Bank Tanzania 2023
- Best Employer
Gender Equality and Equity Award
Africa Bank 4.0 Awards
Global Business & Finance Magazine - African’s Banking CEO of the year 2023 (Tanzania)
- Best Bank in Tanzania 2023 Award
- Best Bank in Tanzania 2023
- Safest Bank in Tanzania 2023
International Banker 2023
- Best Corporate Social Responsibility Initiative
Tanzania 2023 - Best Commitment to ESG Principles
- Best Retail Bank Tanzania 2023 Tanzania 2023
Euromoney Awards for Excellence 2023 Global SME Finance Awards 2023
- Best Bank for Digital Solutions in Tanzania - SME Financier of the Year Award
- Best Bank for CSR in Tanzania 2023
- Best Bank in Tanzania 2023 World Economic Magazine
- Best Private Bank for High-Net-Worth
- Best SME Bank Tanzania
Individuals in Tanzania
- Best ESG Bank Tanzania 2023
Global Business Magazine
- Best Bancassurance Provider Tanzania 2023
- Best Innovation in Retail Banking in Tanzania - Best Banking CEO Tanzania 2023
- Best Retail Bank Tanzania 2023
NMB Integrated Annual Report 2023 | 22
23 | NMB Integrated Annual Report 2023
Strategy
Review
Bank Strategy
1
Drive Loyalty with Mass:
To ensure seamless strategy
execution, the bank continues to focus By focusing on growth in market share,
increasing ‘share of wallet’, and providing
on the following strategy pillars and
the best-in-class customer experience
enablers.
2
Boost Branch Productivity & Cost
Efficiency:
Key Pillars
3
Enhance Credit Risk Management:
4
Enhancing our digital Capabilities:
5
Deepen Penetration in Wholesale,
Win in SME and Agri
By strengthening strategic
relationships and partnerships while
unlock growth potentials.
We continued to make good progress against our key strategic areas of focus in the third year of
executing our Medium-Term Plan (2021-2025):
Financial
Highlights Robust balance sheet
Total Assets
Selected financial metrics (TZS Tn)
for FY’23
2023 12.2
2022 10.3
Net Profit
2021 8.7
545.2
TZS Billion Net Loans
(TZS Tn)
28.6% 2022
4.65
6.01
2021
23.26% SME
5%
Agribusiness
Large 5%
Corporates
Liquid Asset Ratio 25%
33.2%
Other SWL
Consumer
Loans 52%
Cost of Risk
8%
1.06% MSE
5%
23.25% 23.26%
Core Capital (%) Total Capital Ratio (%)
134 Mn 51 Mn
Volume of transactions executed through NMB Volume of transactions executed on the bank’s
Mkononi and USSD, the banking platform in millions ATM machines in millions
2022 82 2022 47
2021 57 2021 41
Superior Returns
2022 286
1-year 5-year 10-year
2021 193
Share Price
4,500
3,500
2,500
1,500
Chairman’s
Statement
15% 1,355
Our strong performance marked exponential
business growth across all our businesses, as 1,131
Since embarking on the execution journey of our 2019 2020 2021 2022 2023
5 year Medium-Term Plan (MTP), we have also
361
TZS
28.6% 2.09
TZS Trillion
Sustained Superior Results Our mass account opening strategy and best-
in-class customer propositions continue to yield
Three years into implementing our medium- positive outcomes, with our customer base reaching
term strategy, I am pleased to report record and 7.1 million customer accounts, further deepening
remarkable results for the Bank and the highest NMB’s impact and leadership in driving Tanzania’s
profit ever recorded by any financial institution in financial inclusion agenda.
Tanzania. The net profit increased by 26% to TZS
545 billion, with the return on equity increasing The Bank’s performance gives us confidence in our
to 28.6% from 25% in 2022. This has been progress and strategic ambitions. As we progress
accompanied by significant efficiency gains as the along our strategic journey, we intend to invest more
cost-to-income ratio improved by 30 basis points profoundly in our clients’ needs and build on what
to reach 39% in 2023. The balance sheet has also we have done successfully over the last few years to
experienced sustainable growth, with loans and further improve outcomes for our stakeholders.
advances increasing by 28% to cross the TZS 7.7
trillion mark. Sharpened Focus on Sustainability and ESG
Agenda
The quality of our asset portfolio has improved
significantly despite the underlying macroeconomic In remaining steadfast to our aspirations of being
challenges. Our NPL is well below the regulatory a responsible bank, we continued to sharpen our
threshold of 5% (at 3.2% in 2023), and the focus on sustainability. We gained momentum in
annualized cost of risk is improving YoY, owing embedding sustainability within the organization
to prudential portfolio management standards and as a core facet of our strategy. This is reflected
introduced as part of our refreshed end-to-end Credit through the commitment of the Board to dedicate
Risk Management and increased emphasis on the and set aside TZS 2 billion in 2023 to support
quality of our credit origination. Climate and Sustainability initiatives, which saw
2023 361
2022 286
2021 193
2020 137
2019 96
Appreciations
Taarifa ya
Mwenyekiti
Kwa niaba ya Bodi ya Wakurugenzi, ninayo furaha Tangu kuanza kwa safari ya utekelezaji wa Mpango
kuwajulisha ya kuwa, mwaka 2023 ulikuwa mwaka wetu wa Muda wa Kati (MTP), tumeshuhudia
wa mafanikio ya kihistoria kwa Benki ya NMB. mabadiliko makubwa katika nyanja mbalimbali
Mafanikio haya yalitokana na utekelezaji madhubuti za kimkakati ikiwemo, uwekezaji kwenye teknolojia,
wa mipango ya kimkakati, pamoja na uwekezaji rasilimali watu na misingi ya utawala bora.
mkubwa katika rasimali watu, teknolojia,mifumo ya Mabadiliko haya yameendelea kuwa chachu ya
kidijitali, na misingi ya uongozi na utawala bora. Bodi ukuaji endelevu wa Benki ya NMB. Katika kipindi
ya Wakurugenzi inaridhishwa na mwenendo mzuri hiki cha utekelezaji wa Mpango wetu wa Muda wa
wa kiutendaji na mafanikio ya Benki kwa miaka ya Kati, tumeweza kuboresha huduma kwa wateja wetu
hivi karibuni. Bodi ya Wakurugenzi ina imani na kupitia masuluhisho yanayoakisi mahitaji yao, na pia
mikakati na uelekeo wa Benki kwa miaka ijayo. tumeweza kukuza maradufu faida ya mtaji na gawio
kwa wanahisa wetu na kufikia viwango vya juu zaidi
Mnamo mwaka 2023 Benki ya NMB iliendelea katika historia ya Benki ya NMB.
kuweka historia ya kiutendaji katika sekta ya kibenki
Tanzania. Matokeo haya ya kihistoria ni kiashiria
Mtaji wa Wanahisa (TZS
cha uimara na ubora wa mpango mkakati wa Benki Bn) & Faida ya Mtaji 28.6%
yetu. Kwa miaka takribani minne sasa, Benki yetu ROE (%)
25%
imeendelea kuwa kinara wa kiutendaji na kiufanisi 2,093
nchini Tanzania na imeendelea kukua kwa kasi 21%
licha ya sekta ya kibenki duniani kugubikwa na 1,690
15% 1,355
Gawio kwa
Faida ya Mtaji wa Wanahisa
kila Hisa
Mtaji TZS
28.6% 2.09
TZS
361 Trilioni
Ongezeko la 26% kutoka 40bps ongezeko kutoka 24% ongezeko kutoka shilingi
shilingi 286 mwaka 2022 25% mwaka 2022 trilioni 1.7 mwaka 2022
Matokeo Mazuri na Endelevu kufikia asilimia 3.2 ikiwa chini ya Kiwango cha juu
cha udhibiti cha asilimia 5 kilichowekwa na Benki
Katika kipindi cha Miaka mitatu ya utekelezaji wa kuu ya Tanzania, pia gharama za udhibiti hasara
mkakati wetu wa muda wa kati, ninayo furaha itokanayo na mikopo imeendelea kuimarika zaidi
kuwajulisha kuwa Benki imeendelea kuwa na ukuaji mwaka hadi mwaka hadi mwaka.
imara na bora zaidi katika sekta ya kibenki nchini.
Katika kipindi hiki, Benki imeendelea kuweka historia Dhamira yetu ya kuongeza ujumuishaji wa
ya kiutendaji na kiufanisi. watanzania kwenye sekta rasmi ya kibenki kupitia
huduma bora na nafuu imeendelea kupata matokeo
Kwa mwaka 2023, Benki ilipata Faida Baada ya Kodi chanya. Kwa mwaka 2023 tuliweza kuongeza wigo
ya shillingi bilioni 545, ikiwa ni ongezeko la asilimia wa wateja na kufikia wateja milioni 7.1 ikiwa ni idadi
26 (mwaka hadi mwaka), huku Faida ya Mtaji kubwa zaidi ya wateja katika Benki nchini Tanzania.
ikiongezeka na kufikia asilimia 28.6, ukilinganisha Tuna imani ya kuwa juhudi zetu katika kurahisisha
na asilimia 25 ya Mwaka 2022. Mafanikio haya ya upatikanaji wa huduma nafuu za kibenki zitaendelea
Kiutendaji, yanakwenda sambamba na mafanikio kuchochea ukuaji wa kiuchumi wa taifa letu na mtu
makubwa ya kiufanisi kwani uwiano wa gharama mmoja mmoja pamoja na ustawi wa jamii zinazo
kwa mapato uliimarika kwa alama 30 kufikia asilimia tuzunguka.
39 mwaka 2023. Mizania ya Benki pia imeendelea
kuwa na ukuaji imara, ikichagizwa na ukuaji wa Utendaji wa Benki yetu unatupa imani katika kufikia
mikopo kwa asilimia 28 hadi kufikia shillingi 7.7 malengo yetu. Tunapoendelea na safari yetu ya
trilioni. kimkakati, tunadhamiria kuwekeza zaidi kwenye
matakwa ya wateja wetu na kuendeleza kile
Benki imeendelea kuimarisha usimamizi wa mikopo ambacho tumefanya kwa mafanikio katika miaka
inayotolewa kwa wateja na hivyo kushuhudia iliyopita ili kuboresha zaidi thamani ya mchango wa
matokeo chanya katika enoe hili. Uwiano wa mikopo Benki kwa wadau wote.
chechefu kwa mikopo ghafi umeendelea kuimarika
Operating
Environment
Macro-Economic Overview
3.1 3.5
2023 2022 geopolitical tensions and stringent financial circumstances, resulting
in sluggish trade expansion, and diminished consumer spending.
Despite the headwinds, the progress in the post-pandemic
environment offered some support. Global inflation is forecasted to
decline from 8.7 % in 2022 to 6.8 % in 2023 and 5.8 % in 2024 due
to tighter monetary policy aided by lower international commodity
prices.
4 4.1
2023 2022 macro challenges. Regional disparities in recovery are becoming
more pronounced, leaving room for policy mismatch. Resource-
dependent nations and leading commodity exporters are anticipated
to perform strongly, benefiting from fierce competition and elevated
commodity prices. This includes emerging Asian economies
like India, Indonesia, and Thailand. Latin American and Eastern
European nations are also positioned for a rebound.
Africa Economy The economic growth for Africa in 2023 indicates a slight expansion,
as per the IMF 2024 report, estimating an average GDP rise of 4%
4 3.3
2023 2022 from 3.3%. Nevertheless, this development is foreseen to come
with challenges linked to debt sustainability, fiscal constraints,
inflationary trends in certain nations and climate issues.
East Africa East Africa is projected to experience the highest regional economic
growth on the continent for 2023 and 2024. The region’s growth
5.8 5.1
2023 2022 is driven by several factors, including the services sector, which
contributed almost half of the economic growth in 2023.
5.3 4.7
in 2023 and is estimated to have grown by 5.3%, according to
2023 2022
the Bank of Tanzania. This resurgence was predominantly fueled
by robust expansion in the service sectors, notably financial and
insurance services.
12,220 54,221
Total Deposits #1
8,474 38,647
7,707 32,037
Total Income #1
1,402 5,334
775 2,249
NMB Banking
Sector
CEO’s
Statement
545
TZS Billion
1.4
TZS Trillion
12.2
TZS Trillion
Our commitment to developing and retaining a In 2023, we invested over TZS 6.2 billion in our
highly skilled workforce is crucial for accomplishing community and sustainability-related initiatives. The
our Strategy. We have intensified our efforts in bank dedicated TZS 4.2 billion, equivalent to 1% of
talent acquisition, nurturing growth, and fostering the bank’s 2022 Profit After Tax, to support a range
development by continuously enhancing our staff’s of Corporate Social Investment (CSI) initiatives in
skills through ongoing learning opportunities. health, education, entrepreneurship, and financial
During the year, we increased the staff budget for literacy areas. Additionally, a separate allocation of
learning and career development by 8% to support TZS 2 billion was explicitly earmarked for advancing
our colleagues’ educational and professional climate change and sustainability projects,
development. The calibre of our employees can demonstrating the bank’s commitment to social
be demonstrated through internal promotions, with responsibility and environmental stewardship.
internal appointments accounting for 59% of total
hires. Thus, productivity per full-time employee
(FTE) increased to TZS 386 million in 2023 (TZS
342 million: 2022). NMB Integrated Annual Report 2023 | 44
We also continued to lead the sustainability agenda Outlook
by issuing the first sustainability bond in East Africa,
amounting to TZS 400 billion, to finance eligible Delivering our Strategic Plans in 2024 and Beyond
green and social projects. In recognition, we have
been named “The Best Bank for CSR (Euromoney)” Our commitment remains unwavering in 2024
and “The Best Commitment to ESG Principles” in and beyond. We seek to create sustainable value
2023 (the International Banker). beyond financial returns through our banking
products, solutions, and operations. We will continue
The quality of our governance principles also to take a long-term view in our decision-making,
continues to improve markedly and remains a focusing on delivering superior results and solid
distinguishing factor for us. In 2023, the Global returns. We will champion a practical transition to
Business& Finance Magazine named NMB “The a low-carbon economy while balancing Tanzania’s
Safest Bank in Tanzania,” while the Tanzania unique needs for continuous economic growth,
Revenue Authority named us “the Largest and Most poverty reduction, and financial inclusion. With the
Compliant Taxpayer in Tanzania.” opportunities that lie ahead, we believe we are on
course to continue being a force for positive impact
These achievements undoubtedly highlight our in Tanzania and beyond.
continued market leadership status. Euromoney
has again (10x times in 11 years) named us “the Appreciations
Best Bank in Tanzania,” further underscoring NMB’s
market leadership position. I would like to express my sincere gratitude to our
Board, shareholders, regulators, the Government,
our valued customers and staff. Thank you all for
your continued support.
Taarifa ya Afisa
Mtendaji Mkuu
545
Bilioni
1.4
Trilioni
12.2
Trilioni
Imeongezeka kwa 26% kutoka Imeongezeka kwa 18% Imeongezeka kwa 19%
Shilingi 432 bilioni mwaka 2022 kutoka mwaka 2022 kutoka mwaka 2022
akaunti mpya milioni 1.2 katika huduma za kibenki wetu. Tumeendelea kuimarisha juhudi katika
na ili kuwafikishia Watanzania huduma za kifedha kutafuta na kuendeleza vipaji vya watu wetu. Mwaka
karibu, tulifanikiwa kufungua matawi mapya manne 2023 tuliongeza bajeti ya mafunzo kwa asilimia 8
na kuongeza idadi ya mawakala wetu wanaotoa ili kuwawezesha wafanyakazi wetu kujiendeleza
huduma za kibenki hadi kufikia 28,295. kitaaluma na kielimu. Tija ya watu wetu iliongezeka
hadi kufikia kiasi cha shilingi milioni 386 kwa kila
Sambamba na utekelezaji wa mkakati wetu wa mfanyakazi ukilinganisha na shilingi milioni 342
miaka mitano tumeendelea kuwekeza kwenye mwaka 2022. Hii ni ishara ya kwamba uwekezaji
teknolojia ili kurahisisha upatikanaji wa huduma tunaoufanya kwa watu wetu umeendelea kuzaa
zetu. Hadi kufikia Disemba 2023, asilimia 96 ya matunda.
miamala yote ya wateja wetu ilikua ikifanyika nje
ya matawi yetu kupitia huduma zetu za kidijitali.
Sambamba na hilo tumefanya maboresho makubwa Uendelevu na Uwekezaji kwa Jamii
kwenye mifumo yetu ya usajili wa wateja na hivyo
ninayo furaha kwamba asilimia 84 ya wateja Ndani ya Benki ya NMB tunaamini ya kwamba
tuliowafungulia akaunti, zilifunguliwa kwa njia ya ajenda ya uendelevu si tu uwajibikaji katika jamii bali
kidijitali kupitia maafisa mauzo wetu. pia ni mkakati katika kuimarisha biashara, uvumbuzi,
ushindani na uendelezaji thamani wa muda mrefu.
Kama Benki kiongozi tunaendelea kuwa mstari
Mazingira bora ya kazi wa mbele kwenye agenda ya uendelevu na kwa
kufanya hivyo tumeweza kusaidia katika kutimiza
Ahadi yetu ya kuendeleza na kuwa na wafanyakazi ajenda ya Umoja wa Mataifa kuhusu maendeleo
wenye upeo na weledi wa hali ya juu imeendelea endelevu na kuchangia katika kupunguza uzalishaji
kuwa msingi wa utekelezaji wa mpango mkakati wa hewa ya ukaa.
CFO’s
Statement
Since we set our 2023 targets in November 2022, Our balance sheet remains a pillar of strength,
the global economy has experienced significant with total assets reaching TZS 12.2 trillion by the
macroeconomic headwinds, with foreign exchange end of 2023, marking a robust 19% YoY increase.
liquidity and rising interest rates impacting the This growth is primarily attributed to the Bank’s
banking industry. Despite the challenges, the expanding deposit base and loan book, which have
Bank has made significant progress against its grown by 11% and 28%, respectively.
strategic objectives, achieving growth in its core
businesses, and maintaining balance sheet strength Strong income momentum
while advancing digital transformation and its
Sustainability agenda. In 2023, the Bank’s total income reached a
staggering TZS 1.4 trillion, a remarkable 18%
Thanks to the quality of our business model and increase from TZS 1.2 trillion in 2022. This
the disciplined execution of our strategy, we have impressive growth was primarily driven by the robust
achieved historic results that we can all be proud expansion of our net interest income (NII), which
of. Our record profit was driven by exponential surged by 19% to TZS 937.2 billion from TZS 786.4
loan book growth, double-digit deposit growth, billion in 2022. Our non-funded income (NFI) also
solid portfolio quality, and significant efficiency experienced a healthy growth of 16% YoY, reaching
gains. Profit Before Tax grew by 26% to TZS 775 TZS 468.4 billion compared to TZS 402.1 billion in
billion, and Profit after tax increased by 26% to 2022.
TZS 545 billion from TZS 432 billion in 2022. These
profitability levels mark a historic new high for the Net Interest income
bank and the Tanzania financial services sector,
reinforcing our commitment to delivering value to our The NII had robust performance in 2023, primarily
stakeholders. due to 42% growth in earning assets to TZS 9.3
trillion from TZS 6.6 trillion in 2022; this is the
highest net interest earned by a bank since its
inception in 1997.
51 | NMB Integrated Annual Report 2023
The Bank continues to optimize its balance sheet to activity on foreign currency transactions and the
increase earnings from its assets. Interest earned rise in cross-border activities.
from Loans and Advances to customers amounted
• Agency banking income rose by TZS 6.5 billion,
to TZS 958.8 billion, up 24% from 2022. Interest
primarily driven by improving the service delivery
earned from investments in Government securities
model and revamping the agency banking
grew by 24% YoY to TZS 208.8 billion, following
channel. Thus, onboarding more than 11,000
a TZS 17% YoY increase in investments in debt
new agents/wakala, closing the year with 28,295
securities.
nationwide and bringing our banking services
closer to our customers.
Interest expenses significantly increased in 2023,
to TZS 246 billion from TZS 167 billion (47% YoY), • The revitalization of NMB Mkononi resulted in a
due to the rising interest rate environment in Global 28% income growth, reaching TZS 86.9 billion.
markets. This pushed the cost of deposits
1,286 and
borrowing higher in the industry
1,190 than the previous • Card business income increased by 11% to TZS
year. The bank895continues to deploy several deposit 33 billion.
mobilization initiatives geared towards further
fortifying our funding base and maintaining liquidity 19% 14%
position within acceptable levels for sustainable
growth momentum.
2023 1,180
23%
11%
2022 954 7%
Card Business
In 2023, we made tangible progress against our
revenue diversification strategy and improved
our digital delivery platforms, allowing our clients Significant efficiency gains
to access services conveniently, quickly, and
seamlessly. Top-line growth saw total operating expenses
increase by 10% YoY, based on broad-based
As a result, non-interest income increased by 16% investment in the business’s growth. Meanwhile, we
to TZS 468.4 billion, significantly contributing to improved our cost-to-income ratio by 30 basis points
the bank’s revenue and representing 33% of total to 39%, maintaining disciplined cost management
income in 2023. and enhancing productivity.
The following highlights the significant changes In implementing our Medium-Term Plan (2021-
across NFI segments. 2025), we have increased our efficiency in the past
five years by adopting a cost-optimization approach
• Forex trading income increased by 37% to TZS
encompassing digitalization and investment in our
65.8 billion, primarily driven by increased client
people to increase productivity.
NMB Integrated Annual Report 2023 | 52
Robust liquidity, funding, Continuously refining our Cost-to-
Income ratio has been a strategic focus,
and Resilient 2023 with a notable emphasis on optimizing
Performance operational efficiencies.
545.2
the MTP, when it peaked at 59% in 2018.
28.6% 7%
23.26% 15%
361 TZS
Office Exp
4,185 TZS
Total assets increased significantly to TZS 12.2
trillion, driven by increased customer Loans and
up 24% from TZS 3,375 in 2022 Advances and prudent investment in Government
securities. Our portfolio remains healthy and of high
quality. Customer Deposit growth in the Retail and
3-Year Total
Wholesale segments remained strong throughout
Share Performance
the year, albeit slower than our loan velocity.
+92%
53 | NMB Integrated Annual Report 2023
Despite the deceleration of the overall credit growth We maintained a strong capital position with a
to the private sector in the economy from 23% in Tier 1 capital ratio of 23.25% (2022: 23.08%) and
2022 to 17% in 2023, our loan portfolio grew by a total capital ratio of 23.26% (2022: 23.09%).
28% YoY in 2023, reaching TZS 7.7 trillion driven by Therefore, the bank retains a significant capital
management buffer over the regulatory minimum
loans growth.
requirement of 12.5% for core capital and 14.5% for
total capital. Overall, our balance sheet continued to
Total deposits amounted to TZS 8.5 trillion in 2023, be supported by high levels of capital and liquidity,
representing an 11% YoY growth from TZS 7.6 enabling us to grow our business with customers
trillion in 2022. This growth reflects the positive while meeting additional regulatory requirements.
results of improved customer experience and
disciplined execution of our deposit mobilization Asset Quality
strategies during the year. Robust Customer
Asset quality remained strong as net charge-offs
deposits growth was mainly supported by wholesale
remained low. Impairment charges closed the year
banking customer deposits growth of 21%,
4% higher than that recorded in 2022 on account
amounting to 3.7 trillion. CASA continues to account of the accelerated growth of our loan book. The
for a large share of total Customer deposits. non-performing loan-to-gross loans ratio remains
stable at 3.2% compared to 3.1% in 2022, and it is
below the industry level of 4.3% and the regulatory
minimum of 5%. The stability in the NPL ratio was
1,286 due to the disciplined execution of our prudent credit
1,190 risk management strategies. NPL coverage remains
895
7,157
strong at 96%, and the cost of risk remains low at
1.06%.
6,410
5,679 Taxation
We remain highly liquid and well-capitalized with Our commitment to responsible banking practices
a stable funding mix. The Bank’s liquidity surplus and high governance standards continues to set us
continues to comfortably exceed both regulatory apart. In 2023, our bank was honored as ‘The Safest
requirements and our prudent internal risk appetite Bank in Tanzania’ and received four sustainability
metrics, ensuring a substantial buffer in the event of and three taxpayer awards. Additionally, we have
any outflows. effectively raised and introduced the NMB Jamii
Bond, marking a milestone in our sustainability
We also further improved our funding mix. Low-cost initiatives.
current and savings account (CASA) balances
comprise 85% of our total Customer Deposit base,
up from 84% in 2022. Current and savings account
balances grew strongly by over 12.5% YoY to TZS
7.2 trillion.
Returns to shareholders
Basic earnings per share (TZS) 1,090 863 584 420 289
Dividend per share (TZS) 361 286 193 137 96
Dividend cover 3 3 3 3 3
Net asset value per share (TZS) 4,185 3,380 2,709 2,262 1,938
Ratios (%)
Return on average Shareholders Fund 29 25 21 18 11
Return on average Total assets 5 4 3 3 2
Return on average Risk-weighted assets 7 6 6 4 3
Earning Assets To Total Assets 83 80 77 79 73
NPL Ratio 3 3 4 5 7
Gross loans and advances to Total 95 82 73 78 73
Deposits
Cost-to-income ratio 39 42 46 50 57
Non-interest income to gross income 33 34 31 32 28
23
23
23
23
23
23
23
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3
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30
30
28
31
30
31
30
31
31
30
31
30
Taarifa ya Afisa
Mkuu wa Fedha
“Katika mwaka wa Fedha wa 2023, Benki ilifikia
rekodi mpya ya mapato, ambapo, mapato ya jumla
yaliongezeka kwa asilimia 18 kutoka shilingi
trilioni 1.2 mwaka 2022 hadi kufikia shilingi trilioni
1.4 mwaka 2023. Mapato haya yamechangiwa
na ongezeko la mikopo kwa wateja na uwekezaji
kwenye dhamana za Serikali, pamoja na ongezeko
la miamala ya kibenki.”
Juma Kimori
Afisa Mkuu wa Fedha
Tangu tulipoandaa mkakati wa Benki na kupanga Matokeo haya yanaifanya Benki kuweka historia
malengo yetu kwa mwaka 2023, uchumi wa dunia nyingine ya kuongoza wa kiutendaji nchini Tanzania,
umepitia changamoto mbalimbali huku kupanda kwa kwa kupata faida kubwa zaidi kuwahi kutokea
riba kukiathiri sekta ya kibenki duniani kote. Pamoja katika sekta ya kibenki nchini Tanzania, na hivyo
na changamoto hizo Benki yetu ya NMB imeweza kuivunja rekodi tuliyoiweka mwaka 2022. Msisitizo
kufanya vizuri katika utekelezaji wa mpango mkakati na dhamira yetu ni kuhakikisha tunaendelea kupata
wake, huku tukishuhudia ukuaji mzuri wa biashara matokeo bora, yenye mchango chanya katika
yetu, uliochagizwa na ukuaji bora na kuimarika uchumi wa taifa letu, wanahisa na wadau wengine
kwa mizania ya Benki. Katika kipindi hiki, pia Benki wote wa Benki, ikiwemo jamii inayo tuzunguka.
ilifanikiwa kuongeza uwekezaji katika mageuzi ya Katika kuhakikisha hili, Benki imeendelea kuweka
teknolojia na ajenda nzima ya maendeleo endelevu. misingi imara itakayo hakikisha tunaendelea kukua
na kutoa gawio la kutosha kwa wanahisa wetu.
Hivyo basi, katika nyanja mbalimbali za kiutendaji
na kiufanisi, mwaka 2023 ulikua mwaka wa kipekee Mizania ya Benki pia imeendelea kukua hadi
na wa kujivunia kwa kila mmoja wetu. Kutokana na kufikia shilingi trilioni 12.2 kwa mwaka 2023 ikiwa ni
dhamira yetu ya kuhakikisha tunaendelea kukuza ongezeko la asilimia 19 ukilinganishwa na mwaka
thamani ya mchango wa Benki kwa wadau wote, 2022. Ukuaji huu ulichagizwa zaidi na ukuaji wa
tumeshuhudia matokeo bora na ya kihistoria, huku asilimia 28 wa mikopo kwa wateja, pamoja na
Benki ikiendelea kukua zaidi ikilinganishwa na ongezeko la asilimia 11 la amana za wateja.
mwaka 2022. Katika kipindi hiki, Faida ya Benki
kabla ya kodi imekua kwa asilimia 26 kufikia shilingi Mwenendo thabiti wa mapato
bilioni 775, huku Faida baada ya kodi ikifikia shilingi
bilioni 545 kutoka shilingi bilioni 432 kwa mwaka Katika mwaka wa fedha wa 2023, Benki ilifikia
2022. Faida hii inatokana na kuongezeka kwa rekodi mpya ya mapato, ambapo, mapato ya
ufanisi, kukua kwa mizania ya Benki, ubora na jumla yaliongezeka kwa asilimia 18 kutoka shilingi
umakini katika kusimamia mikopo, na kuongezeka trilioni 1.2 mwaka 2022 hadi kufikia shilingi trilioni
kwa miamala ya wateja katika kipindi hiki cha nusu 1.4 mwaka 2023. Mapato haya yamechangiwa
ya kwanza ya mwaka. na ongezeko la mikopo kwa wateja na uwekezaji
kwenye dhamana za Serikali, pamoja na ongezeko
57 | NMB Integrated Annual Report 2023 la miamala ya kibenki.
Mapato Halisi ya Riba • Kuongezeka kwa mapato yasiyo ya riba mwaka
2023 kumechangiwa zaidi na ongezeko la
Kutokana na ukuaji wa mikopo kwa wateja na asilimia 37 ya faida itokanayo na miamala ya
uwekezaji kwenye dhamana za Serikali, mapato fedha za kigeni hadi kufikia shilingi bilioni 65.8.
yatokanayo na riba yameendelea kukua mwaka
• Baada ya kufanya mapitio ya mfumo wetu wa
hadi mwaka. Ndani ya mwaka 2023 mapato ya
NMB wakala tumeweza kuongeza idadi ya
riba yatokanayo na mikopo yalikuwa kwa asilimia
mawakala zaidi ya elfu kumi na moja (ongezeko
24, na kufikia shilingi bilioni 958.8, huku mapato ya
la asilimia 42 mwaka hadi mwaka) hivyo
riba yatokanayo na uwekezaji kwenye dhamana za
kupelekea kuongezeka kwa mapato yatokanayo
Serikali yalikua kwa asilimia 14 na kufikia shilingi
na huduma za NMB wakala kwa kiasi cha
bilioni 208.8.
shilingi bilioni 6.5 (ongezeko la asilimia 19
mwaka hadi mwaka).
Gharama za riba kwa mwaka 2023 zilishuhudia
ongezeko la asilimia 47 hadi kufikia shilingi bilioni • Vile vile, mapato yatokanayo na huduma za
246 ukilinganisha na shilingi bilioni 167 mwaka 2022, NMB Mkononi yaliongezeka kwa asilimia 28
hii ni kutokana895
na kuongezeka kwa viwango vya hadi kufikia shilingi bilioni 86.9. Ongfezeko
riba katika masoko ya kifedha hivyo kusababisha hili linatokana na maboresho ya kidijitali
kuongezeka kwa gharama za riba kwenye amana tuliyoyafanya mwaka 2023.
na mikopo kwenye sekta ya kibenki ukilinganisha na
kipindi kilichopita. Benki imeendelea kuchukua hatua • Mapato kutokana na matumizi ya kadi
mbalimbali za kimkakati zenye lengo la kukuza yameongezeka kwa asilimia 11 na kufikia shilingi
amana za wateja zenye gharama nafuu na hivyo bilioni 33.
kupunguza ukuaji wa gharama za riba.
19% 14%
Mapato ya Riba
(TZS Bn)
6% 20%
2023 1,180
2022 954
23%
11%
2021 815
7%
Mapato ya fedha Ada zinazo husiana
za kigeni na mikopo
Mapato yasiyo ya Riba Huduma za kibenki Ukusanyaji wa
kupitia mawakala madeni sugu
28.6%
tunaoufanya kwenye mageuzi ya kidijitali, rasilimali
watu, hivyo kushusha gharama za uendeshaji
kutokana ongezeko la tija, lakini pia kuchagiza
Imeongezeka kutoka 26% mwaka 2022
ongezeko zuri la mapato, hivyo kusababisha
kuimarika kwa ufanisi na kupunguza uwiano wa
Uwiano wa mtaji wa Jumla
gharama za uendeshaji na jumla ya mapato kutoka
kiwango cha juu cha asilimia 59 mwaka 2018.
361
Limeongezeka kutoka shilingi 286 mwaka 2022
7%
17%
4,185
Imeoongezeka kwa 24%kutoka shilingi
15%
+92%
Ongezeko la Bei ya Hisa ndani ya miaka 3
Gharama za matumizi
ya ofisi
Uwiano (%)
Uwiano wa Faida baada ya Kodi na Wastani 29 25 21 18 11
wa mtaji wa Wanahisa
Uwiano wa Faida baada ya Kodi na Wastani 5 4 3 3 2
wa Mali
Wastani wa Uwiano wa Mikopo Isiyo na 7 6 6 4 3
Vihatarishi
Uwiano wa mali zinazozalisha na Jumla 83 80 77 79 73
ya Mali
Uwiano wa mikopo chechefu 3 3 4 5 7
Uwiano wa mikopo na amana 95 82 73 78 73
Uwiano wa Gharama na Mapato 39 42 46 50 57
Uwiano wa mapato yasiyo ya riba na 33 34 31 32 28
Mapato ghafi
23
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Ownership
The total number of shareholders as of 31 December 2023 is estimated to be 17,014 (2022: 17,078, 2021:
17,358). None of the Directors holds significant shares in the Bank.
3% - Sajjad
500 Mn
Fidahussein
Rajabali
i
4% - National Shares
Investments Plc
(NICOL)
5% - National Social
Security Fund (NSSF
Uganda)
The Bank has established a Dividend Policy which NMB Bank PLC’s shares are listed on the Dar es
governs dividend payout. Dividend payout is Salaam Stock Exchange (DSE). It is a publicly
proposed by the Board in line with the Policy, and listed company under the NMB ticker. NMB Bank
approved by its shareholders at the Annual General PLC holds a license under the Capital Markets and
Meeting. The directors also consider the provisions Securities Act of 1994, allowing it to be traded on
of the Companies Act 2002 and the Banking and the Dar Es Salaam Stock Exchange. The share
Financial Institutions Act 2006 regarding dividend registration for NMB Bank Plc. is identified by the
payouts. ISIN number TZ1996100222.
The Directors proposed a dividend payment of TZS Information regarding the trading tickets of listed
361 per share amounting to TZS 180,975 million NMB Corporate bonds in the Dar es Salaam Stock
out of 2023 profit. In 2023, a dividend of TZS 286 Exchange and Luxemburg Stock Exchange.
per share, amounting to TZS 143,125 million, was
approved and paid for the year ended 31 December NMB JAMII BOND_TZS
2022. NMB-2023/26. T1A
ISIN: TZ1996105270
The dividend payout ratio for NMB Bank remained NMB BOND TRANCHE 1 (SUSTAINABLE/JAMII)
unchanged, being 1/3 of profit after tax. The bank’s Interest rate: 9.5%
dividend payments have shown stability and growth
over the past 10 years, and its dividend yield NMB JAMII BOND_USD
averaging 6.36%. NMB-2023/26.T1B
ISIN: TZ1996105213
NMB BOND TRANCHE 1 (SUSTAINABLE/JAMII)
Dividend Overview Interest Rate: 6-Month USD Term SOFR + 2.50%
DPS
Dividend Yield
Recognition
in 2023 20+
interactions with investors, analysts, and rating
agencies through a combination of virtual
discussions, conference calls, and face-to-face
Most compliant taxpayer
meetings. These interactions have aimed to present
awarded by TRA.
our strategy, highlight our performance, and provide
valuable insight into our prospects.
Institution paying the largest taxes in Annual General Meeting held in June 2023 with all
Tanzania (All Sectors) resolutions passed with an average approval rate
90%
awarded by TRA. above
Coverage by over
FY’23 Investors Call 1Q23 Results Briefing, 2Q and 1H23 results Post results meeting
Investor call and live briefing, Investor Call with investors
webcast. and live webcast
Integrated Annual
Report Issuance
Retail
Banking
Flibert Mponzi
Chief Retail
Banking Delivering excellent results
NMB’s Retail Banking had a strong year in 2023,
delivering strong income and balance sheet growth
while continuing to strengthen its customer base
through strategic investments in digital infrastructure
and technology.
5.9
Retail loans and advances grew 15% YoY to TZS 5.9
trillion in 2023. Asset growth levels were sustained
TZS Trillion in line with the strategy, with strong double-
Up 16% from TZS 5.2 Tn in 2022 digit growth in the portfolio reflecting deepened
customer engagements, improved customer value
propositions, and enhanced customer acquisition
Retail Banking Total Deposits and retention strategies. Retail deposits also
grew steadily, increasing by 10% YoY to TZS 5.3
5.3
TZS Trillion
trillion, with continued enhancements in product
development and propositions supporting further
strengthening the deposit base.
Up 10% Year on Year
Maintaining our dedication to a customer-
centric ethos is at the heart of our strategy and
subsequent success. Our continued commitment to
technological and digital investment has paved the
way for a seamless, integrated Customer Journey,
streamlining the banking process while ensuring
security for our customers. The enhancement of
our State-of-the-art Mkononi app in 2023 marked
another milestone, offering Strong security and
convenience on our digital banking platforms. It also
31.2%
Down 70 bps from 31.9% in 2022
products. We are committed to establishing strategic
partnerships to further expand our card business.
NMB Integrated Annual Report 2023 | 70
Awards
Private
Banking
The Private Banking continued to acquire new Today, we’re proud to record 96% of clients’
clients and deepen existing relationships in 2023. transactions were conducted digitally. We continue
We closed 2023 with total client deposits of TZS 344 to introduce new features to help clients conduct
billion and a total loan book of TZS 172 billion. their financial transactions digitally and seamlessly
transfer funds. Furthermore, we continue to invest in
We support our clients holistically by delivering
our people to equip them with modernized and world
unique and relevant products and solutions,
class relationship skills.
including a full range of lending products and
customized solutions for the private banking To ensure smooth relationship management, Private
segment, to reflect the growing and emerging Banking clients are assigned personal Relationship
affluent market niche in rapidly developing Tanzania. Managers. Clients can also connect in person
to obtain specialised services in Private Banking
We also improved existing client relationships
lounges, which are strategically located across
responsibly by continuing leveraging partnerships
the country. Within the branch premises, a Private
with other lines of business across the bank to
Banking personnel is assigned to assist clients in
continue to improve customer experience. Our
their immediate vicinity.
partnership with Treasury banking, Wholesale
Banking and Other Business segments in Retail
Banking continues to yield benefits for our clients,
helping us serve entire clients by delivering the full
spectrum of our banking capabilities to each client.
59
Strong brand, Customer Effort
Customer advocacy, Score (CES)
93
Accessibility,
Competitive
solutions
High financial service
Customer
experience and utility
Centricity
due to accessibility,
financial ecosystem,
and pan-banking
initiatives
90 Customer
Top customer
Satisfaction
focus ethos
87
Strong positive feedback
from customers
Customer Experience
Delivering Excellent Results
Wholesale
Banking
Overview
Alfred Shao
Chief Wholesale NMB Bank is a prominent financial institution in
Banking Tanzania, serving a wide range of sectors and
customers, including private and public institutions
such as multinational corporations, agribusiness,
mining, development partners, and government
institutions. Our strength lies in our PanBanking
approach, which aims to deliver a comprehensive
set of services customized to address the unique
requirements of our clients. These services include
diverse solutions, such as structured financing,
global digital transaction services (such as
“Throughout 2023, Wholesale remittance, collections, payments, and integrations),
Banking sustained a consistent cash management solutions, trade finance options,
growth trajectory, showcasing project financing, and deposit services. With our
wide-ranging network, a diverse range of banking
commendable advancements in
products, a strong presence in the domestic market,
strategy execution while remaining rich heritage, and profound industry knowledge, we
flexible to adapt to evolving harness these formidable capabilities to strengthen
business landscapes while our commitment to becoming the favored financial
subscribing to a sustainability service partner for Wholesale Banking customers.
agenda.”
1.97
TZS Trillion
Growth 88% YOY, 30% CAGR
Loans
(TZS Tn)
2023 1.97
2022 1.07
2021 0.65
2020 0.67
2019 0.79
Sector Coverage
8% - Transport and
Communication
16% - Agriculture
5% - Trade
6% - Building
0.35% - & Construction
Tourism
13% -
Other
Services
1,968 Bn 7% -
Loans &
Electricity
Advances
6% - Mining
& Quarry
18% - Gas
3.1
ability to meet our clients’ evolving needs.
Awards
Best Investment Bank Tanzania
2023 by Global Brands Magazine
Treasury Overview
The Treasury Business segment demonstrated
a remarkable performance, supported by strong
performance in various areas of the Treasury
Aziz Chacha
Treasurer business, including investments in Government
Securities, Interbank Placements, fixed-income
trading, and a strategic increase in the utilization of
alternative currencies for importation beyond the US
dollar.
287.6
in money market instruments and government
securities amidst liquidity difficulties.
TZS Billion
Up 29% from TZS 223.5 billion in 2023 Total Treasury Assets
73.0
TZS Billion
Up 6% from TZS 3.72 trillion in 2022
34%
Above 20% Regulatory Minimum
21%
TZS 287.6 Bn
Allocation Status
Total Loans Disbursed Total MSE Loans Total SME’s Loans Total Agri Loans
3,078 2,994 84 47
1 NMB Mkononi
Transactions
Million
+61%
Increase to
Internet Banking
Transactions
134 million
+8%
Increase in Volume
Technology
Review
Kwame Makundi
Chief Technology & Overview
Digital Transformation
In 2023, NMB Bank remained steadfast in its
commitment to digital innovation, investing
strategically to enhance our technological
capabilities. Our primary goal was to elevate
customer experiences and streamline internal
operations through digitalization.
99.76%
enhancing employee productivity through digital
solutions.
Technology Investment
Data Privacy and Protection
Investing in technology remains a top priority for
NMB Bank. In 2023, we focused on upgrading our In adherence to the Data Protection Law of Tanzania
server infrastructure, the core banking system and and international regulations like PDPA and GDPR,
updating the network. respectively, the bank has focused on data privacy
mechanisms. A Data Governance Committee
• Server Infrastructure Upgrade: We oversees data management, including privacy and
successfully implemented a new Virtualized protection initiatives. Privacy policies, procedures,
technology-based server system, replacing and standards are established to safeguard
outdated standalone servers. This upgrade customer privacy, incorporating the latest legal and
improves performance and security, minimizing regulatory requirements.
vulnerabilities associated with previous setups.
To ensure customer privacy, the bank conducts
• Network Update: Implementing Software data protection assessments on each product and
Defined Wide Area Network (SDWAN) enhances service, including digital services. It implements
network performance, reliability, security, and security controls such as access control, data
operational cost efficiency. anonymisation, and encryption and adheres to
global standards.
• Core Banking System Upgrade: The upgrade
is designed to streamline complex banking
processes and facilitate smoother operations
across various bank functions, thereby Enhancing Service Management
enhancing the efficiency and effectiveness of
Ensuring high-quality service, including availability,
our services.
reliability, and security, remains a top priority.
Throughout 2023, we focused on maintaining high
uptime for critical systems by promptly addressing
Cyber security any issues. This proactive approach resulted in
an average uptime of 99% for critical systems. We
As outlined in the bank’s Information Technology
prioritize optimal network performance and service
Risk Management Policy, cybersecurity is
availability to ensure uninterrupted access to
recognised as one of the principal risks. The
essential banking services.
Enterprise Risk Management Framework ensures
effective cybersecurity risk management through
robust lines of defence, including the Technology
team as the first line, the Risk Management team as Enhanced Monitoring Capabilities
the second line, and the Internal Audit as the third
The bank has prioritised automation to enhance
line.
system monitoring capabilities, notably implementing
To address cybersecurity risks comprehensively, cellular robots. These robots detect events not
the bank has developed its Cybersecurity Strategy, captured on monitoring dashboards, promptly
considering emerging technologies such as Artificial notifying us of service disruptions, augmenting
Intelligence (AI) and cloud computing, geopolitical proactive response mechanisms, and ensuring an
impacts, evolving cyber threats like Ransomware, uninterrupted banking experience. Throughout the
fiscal year, our organisation achieved commendable
91 | NMB Integrated Annual Report 2023
levels of operational stability, with the IT system and collections for our clients. Integrating with
boasting 99.76% availability, the ATM network over 20 wholesale clients, including corporate
maintaining a robust 96.62% availability, and the clients, government institutions, and fintechs,
branch network demonstrating a resilient 99.64% has significantly enhanced our ability to facilitate
availability, underscoring our commitment to collections, exemplified by the governments over
providing reliable services. TZS 3 trillion collection through the New GEPG v2.0
integration.
28,295
internet banking (NMB-Direct) transactions were
up 8% from 5 million in 2022 to 6 million in 2023.
WhatsApp Banking, launched in late 2021, gained
strong momentum during the year, complementing
Digitally onboarded the growing role of our social media platforms in
retail customers
providing real-time information.
+270k
NMB Mkononi
Transaction volume
134 Mn
Active Daily users
1 Mn
NMB Mkononi Revenue
Generated
86.9 Bn
102 96
83
51 47
72
Awards
57
est Bank for Digital Solutions in
B
2021 Tanzania by Euromoney
Best Innovation in Retail Banking
in Tanzania by Global Business
Magazine
41
Flex Malipo
UmeBima App
NMB Mkononi
Pesa Fasta
NMB Wakala
NMB ATMS
NMB Kwetu
Human Resources
Overview Employees
TZS 386 Mn
masters/post graduate degree, and professional
certifications.
48%
upskilling. In 2023, the Management and Board
of Directors approved an 8% increase in the 2022
Training Budget, making it TZS 5.3 billion in 2023,
Women for staff development. 227 training programs were
implemented, with 6,439 trainees, both from the
32%
surpassed the assigned licenses for usage, with
1,117 users and 89,000 eBook downloads.
Women in Leadership
96.5% achievements;
TZS 258 Mn
Bursary Scheme
At NMB Bank, we prioritize our employees’ Employee well-being and safety are paramount
well-being and offer competitive benefits & at NMB Bank. We bolstered our health and
compensation packages. This year, we enhanced safety protocols throughout the year, ensuring
our staff loan benefit, improved parental leave compliance with occupational health and compliance
policies, and revamped our incentive structures to requirements and standards.
align with individual and team achievements. Our
comprehensive benefits package contributed to a
lower attrition rate of 3.5%. Corporate Culture and Values
The core values of integrity, collaboration, and
innovation continues to shape NMB Bank’s
Performance Management corporate culture. We actively promote a culture
Performance evaluation at NMB Bank is a of inclusivity, respect, and ethical behaviour. Our
collaborative process to foster growth and values resonate throughout our HR practices,
recognition. Our robust performance management contributing to a harmonious and productive work
system integrates regular feedback sessions and environment.
goal-setting exercises. In line with our commitment
In adherence to our strategic priorities, we’ve
to transparency, 92% of employees participated
placed significant emphasis on transforming
in performance reviews, fostering a culture of
our workplace into an inspiring and dynamic
continuous improvement and accountability.
hub, pivotal for delivering unparalleled customer
experiences and driving exceptional performance.
Throughout 2023, we intensified our focus on the
Diversity, Equity, and Inclusion (DE&I) culture transformation journey, achieving significant
milestones (an 89% completion rate) across critical
NMB Bank remains dedicated to fostering a diverse
strategic dimensions. This means that out of the 56
and inclusive workplace within its institutional
interventions designed to address different gaps, 50
framework. Our Diversity, Equity, Inclusion and
were closed by the end of 2023.
Belonging policy and initiatives, including training
programs and resource groups, have driven
positive outcomes. We are proud to report a 6%
increase in women in top management positions, Future HR Strategies
reaffirming our commitment to equity and inclusivity.
Looking ahead, NMB Bank remains committed to
This commitment is not merely a statement but a
furthering our HR initiatives. We aim to introduce a
continual process, evidenced by ongoing initiatives
revised mentorship framework, expand remote work
that extend through 2023.
policies, and implement agile HR practices to adapt
Each passing year marks significant advancements to evolving workplace dynamics. These strategies
in fostering gender diversity, with female align with our vision to empower our workforce and
representation comprising over 48% of our total drive sustainable growth.
workforce and exceeding 31% in leadership roles.
These statistics reflect our commitment and tangible
progress in creating an environment where diverse
voices are heard and respected, propelling us
toward a more inclusive and representative future.
Awards
As we stride into 2024, our vision remains resolute:
to propel our organisation towards greater heights of
excellence and innovation. Building upon the strong
foundation laid in the previous year, we are poised
to embark on an ambitious trajectory of growth, NMB Bank achieved remarkable
transformation, and resilience. recognition at the recent awards in
2023 ceremonies:
Our primary focus will be further amplifying our
employee-centric approach. We are committed to
nurturing an environment that fosters productivity,
MB Bank was honoured as the
N
creativity, and empowerment. We aim to elevate
overall runner-up for the Employer
our employee engagement scores to new heights,
of the Year Award by the esteemed
nurturing a workplace where every individual feels
Association of Tanzania Employers
valued, motivated, and empowered to contribute
(ATE).
their best.
The cornerstone of our strategy for 2024 is centered
on talent, innovation, and adaptability. We are Securing the runner-up position
primed to attract and retain the brightest minds in in the Private Sector for the ATE
the industry, further augmenting our talent pool. Employer of the Year Award 2023
Investing in cutting-edge technology and fostering further highlighted NMB Bank’s
a culture of innovation will be pivotal in maintaining dedication to excellence.
our competitive edge and enhancing customer
experiences across our services.
50 - 59 years
8%
20 - 29 years Women
48%
3%
40 - 49 Youth
3,642 33%
years
30 - 39
38% years
Employees 51% 20 - 35 years
Our long-term
value creation
purpose
Principle 3 - Materiality
Principle 4 - Completeness
• Maintain industry
leading data privacy
and information
security
Sustainable Operations
(Responsible practices) Creating Social Impact
130
Best Employer of the Year Responsible Tax Management Community Impact Awards
2023, Runner-Up in the
overall winner category
The net proceeds will be used to finance eligible green and social assets in line with the Bank’s
sustainability Financing Framework (in adherence to the ICMA Sustainability Bond Guidelines)
MSMEs Loans
Finalizing emissions
baselining and setting future
decarbonization targets
47,181 777
Total Number Amount in
Finalizing the creation of the
of loans TZS Billion
Sustainability Governance
(2022: TZS
Framework 690 Billion)
No material instances of
non-compliance concerning
fair dealing
Governance Awards:
Progress on
Sustainable
Development Goals
(SDGs)
NMB’s business contributes directly to the SDGs
Agenda 2030. We have a firm commitment towards
the Sustainable Development Goals. We play a
crucial role in promoting sustainable development
in Tanzania and across the East Africa region. With
our vast resources and expertise, we have been
instrumental in addressing key challenges related
to financial inclusion, poverty reduction, agriculture
development, MSMEs financing, personal financing,
employment generation, and recently environmental
sustainability.
Establishment of 1 N/A
Environmental and Social
Credit Risk unit
Total value of loans to MSME TZS 777 Billion TZS 690 Billion
customers
Tanzania Employers 4 2
Association Awards
Performance measurement
Prioritise
Integrate
Demand on governance,
Significant
Climate
Change and
Community
Sustainable Finance Engagement
Employee
Environmental Impact
Stakeholder needs
Development
and Wellbeing
Sustainability
Pillars
Championing thriving communities The Bank sets aside one percent (1%) of profit after
(community investments) tax to holistically address the diverse challenges
faced by communities. In 2023, the Bank allocated
The Bank’s Corporate Social Investment (CSI) TZS 4.2 billion to implement its CSI initiatives,
Strategy is being implemented to ensure the focusing on thematic areas of education, health,
generation of shared value and inclusive growth financial capability, and disaster recovery. The
with a dedicated focus on promoting and advancing agenda intends to create value and positive socio-
socio-economic development within the Tanzanian economic and business impact.
community. The Bank has committed to making
positive contributions to society and maintaining an Nuru Yangu Scholarship
inspired stance that aligns with the United Nations’
Following completion of the selection process,
Sustainable Development Goals (SDGs) and the
the first cohort of beneficiaries were identified for
2025 Tanzania Vision.
the program, comprising 65 registered students.
The program is now in the process of selecting its
CSI Spend (TZS Billions) second cohort of students, which is expected to
comprise 65 students, bringing the total number
2023 4.2
of sponsored students to 130. Currently, the on-
2022 2.9 boarding process of the scholarship awardees is at
final stages. Once students have been on-boarded,
2021 2.1
payments are made to cover their tuition, direct,
accommodation and allowance costs, of which
approximately TZS 436 million has been spent.
Testimonial
In my pursuit of higher education, the NMB Nuru Yangu Scholarship Program has
been a beacon of hope amidst financial uncertainty. As a second-year student at
Mzumbe University, studying Accounting and Finance, I am immensely grateful
for the transformative impact this scholarship has had on my academic journey.
I first learned about the scholarship during a time of personal hardship, and the
prospect of joining university seemed uncertain. Thanks to the timely intervention
of a friend who informed me about the NMB advert, I was able to apply and
secure the scholarship just days before the deadline.
Status Report
Equal opportunity for all.
Creating a positive, diverse, We have made progress on gender Best Employer of the Year 2023,
and productive workforce parity as of December 2023. Female Runner-Up in the overall winner
staff at NMB accounted for 48% of category
total full-time employees, and 49% of
total staff include fixed-term staff. Best Private Sector Employer 2023,
Runner-up
25% of Top Executive Committee
positions are held by women Quality, Productivity, and Innovation
while Women hold 32% of Senior Award
Management positions and 30%
of other managerial control lines Best Employer - Gender Equality and
positions. Equity Award
Sustainable
Financing
(Responsible
Banking)
We deliver products and Our Approach
services that promote NMB Bank is on a significant change journey to
sustainable development integrate sustainability in all functions and business
and conduct our banking areas. Promoting businesses and innovations with
sustainability considerations as a core facet of our
business with a greater organization purpose and focus is a priority in our
sense of responsibility to the investment and lending policies and guidelines. The
environment that we operate Bank’s Sustainable Financing Framework, which
was approved in 2023, represents a further step in
in, and the communities that
our effort to incorporate environmental and social
surround us. considerations in our operations.
NMB’s Sustainable Financing Framework: Under this framework, NMB may issue 3 types of
instruments:
This framework which is now in operation aims
to provide a foundation under which the Bank • Green bonds/loans etc. where an amount
can execute and, where applicable, list green, equal to the net proceeds will be exclusively
social and/or sustainable liabilities (sustainable used to finance and/or refinance eligible loans
instruments) including, but not limited to, bonds, falling within the Eligible Green criteria,
loans, and deposits. NMB’s sustainable instruments
• Social bonds/loans etc. where an amount
offer investors an opportunity to invest in assets that
equal to the net proceeds will be exclusively
create positive environmental and social impact in
used to finance and/or refinance eligible loans
Tanzania.
falling within the Eligible Social criteria,
The framework is aligned with international best
• Sustainability bonds/loans etc. where an
practice and guidance issued by the International
amount equal to the net proceeds will be
Capital Markets Association (ICMA) and Loan
exclusively used to finance and/or refinance
Markets Association (LMA), namely:
eligible loans falling within both Eligible Green
• Green Bond Principles (GBP) 2021 and Social criteria.
• Social Bond Principles (SBP) 2023
• Sustainability Bond Guidelines (SBG) 2021
• Green Loan Principles (GLP) 2023
• Social Loan Principles (SLP) 2023
Status Report
Initiatives/ Programme Additionality & Impact
Signed financing contracts/ The aim is to enhance access to finance for SMEs, Midcaps, and Co-operatives
agreements with EIB worth across various eligible sectors, focusing on the blue economy and businesses
EUR 100M for gender and blue managed or owned by women, thus promoting gender equality and women’s
facilities in February 2023 economic empowerment.
• Furthermore, the proceeds address gender gaps in finance SMEs and support
women’s inclusion and position in supply chains, including the blue economy.
Signed a senior loan of up to The loan helped the Bank meet the COVID-19-related working capital and trade-
US$100 million with a tenor of related needs of its clients, all of which are small and medium enterprises (SMEs).
2-year renewable for one more
year with International Finance • The loan provides additional liquidity support amidst prevailing global economic
Corporation (IFC), under headwinds to meet the post-COVID-19 related working capital and trade-related
needs of NMB clients, many of which are SMEs.
the COVID-19 Emergency
Response WCS Envelope
• Working capital and trade finance loans to SMEs expedited post-crisis recovery.
(WCS Envelope)
Issued and Listed Jamii The landmark transaction marks NMB’s first Sustainability Bond under its current TZS
Bond in Q3 2023, being the 1 trillion Medium-Term Note, following the global award winning, TZS denominated
1st tranche under the newly debut Social Bond (Gender issuance) issued in 2021 under the previous Medium-
approved MTN Programme. Term Note. The issuance of this sustainable bond further reinforces the position of
NMB Bank as the market leader and a true pioneer in sustainability. The net proceeds
This is the first Sustainability of the Jamii bond will be used to finance activities that align to the Bank’s updated
Bond in the East African Sustainability Financing Framework
Region with a total subscription
amount of TZS 400B. The • The TZS 400 billion raised from the Jamii bond, which matures in 2025 and was
bond had a TZS and USD eight times oversubscribed, will be used to support projects that create positive
social, economic, and environmental benefits as aligned to selected SDG targets.
series, making it the first
These could include green projects, Renewable energy, Gender, Education,
domestic bond in Tanzania to
affordable housing.
be issued and listed in foreign
currency. • The issuance of Jamii Bond is a testament of NMB’s longstanding commitment
to sustainable development and its ambition to play a leading role in sustainable
finance.
Initiatives
• Women Proposition: We launched a unique
Women Proposition, dubbed NMB Jasiri Women
Proposition in 2020. The Jasiri Program/
Initiative with the main objective of Drive
Economic Empowerment of women through
creation of a unique market proposition for
women.
• A total of TZS 20 Bn ($7.9 Mil )has been set • We also opened 4 new branches and
aside for supporting Government’s Building relocated 2 branches.
Better Tomorrow agriculture program for youth
and women.
Definitions
Women-owned business:
Women owned business is considered by:
- Ownership - more than 51%
- Management - 20-30% women in management position
- Staff composition - employs 30% or more women
- At times - product/service impact
Dedicated team/unit focused on The team seats under Retail Products, Pricing and Insights.
women retail banking
Products specifically designed for the The following products are specifically
low-income retail segment
• NMB Pesa (Mobile Based account)
• Micro savings wallets: Spend 2 save
• Group account - Pamoja account
• Loans:
• Mshiko Fasta (Micro digital loan)
• Fanikiwa Loan
• Machinga loans
Dedicated products/services The following products have preferential features such as rate and
customized for women in the retail requirements for women:
segment
• Jasiri Loans
• Special rate Fanikiwa Loans
products specifically for low-income The following products are specifically for low-income businesses:
business traders / microenterprises
• Chap chap Fanikiwa account
• Fanikiwa account
• Fanikiwa Loans
• Machinga Loans
Our Board
of Directors
Appointed on 5th June 2020 Appointed on 5th June 2020 Appointed on 15th June 2019
Re-appointed on 2nd June 2023 Re-appointed on 2nd June 2023 Re-appointed on 3rd June 2022
Appointed on 15th June 2019. Appointed on 15th June 2021 Appointed on 3rd June 2022
Re-appointed on 3rd June 2022
Age Independence
60+ years
(37.5%) Non Executive
- Independent
Director
40-49
years
54
Average Age
38%
Independence
(37.5%)
Non Executive
50-59 years Director
(25%)
40-49 years 50-59 years 60+ years Non Executive - Independent Non Executive
Director Director
Tenure Nationality
Ugandan (1)
Above 5 0-2 years
years (2) (3)
3
Dutch (1)
Average
Tenure
75% Tanzanian
Number of Board
Committee Meetings 41
2022: 45
Board Committee
Atendance 99.5%
2022: 89.3%
The Board is satisfied that the The Board is satisfied that it The Board believes
delegation of authority framework has fulfilled its responsibilities in arrangements for accessing
contributes to role clarity and the accordance with its charter for professional services are
effective exercise of authority and the period. effective.
responsibilities.
< Delegation
Board
Accountability >
Bank
Chief Independent
Executive Oversight, assurance Assurance
Officer Delegation
and reporting
Board Committees
All Board committees are satisfied that they have fulfilled their
responsibilities in accordance with their respective charters for the
reporting period.
Executive Committee
Committee 2023 focus area and material decision 2024 focus area
Board Executive • Reviewed and approved policies. • Integrating the ESG strategy within the
Committee (BEC) Bank; developing the various climate-related
• The Board continued to oversee the bank’s standards; and achieving substantial
governance, smooth operation, and oversight. and tangible results towards the Bank’s
sustainability commitments.
• Received updates on the bank’s performance,
including business-level performance updates. • Board effectiveness actions evaluations.
• Reviewed and approved rebased Medium-Term • Board composition (to achieve optimal
Plan. composition in terms of the number of
members, respective skillsets, and gender)
• Regulatory relations (top-of-mind matters, fines
Juma Kisaame and succession planning.
and penalties, and regulatory commitments and
Non-Executive relationships) • Executive management succession planning
Board Human • Appointments and progress of on-going key • Attracting and retaining top talent, scarce
Resource and recruitments (senior and middle management and critical skills, and mitigating the impact
vacancies) of increased sectoral competition for local
Remuneration talent.
Committee (BHRRC) • Extending participation in our long-term
incentive arrangements to increase coverage • Fair and responsible remuneration in the
for scarce and critical skills and align with peers’ context of fair pay practices and evolving
market practices. market dynamics.
• Taking additional steps in fair and responsible • Ongoing evaluation of the impact of our
pay, predominantly regarding fixed remuneration evolving remuneration frameworks and their
increases and short-term incentive allocation outcomes ensure that they remain locally
for frontliners, as well as addressing pay relevant and competitive and effectively
differentials. balance stakeholder interests.
George Mandepo
Non-Executive • The Board approved exponential training budget
growth to further accelerate the upskilling
agenda for the bank.
Committee 2023 focus area and material decision 2024 focus area
Board Credit • Discussed and approved Risk Appetite and • The Bank’s loans and advances growth
Committee (BCC) Sectoral Limits. in the context of concentration risks and
exposures, in particular to the higher risk
• Reviewed, and approved credit portfolio sectors of the economies.
strategies.
• Close monitoring of the sectors affecting
• The Committee continues to monitor the our ESG ambitions and targets regarding
credit risk exposure, sector, and single name gross loans, losses, returns, and emissions
concentration of the corporate loan book. management.
Board Audit, Risk • Receive internal and external Audit reports and • Internal capital adequacy assessment
and Compliance oversight to management on improving control process (ICAAP)
enviroment.
Committee (BARCC) • Internal liquidity adequacy assessment
• Liquidity simulation (with the participation of process (ILAAP)
ExCo) and assess capital adequacy.
• The macroeconomic environment, including
• Evaluated risk appetite and principal risk economic recovery, headwinds and volatility,
profiles. and customer stress to assess possible
impacts on the Bank’s risk appetite.
• Deep dives into market and liquidity risks
including FX liquidity and overall impact to • Processes for screening sensitive and ESG
clients and the business. financing transactions.
Note: This is a summarization of key committee activities; detailed highlights can be found on Those Charged with
Governance Report.
Finance (Analysis
Credit & reporting)
Risk Strategic
Management Planning 8 6
8 8
Sustainability
(Climate Change Human
and Environmental) Resources/
Accounting Compensation
4
3 3
2 Effectiveness
evaluation
of the Bank of Tanzania Corporate Governance
Regulations 2021, undergo a comprehensive
evaluation periodically to assess the effectiveness
of the Board, its committees and its members.
3
Evaluation of individual director performance is
Peer to Peer
carried out by an Independent External evaluator
evaluation
in one-one-one discussions with each Board
member.
92%
• Team player
• Strategic alignment and the 2023
The Board Committees are
evaluated on effectiveness in Board mandate
discharging their responsibilities, • Diligence and commitment
diligence, and responsiveness
to the Board. Additionally, the
Key Findings:
Committees self-evaluate on
annual basis their abilities to The Board performed very well
carry out the responsibilities set in the overall evaluation based
out in their respective Terms of on responses received from the
Reference. questionnaires for evaluating Board
effectiveness.
In 2023, the Board engaged
KPMG East Africa, an Overall, the Board has shown
independent external
evaluator, to conduct the Board
resilience, through facing and
confronting complex issues. The
2022 88%
performance and evaluation Board sub-committees are an
with the Company secretary effective element of the overall
overseeing the process and the oversight and governance framework.
BHRRC providing guidance.
The Board has been proactive in
The evaluation process took the addressing the areas of improvement
form of a series of questions identified in the previous assessment.
that allowed the Board to review
There is a solid relationship of
its effectiveness in 2023, with
mutual respect and trust between
the opportunity to provide free
Board members that enable
text comments or observations
robust interactions. The executive
throughout the questionnaire.
management team is appropriately
82%
The evaluation also focused
empowered to execute the strategy,
on the Board’s effectiveness in 2021
with the Board playing an oversight
overseeing new and emerging
role.
themes and the bank’s strategic
priorities. The chairman is a team player,
and has ability to unite the Board
members to a common purpose
for the achievement of the bank’s
strategy.
Appointed on 18th August 2020 Appointed on 12th March 2021 Appointed on 01st June 2019
Appointed on 17th Febrary 2020 Appointed on 27th August 2011 Appointed on 01st June 2019
Appointed on 13th December 2023 Appointed on 06th August 2020 Appointed on 01st November 2021
*Nishad Jinah was appointed Acting Chief Credit, succeeding Daniel Mbotto, effective from December 2023.
Tenure
on ExCo
Appointed on 12th September 2022 Appointed on 03th October 2022 0-3 years 4-6 years +6 years
17%
Tenure
at NMB
25%
2023 focus areas
Diversity
• Execution of key strategic initiatives in line with our MTP
• Making sound investment choices in critical strategic areas 75%
• Enhancing our risk management and governance framework
• Advancing the bank’s sustainability agenda
Male Female
• Investing and empowering our people to create a fit for
purpose and fit for growth organization.
• Expand and deepen our customer offerings in line with our
‘customer first commitment.
“NMB Bank presents its • NMB Bank conducts rigorous stress testing
Integrated Annual Report exercises and internal projections to assess
our resilience to adverse scenarios. These
for the year ended 2023, assessments, covering profitability, capital
highlighting our commitment adequacy, and liquidity, form the foundation of
to transparency, resilience, and our viability assessment and strategic decision-
making process.
long-term sustainability. In line
with regulatory requirements • We continuously monitor and manage
principal risks, including geopolitical
and best practices in corporate
tensions, macroeconomic uncertainties,
governance, we provide a digitalization, technological advancements, and
comprehensive assessment of environmental, social, and governance (ESG)
our long-term viability and ability risks. Implementing robust mitigation strategies
safeguards our long-term viability and ensures
to operate as a going concern.” prudent risk management. (see page 190, 213-
222)
NMB
NMBIntegrated
IntegratedAnnual
AnnualReport 2023 || 158
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159 | NMB Integrated Annual Report 2023
Risk
Report
Risk
Update Loan Book Quality
Our loan book remained resilient, and our Non-
Doreen Joseph performing loan ratio, asset quality, value at risk
Chief Risk Officer and loan provision coverage ratios were at healthy
levels. We safeguarded our asset quality with
robust risk controls and measures. We adopted a
risk-based approach to focus on high-risk sectors,
tightened credit lending criteria, intensified portfolio
reviews and stress tests on sectors and targeted
portfolios.
• Risk appetite: Performing an impact analysis to • Establishing the risk appetite and risk capacity
confirm that growth plans and strategic initiatives framework of the Bank.
are within the Board Approved Risk Appetite. • Approving a risk-management policy consistent
• Stress Testing: Utilizing the outcomes of the with the risk-appetite framework, including the
risk identification process to develop scenarios establishment of risk limits in the various areas
for stress tests, and using the results of stress of activity and main risk areas.
tests to recommend strategic actions. • Providing clear guidance to senior management
with regard to risk management, based on the
Risk Governance recommendations of the executive committee,
headed by the CEO, and ensuring that senior
Ultimate responsibility for setting our risk appetite management takes the necessary actions in
and for the effective management of risk rests with order to identify, measure, monitor, and control
the Board. risks.
NMB Integrated Annual Report 2023 | 164
• Approving methodologies for risk assessment and control, and for the allocation of capital in respect of
risks.
• Supervising and monitoring the implementation of the established risk- management policy; examining
the Bank’s actual risk profile and examining the processes and actions that the Bank must apply to
comply with all regulatory directives concerning risk management.
CEO
Management Committees
Executive Management Committee
Management Legal Committee
Assets and Liabilities Committee
Management Tender Committee
Disciplinary Appeals Committee
Product Approval Committee
Customer Experience Management Committee
Corporate Social Responsibility Committee
Project Management Committee
Risk and Compliance Management Committee
Wholesale Credit Committee
Retail Credit Committee
Management Audit, Risk and Compliance Committee
Loan Portfolio Quality Committee
Risk &
Business Support Control Internal
Segments Functions Functions Audit
2. Second line of Defence: this comprises the Risk Control Owners, supported by their respective control
functions. Risk Control Owners are responsible for ensuring that the risks within the scope of their
responsibilities remain within appetite. The scope of a Risk Control Owner’s responsibilities is defined by
a given Risk Type and the risk management processes around that Risk Type.
3. Third line of Defence: the independent assurance provided by the Internal Audit (IA) function. Its role is
defined and overseen by the Board Audit, Risk and Compliance Committee.
Management Committees
Executive Management Committees As the overall executive body regarding strategy, performance,
and risk matters. From a risk perspective the Executive Committee
oversees NMB’s risk management and control environment.
Each of the committees reports to the Executive Committee, individually and collectively they serve as
executive forums to discuss and implement NMB’ s risk management.
• Oversee NMB’s risk management infrastructure, which includes frameworks, decision criteria,
authorities, people, policies, standards, processes, information, and systems.
• Approve risk policies and procedures, stress testing scenarios (including macroeconmic variable
projection) and the evaluation and endorsement of risk models.
• Oversees new product approvals, assessing risks and their mitigating risk within the Bank and
the appropriate systems to monitor and manage the resulting risks.
• Achieve sustainable and stable profits within a framework of acceptable financial risks and
controls and to maximize the value generated from active management of balance sheet and
financial risks, within agreed risk parameters.
Risk appetite is an expression of the amount of Stress testing and scenario analysis are used to
risk we are willing to take in pursuit of our strategic assess the financial and management capability
objectives, reflecting our capacity to sustain losses of the bank to continue operating effectively under
and continue to meet our obligations arising from a extreme but plausible operating conditions. Such
range of different stress trading conditions. conditions may arise from economic, regulatory,
legal, political, environmental, and social factors.
Our Risk Appetite is set by the Board and governed
by the Risk Appetite Statement. This seeks to Our stress testing framework is designed to:
reinforce our risk culture and provide clarity on
• Contribute to the setting and monitoring of risk
the risks that we are willing to accept. A robust
appetite.
organizational risk and governance culture, helps us
to further embed our Risk Appetite. We define our • Identify key risks to our strategy, financial
risk appetite in terms of both volatility of earnings position, and reputation.
and the maintenance of adequate regulatory
capital requirements under stress scenarios. We • Support the development of mitigating actions
also define a risk appetite with respect to liquidity and contingency plans.
risk, operational risk, and reputational risk. Our • Ensure effective governance, processes and
quantitative risk profile is assessed through a systems are in place to co-ordinate and integrate
bottom-up analytical approach covering all of major stress testing.
businesses and products. It is also assessed against
a range of exposure concentration thresholds. • Ensure adherence to regulatory requirements.
The bank’s risk appetite statement is approved by Our stress testing activity focuses on the potential
the Board and forms the basis for establishing the impact of macroeconomic, geopolitical, and physical
risk parameters within which the businesses must events on relevant customer segments, product lines
operate, including policies, concentration limits and and asset classes.
business mix. We will not compromise adherence to
our risk appetite in order to pursue revenue growth
or higher returns. NMB Bank’s Risk Culture and Code of
Conduct:
All NMB Bank’s staff must attest to the Bank’s
Stress Testing
Code of Conduct, and comply with all frameworks,
Stress testing is an integral part of NMB’s risk policies, and standards applicable to their roles. The
management processes and is used to evaluate the Code of Conduct outlines the purpose and values
Bank’s potential vulnerability to certain unlikely but which govern our way of working. It constitutes a
plausible events or movements in financial variables. reference point covering the aspects of colleagues’
It includes both sensitivity analysis and scenario working relationships, with other NMB employees,
analysis and is conducted regularly. Additional stress customers and clients, governments and regulators,
tests are carried out in response to microeconomic business partners, suppliers, competitors, and the
and macroeconomic conditions or portfolio
developments. Every stress test is documented, and
NMB Bank PLC is committed to maintaining a Each of the principal risks is overseen by an
robust risk culture in which: accountable executive within the Bank who
is responsible for the framework, policies and
• Management expect, model, and reward
standards that detail the related requirements.
the right behaviors from a risk and control
Risk reports to executive and Board committees
perspective.
are clearly organised by principal risk. In addition,
• Staff identify, manage, and escalate risk and certain risks span more than one principal risk;
control matters, and meet their responsibilities these are also subject to the ERMF and are
around risk management. reported to executive and Board committees namely
reputational risk.
• Specifically, all NMB Bank’s employees
regardless of their positions, functions or
locations must play their part in the Bank’s risk
management. All employees are required to be
familiar with risk management policies which are
relevant to their responsibilities, know how to
escalate actual or potential risk issues, and have
a role-appropriate level of awareness of the risk
management process as defined by the ERMF.
Credit Risk Potential for financial loss due • Credit risk is managed through a Accountable executives:
to the failure of a customer to deep analysis and understanding of
Chief Credit Office
meet the agreed obligations our corporate customers’ business
activities, risks, returns and needs Chief Risk Officer
to pay the Bank. This also
together with the industry and Chief Retail Banking
includes concentration risk
economy in which they operate.
(large exposure to specific Chief Wholesale Banking
client groups, sectors, or • We apply a set of criteria and
policies to lending.
geographies) and decreases
in credit quality. • We have established risk appetite Accountable Committees
per sector, assigned credit ratings
Board Committees
and set lending limits. Risk appetite
statements are set and approved by • BARCC
the Board. • BCC
• We use our internally built Risk Management Committees
rating models using Bank’s loss
• RCC
data to assign Rating for Corporate
and Higher end Retail Portfolios. • LPQ
Market Risk The risk of loss arising from • We apply a set of market Risk Accountable executives:
potential adverse changes in policies to obtain the best balance
Treasurer
the value of the NMB’s assets of risk and return whilst meeting
customers’ requirements. Chief Risk Officer
and liabilities from fluctuation
in market variables including, • We actively manage our liquidity
but not limited to, interest and funding base to ensure that the
Accountable Committees
rates, foreign exchange, Bank always has sufficient liquidity
to meet its liabilities when due, under Board Committees
equity prices, commodity
both normal and stressed conditions, • BARCC
prices, credit spreads,
without incurring unacceptable
implied volatilities, and asset Management Committees
losses or risking damage to bank’s
correlations. • ALCO
reputation.
Primary categories of Market • We control our Treasury Banking • RCC
risks are Liquidity Risk, activities to ensure that losses related
Interest Rate Risk, Currency to market risk do not cause material
Risk, and Capital Risk. Impact to the Bank.
• The Bank’s Treasury Policy sets our
overall approach towards market risk
management. Treasury Policy consist
of Guidelines that provides more
details on each market Risk type and
set overall approaches, Standards
and Controls governing Market Risk
Stress Testing within NMB Bank.
• We measure the risk of losses
arising from future potential adverse
movements in market rates, prices
and volatilities using the VaR
methodology.
• Robust Internal Controls, processes
and systems which are reviewed
regularly have been assigned and
implemented to support our Risk
Management Approach.
Operational Risks The potential risk of loss • Operational risks can arise from Accountable executives:
arising from inadequate or all business lines and all activities
Chief Risk Officer
failed internal processes, carried out by the Bank. We seek to
systems and technology, poor systematically identify and manage
operational risk by segmenting all our Accountable Committees
management, human error, or
activities into manageable units.
external events. Board Committees
• Each unit undertakes self-risk
Operational Risk subtypes • BARCC
control assessments regularly by
includes Process failure,
evaluating the effectiveness of its risk Management Committees
External rules and and control environment, including
• RCC
Regulations, Liability, Legal compliance with legal and regulatory
enforceability, Damage to requirements.
Assets, Safety and Security, • Each unit conducts a Key risk
Internal Crime or Dishonest indicators assessment conducted to
and External Financial Crimes detect early warning signals and drive
appropriate management actions
before the risks materialise.
• We manage operational risk by
ensuring accountability and ownership
across the Bank.
• We have adopted five levels of
operational risk severity ratings
— insignificant, Minor, Moderate,
Major and Catastrophic —The Bank
mitigates these risks at all times,
balancing the cost of maintaining
a controlled environment against
the impact and likelihood of a risk
occurring.
• We monitor the stability of our
systems, the effectiveness of
business continuity planning and
disaster recovery to ensure the level
of service we offer customers, and
regulators’ expectations are never
compromised.
Climate Risk The potential adverse • We have developed a new Climate Accountable executives:
effects that climate change Risk Management Policy in line with
Chief Risk Officer
and the transition to a low- the Bank of Tanzania guidelines.
carbon economy can have The policy assigns clear roles and
responsibilities for managing climate- Accountable Committees
on financial institutions,
related financial risks, establishes
businesses, and investment Board Committees
lines of authority, and requires that
portfolios.
material risks are embedded into • BARCC
policies, processes, and controls.
• BCC
• A comprehensive NMB Climate
Management Committees
Risk Management Policy has been
developed to effectively manage • RCC
climate-related risks. This policy • LPQ
serves as a guiding document for
decision-making, ensuring strict
adherence to the provided guidelines.
• We have reviewed our Stress testing
policy to integrate climate-related
risks.
Technological The potential for technology- • The bank has adequate oversight Accountable executives:
Risk related events or issues of technology risks at the Senior
Chief Risk Officer
to harm the bank’s ability Management and Board of
to achieve its objectives. It Directors levels through governance
committees such as the Risk and Accountable Committees
encompasses a wide range
Compliance Committee, Executive
of potential challenges and Board Committees
Committee as well as Board, Audit,
uncertainties that can arise in
Risk and Compliance Committee. • BARCC
the context of technology use
• The bank manages technology risks Management Committees
and application.
through adequate implementation of
• RCC
technology risk policies that address
all key areas of cybersecurity, vendor
risk, IT operations, and third-party
risks.
Economic Risk NMB Bank is exposed to Tanzania and Global economic and political risks, including Foreign-
currency liquidity challenges and a rising interest rate environment. These risks could impact
customer resilience and funding affordability. The outlook for the Tanzania economy remains
relatively stable. However, it may be affected by Global development, including falling economic
activity in developed markets and China, a high inflation environment, rising interest rates across
developed markets, elevated energy prices, and developing and emerging Geopolitical conflicts.
These risks are monitored closely with strategic plans adapted as appropriate.
We conduct stress tests on possible scenarios to forecast impact of certain market risks on our
performance, and ensure we take correct mitigating actions.
Regulatory Risk Future changes in economic policies, laws and regulations may have an impact on the bank’s
strategy. These changes could also affect the volatility and liquidity of financial markets, and more
generally the way we conduct business and manage capital and liquidity. The evolving regulatory
and reporting landscape – including Basel reforms, overhaul of accounting standards, financial crime
risks (encompassing money laundering and sanction risks), emerging privacy, cyber security, and
conduct legislation – may affect our business model and give rise to compliance risks.
The Bank implements new regulatory requirements and incorporates the implications of related
changes in its strategic and financial plans. Also, we continue to work with regulators to ensure the
Bank meets all obligations
Cyber attacks The prevalent threat of cyber-attacks on financial institutions remains one of our top concerns. NMB
operates a multi-layered approach to its defences and continues to invest significant resources in
developing cyber security controls and capabilities designed to minimise the potential effect of cyber-
attacks.
Climate related Risk Climate Change poses increasing serious threats to the global economy. Transition to a low carbon
economy may entail extensive policy, legal, technology and market changes which can give rise to
credit, Operational and reputational risks. We have embedded climate risk into our risk framework,
and adapting NMB Bank’s operations and business strategy to address the risks aligns with our
Sustainability strategy and Medium-term plan.
Competitive Environment NMB Bank operates in highly competitive markets, raising the threat of a loss of market share and
reduced revenue and profitability. The risks mainly relate to changes in regulation, developments in
financial technology, new entrants to the market and shifts in customer behavior. The Bank closely
monitors the competitive environment and adapts strategy as appropriate to deliver innovative and
compelling propositions for customers.
Data stewardship NMB Bank relies on the effective use of accurate data to support operations and deliver its strategy.
Failure to produce high-quality data and the misuse, incomplete, non-protected or absence of such
data could result in a significant risk to implementing the Bank’s strategy, including reducing costs,
and meeting customer expectations. The Bank has a comprehensive framework of control in place to
manage and mitigate data risks, with continued investment into data management capabilities.
Fraud Risk The risk of fraud and other criminal activities is growing as criminals become more sophisticated
and as they take advantage of the increasing use of technology in society. Controls are embedded
in our policies and procedures across a wide range of the Bank’s activities, such as Origination,
recruitment, physical and information security.
ICT System Resilience NMB Bank continues to invest in Digital and Information technology infrastructure to prevent
customer service disruption, which could result in financial, reputational, and regulatory damage. We
have invested more in our digital and technology capabilities to mitigate these risks and minimise
service disruption.
Change Risk Implementing NMB Bank’s Medium-Term Plan and focusing on transformation can result in
heightened execution, operational, and people risks. NMB continues to manage and implement
change per its Medium-term plans while assessing implementation risks and taking appropriate
mitigating action. Furthermore, the Bank continues to monitor and strengthen its control environment
through robust governance and control frameworks. Managing change sustainably, efficiently, and
agilely is a priority for the Bank.
Geopolitical Events We face a risk that escalating Geopolitical events or conflicts could further impact trade flows, exert
further inflationary pressures, and impact some of our clients’ ability to pay their obligations. We
actively monitor the global political situations and conduct regular stress test of impact of such events
on our portfolios, which inform assessments of risk appetite and any need to take mitigating actions.
People Risk NMB’s success depends on its ability to attract, retain, and develop highly skilled, qualified, and
highly performing personnel despite a highly competitive labour market and internal cost reduction
pressures. Detailed resource planning and close monitoring of staff well-being and attrition levels,
including industry benchmarks. We have introduced our “Employee proposition” to help support
colleagues and strengthen our proposition in the market.
Reputational Risk The risk that the bank’s reputation is damaged by one or more reputational events and causes a
negative publicity to NMB’s business, products, practices, staff and/or financial condition. This kind of
publicity whether true or not, may impair the public and market confidence of NMB and may result in
costly litigation, decline in customer base, business or revenue.
Statement of Directors’
responsibilities 265
DIRECTORS
Name Remarks
Dr. Edwin P. Mhede Chairman
Benson Mahenya Independent Non-Executive Director
Hendrik Reisinger Non-Executive Director
Juma Kisaame Non-Executive Director
George Mandepo Non-Executive Director
Clement Mwinuka Independent Non-Executive Director
Ramadhani Mwikalo Independent Non-Executive Director
Aziz Dachi Non-Executive Director
Name Remarks
Juma Kisaame Chairman
Dr. Edwin P. Mhede Member
Ramadhani Mwikalo Member
Name Remarks
Clement Mwinuka Chairman
Aziz Dachi Member
Benson Mahenya Member
Name Remarks
George Mandepo Chairman
Ramadhani Mwikalo Member
Hendrik Reisinger Member
Name Remarks
Hendrik Reisinger Chairman
Juma Kisaame Member
George Mandepo Member
1 INTRODUCTION
Those charged with governance, the Board of Directors (the “Directors”), are honoured and have the
pleasure to submit their report and the audited financial statements for the year ended 31 December
2023, which discloses the state of affairs of NMB Bank Plc (the “Bank” or “NMB” or “Entity”) and its
subsidiary, Upanga Joint Venture Company Limited (“UJVC”) together hereinafter referred to as, the
“Group”.
This report has been prepared in compliance with the revised TFRS 1: The Report by Those Charged
with Governance issued by the Tanzania’s National Board of Accountants and Auditors (NBAA), effective
on 1 January 2021.
2 INCORPORATION
The Bank is incorporated in Tanzania under The Companies Act, Cap 212 (as amended), as a public
company limited by shares with the International Securities Identification Number (ISIN) TZ1996100222.
The Bank was established in 1997 and listed on the Dar es Salaam Stock Exchange (DSE) in 2008.
3 VISION
4 MISSION
To be the Bank of choice, delivering an innovative and transformative customer experience that promotes
financial inclusion and wellbeing.
5 ENTITY OPERATIONS
NMB is a fully-fledged commercial bank incorporated in the United Republic of Tanzania and licensed
under the Banking and Financial Institutions Act, 2006 to conduct banking business in Tanzania. The
Bank is regulated by the Bank of Tanzania (BoT) and is subject to the provisions of the Banking and
Financial Institutions Act, 2006 and its regulations.
The Bank is a Public Company limited by shares that were incorporated in the United Republic of Tanzania
in 1997 under the Companies Act, Cap 212 (as amended) and was listed on the Dar es Salaam Stock
exchange (DSE) in 2008, under the ticker symbol NMB.
The Bank takes customer deposits, provides credit facilities, and offers other commercial banking services
and related financial solutions. Through its three main business divisions, Retail, Wholesale and Treasury,
NMB provides a suite of financial services and products to retail customers, farmers, industrialists, small
businesses, corporations, institutions, and the Government. As of 31 December 2023, the Bank has 231
branches, 715 ATMs, 54 cash collection points (CCPs), 2 stand-alone Bureau de Change outlets and
28,295 active agents nationwide.
The Bank’s subsidiary, Upanga Joint Venture Company Limited (UJVC), specializes in property
development and leasing to potential tenants.
6 EMPLOYEES’ WELFARE
Gender Parity
As of 31 December 2023, the Bank had 3,642 employees (in comparison of 3,544 employees in 2022),
out of which 52% were male and 48% were female. The Bank’s Diversity and Inclusion (D&I) policy
continues to drive the diversity, equity, and inclusion agenda. Gender diversity in the total workforce
composition of NMB from 2019 to 2023 is provided in the table below:
Key Employee Figures 2023 2022 2021 2020 2019
Total Employees 3,642 3,544 3,482 3,465 3,450
Total % of Women 48% 48% 48% 48% 47%
The employee relations landscape across the bank’s network has remained very stable, as evidenced
by the healthy working relations between management and trade unions with regular interactions and
engagements between the parties.
Employee engagement continues to be a strategic focus for the bank due to its direct impact on
productivity, quality of service embodied in customer satisfaction, and overall business success. The
Bank leverages on various initiatives geared towards driving engagement. These initiatives include
SIKIKA Forums (quarterly employee engagement forum with key management personnel), Quarterly
CEO Townhall Meetings, an open-door policy, engagement through Human Resources champions, and
ExCo Zonal Mentorships.
The Bank remains steadfast in its vision of being the employer of choice in Tanzania by attracting and
retaining best talents in the market. In this spirit, NMB is committed to policies, standards and practices
that provide equality of opportunity for all, protect the dignity of employees, and promote an environment
that fosters innovation and growth.
Performance Management
NMB’s robust performance management system integrates regular feedback sessions and goal-setting
exercises. The Bank’s inclusive performance management stems from the bottom-up approach as
evidenced by 99% of employees who actively participated in performance reviews, fostering a culture of
continuous improvement and accountability.
Training
The Bank allocated TZS 5.3 billion in 2023 for staff training, representing an 8% increase from the previous
year (2022), to enhance the much-needed employees’ technical skills and overall performance. A total of
227 training programs were conducted, with an average of 2 trainings per staff member and an average
of 28 staff members participating in each program. Training programs have been and are continually
being developed to ensure employees are adequately trained at all levels. All employees have an annual
training plan to upgrade skills and enhance development.
Medical Assistance
All staff and their dependents (spouses and up to four children) are provided with medical services by the
bank through an external service provider. Staff’s parents and their in-laws are included under medical
insurance with the current external service provider.
NMB is an equal-opportunity employer, and we hire based on merit, competencies, and organizational fit,
regardless of gender, ethnicity, background, or physical attributes.
The Bank gives equal opportunities to all and creates a conducive working environment where individuals
are respected, supported, empowered, and included. The Bank’s commitment to diversity and equal
opportunity is covered through its Diversity and Inclusion Policy which seeks to promote diversity and an
inclusive culture within the organization.
Currently, females represent over 48% of the bank’s workforce and 31% of all leadership roles. While
there is more work to be done, these figures represent good progress along the Bank’s efforts in ensuring
equitable representation of women across the organization.
In recognition of the Bank’s commitment to gender equality, in October 2022, NMB became the first
financial institution in Africa to gain workplace gender equality certification using a global assessment
methodology, the Economic Dividends for Gender Equality (EDGE).
Loans are available to all confirmed employees depending on the eligibility assessment per the bank’s
policies. Loans provided to employees include personal loans, vehicle loans, mortgage loans, and other
advances. Below is a summary of total staff loans outstanding balance in 2023 and 2022:
TZS’ Millions TZS’ Millions %
2023 2022 Change
General Staff loan 285,358 245,981 16%
Staff Mortgage Loan 12,953 8,767 48%
Staff Car Loan 2,333 1,715 36%
Staff Annual Loan 171 189 -10%
IPF Loans 92 122 -25%
Prepaid House allowance 1,263 1,244 2%
Total 302,170 258,018 17%
Physically-Challenged Persons
Applications for employment by physically-challenged persons are always considered, bearing in mind
the aptitude of the applicant concerned. In the event of staff members becoming physically-challenged
persons, every effort is made to ensure that their employment with the bank continues, and appropriate
training is arranged. The Bank’s policy is that training, career development and promotion of physically-
challenged persons should, as far as possible, be identical to that of other employees.
The Bank is obligated to make mandatory contributions to publicly administered pension plans, which are
considered well-defined contribution plans. Various pension legislations and regulations determines these
plans. For example, PSSSF offers employee pension plans, where a pension allowance contribution of
20% is made. NMB has made a deliberate decision to support staff under this person scheme where
employees contribute only 5% and the bank contributes 15% of the basic salary. The financial statements,
note 16, reveals that a total of TZS 21 billion was paid under pension plans for the year 2023 (2022: TZS
19 billion).
NMB Integrated Annual Report 2023 | 184
NMB BANK PLC
THE REPORT OF THOSE CHARGED WITH GOVERNANCE (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7 OPERATING STRUCTURE
The Bank’s operating model enables the bank to manage resources and relationships responsibly to
deliver the best outcomes for stakeholders. The business is anchored by a corporate philosophy that
is centered around customer focus and agility to change while encouraging for a robust and economic
transformation.
The Bank develops and distributes a wide range of solutions, products, and services tailored to our
market segments in a secured and accessible channel and runs a strong customer care program. These
activities help to ensure sustainable business growth and high levels of financial output. In turn, the Bank
uses the financial output to reinvest in the resources and relationships we rely on to do business and
deliver our core purpose.
The Bank has grown to become the most innovative and preferred financial solutions and services
partner, supported by unique and updated services such as agency banking, mobile banking, and Internet
banking. The core solutions and services provided by the bank include retail banking, consumer banking,
payment solutions, corporate banking, treasury services, business banking, agribusiness, bancassurance
services, custody services and advisory services.
Resources Management
The Bank’s relevance today and in the future, along with our ability to create long-term value for our
stakeholders, is dependent on our readiness and ability to effectively manage and leverage the forms of
capital available to us.
Financial Capital
This capital enables us to deliver sustainable funding for our business activities. The Bank maintains
a strong level of capital to support its business growth strategies and to meet regulatory requirements.
We deploy this capital to productive opportunities to sustain our business, leverage growth, achieve
sustainable returns, and create value for the Bank’s shareholders and our stakeholders (including the
community in which we operate).
The Bank has pursued a balanced funding strategy that enables us to reward shareholders while at the
same time providing funds to support our business growth ambitions. The balance sheet has recorded
a steady growth over the years to TZS 12.2 trillion (18.9% YoY) as of the end of the year 2023, with
shareholders’ funds growing to TZS 2.1 trillion (23.6% YoY) as of the end of December 2023. The Bank
paid shareholders dividends in June 2023 to TZS 143.1 billion for the year ended 31 December 2022.
In addition to the retained earnings, most of the bank’s funding comes from customer deposits, which
comprises the majority (83%) of our funding base. In 2023, through the Bank’s wide distribution networks,
enhanced customer propositions, and solid financial footing, we attracted and mobilized a good mix of
deposits to support our business growth ambitions. Our customer deposits grew by 11.5% year-on-year
to TZS 8.5 trillion, with the majority comprised cost-effective deposits, which supported a 28.1% growth
in our loan book to TZS 7.7 trillion. The borrowed funds, mainly from our key strategic and development
partners, stood at TZS 1.4 trillion at the end of December 2023.
The Bank has robust internal policies for capital and liquidity management, in line with regulatory
requirements, which ensure all its obligations to stakeholders are met on a timely basis and that strong
returns are achieved from these investments. With a Liquid Assets Ratio (LAR) of 33% as of the end of
December 2023, our balance sheet can adapt to the current and emerging opportunities and changes in
our external context, enabling us to respond appropriately to borrowers and new prospects when these
arise.
Cost efficiency also guides the bank’s financial decision-making, ensuring we manage our operating
costs with necessary effectiveness. The Bank has pursued various strategies and initiatives aimed at cost
optimization, with further efficiency gains during the year, resulting in a cost-to-income ratio of 39.0% as
of the end of December 2023 (2022: 41.7%).
Asset quality continues to be an area of emphasis, with further improvements seen in overall credit quality
during the year. The Bank’s NPL ratio for the year stood at 3.2%, below the regulatory threshold of 5%,
with the performance anchored on proactive and close customer relationship management. In addition,
we have robust risk management measures and credit underwriting policies that underpin our approach
to lending.
The Bank will continue to enhance its balance sheet to remain agile and adapt to any changes in the
business operating environment as enabled by stable funding position, adequate capital position, and
improved asset quality. The Bank will continue to invest in automating our business algorithms, by using
information and communication technologies (ICT), for increased operational efficiency, convenience to
our customers, and diligently oversee the utilization of financial resources in the bank’s operations.
Human Capital
People remain the critical factor in deriving positive results from all other capitals as they carry the
vision of the bank. Therefore, human capital (embodied in people) is at the core of the bank’s strategic
ambitions. To deliver on our strategic ambitions, we have a team of 3,642 employees drawn from diverse
professional backgrounds, serving our customers across the business networks. The Bank continues to
buttress it’s human capital by investing in human resource development, focusing on, but not limited to,
training, staff wellness, staff recognition, competitive remuneration, and career growth.
Fostering a performance-driven culture
NMB is committed to having a strong ‘high performance’ culture, whereby an extrinsic rewarding of good
performance is one of the key elements of the bank’s remuneration philosophy and policy. To embed the
high-performance culture across the network, the bank reviews performance through financial and non-
financial lenses and assess individual performance on ‘what’ is achieved. This approach applies equally
to executives and all other employees. In 2023, the People agenda continued to focus on enhancing staff
productivity across the bank, in line with the bank’s goal of being customer-centric and highly performing.
Annualized income per staff in 2023 was TZS 386 million (2022: TZS 342 million). This is an increase of
12.9% year-on-year. During the year, the bank undertook various programs, including both virtual and in-
person training courses, to build the capacity of staff to be able to position the bank to achieve its strategic
goals and deliver its mission.
A key pillar of the bank’s people strategy is to develop and nurture talents across the NMB network.
To achieve this, the bank has continued to invest significantly in staff Learning & Development (L&D),
welfare, rewards, and benefits. In 2023 the Bank invested over TZS 298 billion in staff related costs (an
increase of 12.0% from TZS 266 billion in 2022). Staff costs currently contribute more than 54% of the
bank’s total costs, further highlighting the bank’s unwavering commitment towards employees’ welfare.
Diversity, equity, and inclusion are cornerstones for the bank as they provide a competitive advantage by
enriching the composition of the talented team. The Bank continues to support all staff (in line with our
diversity and inclusion agenda) to achieve their career goals in the bank through deliberate efforts around
performance management, coaching, and mentoring. To this end, the bank continues to implement
initiatives that drive this agenda.
Intellectual Capital
Intellectual capital comprises the bank’s brand perception, its intellectual property, and its overall capacity
to be innovative in the provision of its products and services. At NMB, our intellectual capital includes
highly talented human capital, leading technological innovations, our systems and processes, our rich
heritage, and a strong brand that resonates with over 7 million customers in Tanzania.
NMB brand is supported by marketing efforts, investor relations, well-trained personnel, and customer
advocacy. The Bank is geared to create positive customer experiences at every touch point. The Bank
periodically undertakes a review of brand health, identifying top brand drivers and the stress points with
specific remedial actions. To this end, NMB has invested in various products and solutions and has a
contact center that handles a high volume of customer engagements. Furthermore, the Bank ensures
its reputation remains solid, driven by rigorous and professional stakeholders’ engagement, compliance
with regulatory requirements, and a strategic communications approach. The Bank maintained a positive
tonality level of 99% during the year 2023.
Innovation
Products and services need to be reflective of the ever-evolving customer needs to remain relevant.
During the year, our innovation teams continued to work on different projects to enhance customer
propositions through continued innovation and development of our platforms. The ongoing innovation
has resulted in better customer experience, improved system efficiencies, and helped unlock big data
potential for future product development.
Technology
Technology plays a pivotal role in driving our growth, performance, and operations. To drive the digital
transformation agenda, we have recruited specialists in key areas, including Data Analytics, Data
Architecture, and Systems Development, to enhance our technological capabilities. We have also made
several enhancements to our technological infrastructure, resulting in improved stability, connectivity, and
service availability. Nonetheless, an upsurge in the usage of digital channels and technology means an
increase in potential risks that target technology solutions and clients on various platforms. To enable us
to protect against potential attempts, we enhanced our overall cyber-security environment to safeguard
our information and technological assets. We regularly carry out tests on our systems for cyber risks and
security as we continue to prioritize the safeguarding of our client’s information. Our customers entrust
us with confidential and personal information that we keep safe and aim to always comply with respective
data protection requirements.
Manufactured Capital
Manufactured capital consists of equipment, physical facilities and infrastructure, digital channels such as
ATMs, and technology whose value is realized in the delivery of products and services. Our equipment
and facilities primarily provide comfort, convenience, and security to our customers and employees.
Our wide distribution network and innovative digital platforms, including the mobile banking, cards, and
agents, provide competitive differentiation and are key delivery channels which support the widening of
access to financial services in the country – over 96% of all our customer transactions are carried out on
our alternative channels. We invest constantly to improve our infrastructure, which is essential for the
efficiency of our business model.
Bank’s Channels:
To complement the wide branch distribution, the bank has invested heavily in innovative delivery channels,
which have played a critical role in improving access to financial services and widening financial inclusion.
NMB Mkononi: NMB Mkononi is a mobile banking service that enables customers to enjoy easy
•
access to various banking services, including money transfer and payment services. NMB Mkononi
has continued to reach many customers who would have remained unbanked. In 2023, the mobile
banking (NMB Mkononi) users increased by 5.9%, reaching 4,952,822 users from 4,677,020 in 2022.
Agency Banking: The Bank has been at the forefront of widening financial inclusion by implementing
•
the agency banking model. Through agents, the bank can extend banking services in areas where
banking services are unavailable or not easily accessible. With 28,295 agents as of the end of
December 2023, agency banking also creates business opportunities for service providers, allowing
them to create income and employment where it is most needed. Agents enable customers to access
banking services, including deposits, withdrawals, and bill payments beyond official banking hours.
Due to the greater geographical area covered by agents, customers also enjoy greater convenience
as services come closer to their most accessible location.
• Internet Banking (NMB Direct): NMB Direct is the bank’s internet-banking solution, which enables
customers to do end-to-end banking through a secure and feature-rich platform. The platform continues
to be enhanced to improve the overall customer experience and see good growth year on year in
the number of users. In 2023, the number of Internet Banking users increased by 66.5% reaching
41,652 users from 25,020 in 2022. More details are shared under Note 10 to Those Charged with
Governance.
Branch Network and ATM: Our footprint across the country consists of 231 branches and 715 ATMs,
•
which support service delivery to our customers nationwide. Services accessed by customers in our
ATMs include cash withdrawals and deposits, balance inquiries, and cardless cash withdrawals. More
details are shared under Note 10 to Those Charged with Governance.
Cards and Merchants: We have a widely recognised range of card-based payment products,
•
including debit cards, credit cards, prepaid cards, and QR codes as cash-free payment solutions. Our
debit and credit cards can also be used for online e-commerce transactions. Our cards feature industry
PCI security standards to safeguard our customers’ transactions. We have partnered with various
merchants to offer card discounts to our customers to support cash displacement.
ICT infrastructure
The Bank invests optimally in ICT to improve the overall customer experience. Various robust digital
platforms enable us to offer enhanced digital experiences to our customers. As a result of the continued
investment in the digital space, we remained a top-tier financial institution in the country, providing
innovative solutions, improving ease of access to banking services, and ensuring system availability and
reliability.
We are also upgrading the Core Banking System (CBS) to ensure continued stability and enhanced
customer satisfaction.
We are keen to ensure that we remain a pacesetter for the progressive modernization of the infrastructural
and manufactured capital, improving efficiency and enhancing our multi-channel customer engagement
while creating a scalable and resilient infrastructure. Our investments in these areas will deliver a more
efficient, scalable, and flexible infrastructure to support our strategic ambitions.
Natural Capital
Natural capital encompasses the natural resources that we employ in our value creation for our
stakeholders. We are committed to responsibly employing natural resources, ensuring that we minimize
negative impacts on the resources. The Bank recognizes its responsibility to achieve global climate
goals and is investing optimally to ensure systemic change. Internally, the bank is committed to reducing
its carbon footprint by continuing to install energy-efficient LED lighting and HVAC systems across the
network. We will continue to identify effective ways to use and manage the natural resources that are
available to us more efficiently and support our customers to elevate ESG compliance.
At NMB, we firmly believe that we can only prosper if the communities that have given us the social license
to operate thrive. This is what forms the basis of our social and relationship capital. The social and
relationship capital broadly represents the bank and the relationships within and between communities,
various stakeholders, and the ability to enhance individual and collective well-being. To champion socio-
economic development, the bank implements various social impact initiatives through its Corporate Social
Investment arm, which serves as its corporate philanthropy vehicle.
The social investment programs are guided by the key pillars of Education, Health, Natural Disaster
Recovery, and Financial Skills-building for various groups. To deepen its impact on communities, the
NMB Foundation was established as a vehicle to broaden social impact. A core facet of the revamped
model seeks to leverage the bank’s strategic partnerships with local and international stakeholders,
including development organizations and the private sector, to advance social and economic change for
Tanzanians further.
We maintain strong and positive working relationships with our industry regulators and key stakeholders,
including the Government of the United Republic of Tanzania and Revolutionary Government of Zanzibar.
The relationships have been deepened through enhanced engagements to support the bank’s overall
mission.
8 OPERATING ENVIRONMENT
In 2023, the world economy grew at a modest pace and uneven across countries and regions. The global
economy is estimated to have expanded by 3.1% in 2023, a slight dip from 3.5% in 2022 (IMF WEO
Update January 2024). In Advanced Economies, economic growth slowed from 2.6% in 2022 to 1.6% in
2023 on the back of subdued economic activity in the Euro area and the UK due to high inflation, which
continued to limit household spending. In developing countries, however, economic growth remained
at 4.1% in 2023 as in the previous year due to lagging effects from COVID-19 and the Russia-Ukraine
conflict.
While global economic growth is projected to remain at 3.1% in 2024, a slight growth recovery is anticipated
to be at 3.2% in 2025 (IMF WEO, January 2024), aligning with the resurgence of global demand, easing
financial conditions, and the restoring of inflation rates within Central Banks targets. Economic growth
is expected to slow down among developed economies such as the Euro bloc, the UK, and the US.
The monetary policies are anticipated to exert downward pressure on growth, while external factors like
geopolitical tensions, climate change, tightening credit conditions, commercial real estate challenges,
and high mortgage rates may contribute to inflationary pressures.
Furthermore, China faces challenges such as growth deceleration in 2024 and 2025 due to supply
and distribution disruptions, funding difficulties after real estate developer defaults, and home buyer
confidence issues. The property sector remains a potential weak point, though ongoing policy support
may sustain recovery hopes. The International Monetary Fund (IMF) predicts that India’s GDP output
growth will experience a marginal uptick to 6.7% in 2024, followed by a 6.5% increase in 2025. These
projections indicate a sustained growth path, positioning the country as one of the G-20 nations with the
highest economic expansion.
espite global economic challenges, inflation has generally trended downward in recent months,
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remaining below the target levels set by various central banks. Global inflation is estimated to have
decreased from 8.7% in 2022 to 6.8% in 2023 (IMF WEO Update January 2024), mainly due to lower
food and oil prices, tightening monetary policies, and reduced household spending. The decrease in oil
prices was driven by restrained demand in advanced economies, subdued economic activity in China
and the increase in shale oil inventories in the US, which exerted downward pressure on oil prices.
Lower inflation is expected in 2024 across many economies, particularly in developed economies where
effective monetary policy has contributed to disinflation.
Central banks have maintained interest rates steady to mitigate risks associated with reduced economic
growth, inflation, property market challenges, decreased consumption, and heightened geopolitical
tensions. A continued decline in global inflation is projected, however, a longer duration is anticipated for
inflation rates to return to target levels in numerous economies, necessitating a delicate balance between
inflation mitigation and recession prevention.
Africa’s economic growth has been hampered by persistent challenges, including the long-lasting impact
of the COVID-19 pandemic, the Russia-Ukraine conflict, rising energy and food prices, climate change,
fiscal structural issues, monetary policy tightening, and increased borrowing costs.
In 2024, Africa is projected to experience modest economic growth of 4% from 3.3% (IMF World Economic
Outlook Update, 2024), with most countries in the continent showing an acceleration compared to the
previous year. Among the different regions, the East Africa bloc is expected to outperform others in terms
of economic growth. However, it is important to note that major African economies, including the Sahel
region, Algeria, Ghana, and South Africa, face potential political risks due to upcoming major elections.
These elections could have an impact on the economic stability of these countries.
One of the emerging challenges that some African countries will face in 2024 is the financial strain caused
by Sovereign debt and the burden of repayment. According to IMF, the region’s ratio of interest payments
to revenue, a key metric to assess debt servicing capacity and predict the risk of a fiscal crisis, has more
than doubled since the early 2010s and is now close to four times the ratio in the advanced economies.
These trends sparked concerns of a looming debt crisis in the region. However, resource-intensive
economies and major commodity exporters are expected to fare well due to the intense competition and
high prices for Africa’s hydrocarbons, mining sector output, and agricultural produce. This will continue
to attract substantial investment in Africa, especially in the energy sector, as well as minerals and metals
that play a crucial role in the global energy transition and digital transformation.
The Inflationary pressures are expected to ease in the most African countries in 2024, compared to the
elevated levels recorded in 2023. Admittedly, however, analysts indicate generally that few countries,
including Angola, the Democratic Republic of Congo (DRC), Ethiopia, Egypt, Ghana, Nigeria, Sudan, and
Zimbabwe, will continue to potentially face double-digit inflation. This inflationary environment can pose
challenges to these economies and may require specific measures to address.
Exchange rates in African countries are expected to face modest depreciatory pressure in 2024,
except in the CFA franc zone, where currencies will remain pegged to the euro, leading to appreciation.
Additionally, states with excessively high inflation rates will experience a more substantial depreciation
in their exchange rates. These exchange rate dynamics will have implications for trade and economic
stability.
Sub-Saharan Region
The Sub-Saharan Africa (SSA) region growth is predicted to accelerate to 3.7% in 2024. Excluding 2021,
the peak year for post-COVID-19 recovery, this is the fastest rate of growth in a decade and positions SSA
as a global outperformer, given slowing growth in developed markets. However, faster headline growth
masks underlying vulnerabilities, with inflation remaining sticky and elevated debt-servicing costs putting
pressure on fiscal balances and foreign reserves.
Despite the slowdown, East Africa remains the fastest-growing region in Africa. GDP growth is expected
to outpace its counterparts (The Economist Unit, 2023). This will be supported by a full recovery of the
services sector, private consumption, and improved export performance.
East African FX rates were broadly stable from 2016-20 but showed weakness in 2021-23 as the US
Dollar strengthened. Thus, currency weakness has, until recently, not been an issue faced by most.
Tanzania’s economy demonstrated resilience against domestic and external shocks, yet it faced
challenges from an unfavorable global economic setting and domestic factors that exerted pressure on
its growth trajectory.
Following a slowdown to 4.7% in 2022, GDP growth rebounded in 2023 and is expected to grow 5.3%,
according to the Bank of Tanzania. This resurgence was predominantly fueled by robust expansion in the
service sectors, notably financial and insurance services, along with information and communications.
The mining and quarrying sectors witnessed a 10% expansion, attributed to increased activities in coal
extraction.
Agriculture, constituting approximately 27% of the total domestic gross production, was the primary
contributor to GDP. With favorable weather conditions in 2023, the agriculture sector is poised for
continued growth in 2024. The Government projects a 10% growth in the agriculture sector by 2030.
Inflation:
Inflation peaked at 4.9% in January 2023 and decelerated to 3.0% by December 2023, comfortably below
the bank of Tanzania’s 5.0% target. Factors contributing to this decline included a significant drop in non-
core inflation, less accommodative monetary policies, diminishing inflationary pressures, the positive
impact of improved weather conditions on crop harvests, and alongside government policy responses in
agricultural sector.
The private sector experienced robust credit growth in 2023, surging to 17.1%, surpassing the 16.4%
target, driven by increased economic activities, an upsurge in demand for capital spending, and a
generally optimistic economic outlook. While overall lending rates remained relatively stable at 15.34% as
of December 2023, deposit rates marginally increased by 4.52 basis points to 7.45% in 2023 compared
to 6.94% % in 2022.
Within Tanzania’s economic blueprint, specifically under the ‘Agenda 10/30,’ agriculture is a pivotal growth
driver. The overarching objective of this initiative is to realize a 10% expansion in the agricultural sector
by the year 2030. Critical factors integral to its success includes fiscal and monetary policy support,
augmenting the labour force and land allotments, prioritizing irrigation schemes, implementing a ‘block
farm’ model, and incorporating advancements in seed multiplication techniques.
Looking ahead: According to the International Monetary Fund (IMF), Tanzania’s economy is projected to
grow by 6.1% in 2024, buoyed by a tourism rebound, an improved business environment, and agricultural
growth supported by a favorable harvest season. Inflation is expected to stay within the Bank of Tanzania’s
5% target.
35.0 25%
32.1
30.0
27.3 20%
25.0
22.3
TZS Trillion
20.3 17%
19.7 15%
20.0
23%
15.0
11% 10%
10%
10.0
5%
5.0
3%
0.0 0%
2019 2020 2021 2022 2023
The oversight role of the Bank of Tanzania in supervising financial institutions remains paramount for
fortifying the stability and soundness of the financial sector. The regulatory environment stands as a
bastion of stability, and our ongoing engagements with regulators exemplify our unwavering commitment
to achieving optimal compliance.
In 2023, the Bank of Tanzania introduced new regulations. The new regulations include the Foreign
Exchange (Bureau De Change) Regulations 2023, The Banking and Financial Institutions (Capital
Adequacy) Regulations 2023, The Banking and Financial Institutions (Liquidity Management) Regulations
2023 and The Banking and Financial Institutions (Prompt Corrective Actions) Regulations 2023.
The new liquidity management and capital adequacy regulations signify the broader adoption of Basel II
and Basel III reporting frameworks requirements of the Basel Committee on Banking Supervision (BCBS),
aimed at ensuring that commercial banks have sufficient liquidity and capital levels to be resilient in times
of crisis or internal and external shocks and maintain public confidence in the banking sector.
The new regulations require banks and financial institutions to maintain a Common Equity Tier1 (CET1)
ratio of not less than 8.5%, a leverage ratio of not less than 7%, a stock of unencumbered high-quality
liquid assets (LCR) amount not less than 100% of total net cash outflows, and a net stable funding ratio
(NSFR) of not less than 100% at all times.
Banks are accorded between 18 to 54 months moratorium periods to ensure compliance with the new
regulations. Notably, as of December 31, 2023, NMB has conducted a gap analysis on the new regulatory
requirements, and we are on course to ensuring compliance.
The accommodative business environment in Tanzania supported banks’ financial results in 2023 through
increased credit portfolio expansion, elevated total revenue, and significant increase in profitability.
Despite a slight softening, credit growth in the private sector persisted with double-digit increases due to
post-pandemic pent-up demand for credit.
Tanzania Banking Sector: Higher Credit Growth and Rising Profitability (Continued)
Banking Sector’s Loans & Deposits
37.1
32.6
32.9
27.7 27.1
23.8 24.6
21.9
19.0 19.8
Figure 2: Illustrates the five-year performance of loans and deposits in the banking sector. Loans
Source: Bank of Tanzania 2023, Fourth Quarter Statistical Bulletin
Deposits
The Tanzanian banking sector recorded robust performance and remained stable and resilient to short-
term internal and external shocks, mainly on account of a stable macroeconomic landscape.
Overall, Tanzania’s banking sector registered profit after tax of TZS 1.6 trillion in 2023, a 70% rise
compared to the previous year. The non-performing loan ratio declined to 4.3%, indicating improved
banking sector loan portfolio quality, whereby strong economic growth and an improved operating
environment contributed to ongoing reductions in non-performing loans and loan loss provisions. The
cost-to-income ratio stood at 50.7% (2022: 54.0%), highlighting significant efficiency gains across the
sector. Loans and advances growth accelerated to reach TZS 32.9 trillion, further highlighting increased
private sector credit appetite.
The banking sector also has robust capital adequacy levels, with capital above regulatory requirements.
Tanzania Banking Sector: Higher Credit Growth and Rising Profitability (Continued)
Source: Bank of Tanzania; Financial Sector Supervision Annual Report FSSA 2022, and NMB computation
Note: *The 2023 FSSA 2023 is expected to be issued in September 2024,
OBSE is off-balance sheet exposure, and TRWA is total risk-weighted assets.
According to industry benchmarks, NMB remains the top performer in its class. As stated in the Tanzania
Financial Sector Supervision Annual Report 2022, which assesses the financial sector’s sustainability,
NMB has consistently surpassed the industry standard, highlighting its exceptional financial soundness
indicators.
The Bank maintains its position as the leading bank in Tanzania, demonstrating superior profitability
metrics across various dimensions. The bank achieved an outstanding profit after tax of TZS 542 billion,
securing the highest market share at 34.4%. Notably, the Bank’s efficiency ratio surpassed the industry
average, establishing it as the foremost performer in this category. Refer to the table below.
Key performance indicators of the bank in comparison with the industry in 2023.
ooking Ahead: The banking sector outlook remains positive, with anticipated sustained growth and
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enhanced performance. The favourable sector outlook aligns well with the positive operating environment,
the resilience of a well-diversified Tanzania economy, and structural soundness of the sector, especially
the strength of the systemically important banks in the country. The Bank recognizes liquidity challenges
and has put in place key initiatives to address those challenges in order to operate within acceptable
limits.
Tanzania Banking Sector: Higher Credit Growth and Rising Profitability (Continued)
Competition
The Tanzanian banking sector continues to be competitive. In this situation, banks aggressively launch
various products to retain customer deposits and provide adequate funding to meet increasing credit
demands.
To secure sturdy growth in our main target segments, we continue to develop best-in-class propositions
and experiences to target robust growth in our key target segments. We focus on deepening the customer
experience and launching new propositions to achieve above-market average growth. In the credit, our
focus remains on maintaining a high portfolio quality and better pricing, considering the competitive
yet subdued market conditions. Our success includes targeting relationship deposits and new current
accounts while remaining cost-effective for term deposits as we optimize our cost of funding.
We expect the credit market to sustain its competitive nature, so we are exploring expanding opportunities
in underserved market segments. We also expect that deposit markets will maintain their competitiveness
as customers continue to seek favourable returns on their funds.
Technology Dynamics
The banking sector, recognizing the transformative potential of technology, has shifted gears to serve
customers with enhanced efficiency and convenience. The evolution from traditional brick-and-mortar
structures to a click-based approach has revolutionized service delivery across various channels.
NMB is strategically aligned to leverage technological advancements, catering to customers’ evolving
demands while maintaining a competitive edge. We are steadfast in our commitment to adopting
emerging technologies and business models that foster growth and drive digital adoption. Investments in
technological and digital capabilities will remain an area of strategic investment focus for the bank in 2024
and for years to come.
The advent of online banking has not only transformed operational methodologies but has also introduced
new risk dimensions. Heavy reliance on technology exposes banks to potential risks, including information
and cybersecurity threats. Unauthorized access or cyberattacks leading to data leakage and confidentiality
breaches pose legal challenges and can inflict severe damage on a bank’s reputation. NMB has proactively
established a comprehensive cyber risk management framework to fortify its network against cyber-
attacks. Since our core business spans physical and online outlets, safeguarding information security
remains paramount. In demonstrating the robustness of our risk management capabilities, NMB has been
recognized as the Safest Bank in Tanzania by Global Business and Finance Magazine (2023).
SWOC Analysis
Item Description
The Bank boasts a robust brand presence, establishing itself as a leading financial institution.
With a substantial asset size, NMB holds a systematic market position in Tanzania. A commitment
to digitalization and innovation places us at the forefront, facilitating outstanding customer
experiences and fostering growth.
Customer focus, extensive network, operational excellence, and strong governance foundations
Strengths are integral components of NMB’s competitive edge. Our unwavering commitment to customer-
centric practices distinguishes us as the bank that listens and is closer to its customers. With the
largest network of branches and agents, we maintain an extensive footprint.
The Bank has forged strong relationships with diverse stakeholders, including the Government,
and has demonstrated a commitment to Corporate Social Investment (CSI), contributing to
community development.
To further differentiate ourselves, there is a need to enhance our competitive model, focusing on
Weakness
product offerings, customer experience, and pricing strategies.
Amidst a growing and vibrant population, there are significant opportunities to tap into the youth
segment. The underserved segments of women, informal businesses, and SME sectors present
areas for expansion. Exploring the unexploited potential in agriculture value chains can yield
fruitful outcomes. The rural population, remains largely excluded from formal financial services
Opportunities
and this also presents a significant growth opportunity for the bank.
Strategic partnerships with diverse stakeholders will offer a pathway for growth and expedited
execution. There is also an opportunity to position NMB Bank as a pan-African bank, solidifying
its status as a crucial regional player.
The landscape presents challenges in the form of cyber risks, macroeconomic and geopolitical
Challenges uncertainties, climate-related risks, disruptions caused by evolving technology, and market
competition. Addressing and mitigating these challenges will be crucial for sustained success.
According to the Intergovernmental Panel on Climate Change (IPCC), human carbon dioxide and other
greenhouse gas emissions are a primary driver of climate change and present one of the world’s most
pressing challenges. Greenhouse gas emissions have increased since the pre-industrial era, driven
largely by economic and population growth, and are now higher than ever. A changing climate has a range
of potential ecological, physical, and health impacts, including extreme weather events (such as floods,
droughts, storms, and heatwaves), sea-level rise, altered crop growth, and disrupted water systems.
Economic activities produce or result in accelerated climate change by releasing additional CO2 into the
atmosphere. The effects of climate change, in turn, impact the communities and environment in which
corporations operate.
As a vehicle for sustainable socio-economic development in Tanzania, the bank recognizes the impact
of climate change and its role in addressing overall environmental challenges. The Bank is committed to
ensuring lasting prosperity for society and the environment in which the bank operates. By engaging in
the positive transformations of businesses and society, our teams work daily to build, together with our
stakeholders, a better and more sustainable future through responsible and innovative financial solutions.
ur Environment and Social Policy (E&S Policy) and the Climate Risk Policy are critical tools we use to
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assess and review the risks of our lending activities. The policies provide relevant criteria against which
clients and transactions are screened, as well as excluded sectors that the bank will not finance. The
policy, along with accompanying tools, is applied and embedded into our credit approval process. The
Bank continues to strengthen capabilities to support our overall ambitions and to deploy relevant tools
that enable the bank to consistently measure and monitor our loan portfolios and alignment towards
supportive climate efforts.
According to the 2022 census, Tanzania’s population stands at around 62 million people, experiencing
a growth rate of 37% since 2012. The country’s demographic makeup reveals a predominantly youthful
population, with over 60% being under the age of 25. From a political standpoint, Tanzania maintains
stability as a unitary republic, featuring both a national government and a decentralized government in
Zanzibar, granting autonomy for non-union matters. The country operates within a multi-party system.
Since independence, the country has undergone impressive political and economic developments and
improvements in social welfare. It remains as a model of political stability within the region.
The overarching policy goals of the current government align with the Tanzania Development Vision 2025
and its corresponding five-year development plans. Looking ahead, the Government is gearing up for
the next phase, Development Vision 2050, which aims to propel the nation toward enduring social and
economic prosperity while adapting to the evolving technological landscape.
In its diplomatic endeavours, the Government actively collaborates with the multilateral and bilateral
development partners. Evidently, the Government prioritizes an export-led-and-inclusive industrialization
and job creation through public and private sector partnership by emphasizing the private sector as a key
driver of broad-based economic growth.
takeholders’ engagement formed part of the Board’s extensive agenda in 2023 and 2024 going forward.
S
NMB has a wide range of stakeholders with differing interests. The Board has different mechanisms
to ensure effective engagement with key stakeholders and that the interests of those stakeholders are
considered duly in Board deliberations and informed decision-making processes.
We regularly liaise with other key stakeholders, including the Government, regulators, and policymakers
(at national, regional, and global levels) to share insights and support the development of best practices
across our markets.
As part of our regular engagement with the regulator, we discuss bank-specific and system-wide issues
and use the Tanzania Bankers Association (TBA) platform and other banks to discuss broader banking
systems issues, such as regulations and macro issues.
During the year, the Board continued to engage with stakeholders and was informed about relevant
stakeholder matters through management updates. The Board engaged with or received views from its
key stakeholders during the year are provided below.
Stakeholders And How We Engage Stakeholders Expectations How We Meet Stakeholders’ Expectations Our Efforts In 2023
Customers
• Face-to-face interactions • High quality and seamless • Maintaining the highest professional and • Revamped our Mkononi platform to add more
• Interactions at our branch network. service. ethical standards when dealing with our features.
• Social media and website channels. • Customer privacy and data customers. • Revamped our Agency banking services to bring
• Call centre interactions. protection • Focusing on both the personal and business banking services closer to our customers.
• Customer satisfaction surveys • Strong cyber risk management. financial needs of our customers when • Opened 4 new branches and relocated 2 branches.
• Reasonable service fees. developing our products and services. • Launched NMB Kwetu to suit the needs of Diaspora
• Innovative financial solutions and • Strengthening cyber risk management and Customers.
services. data privacy policy. • Launched NMB Hekima plan to suit the needs of
• Convenient access to banking • Improving our digital banking channels to pensioners.
services through digital chan- enhance seamless accessibility. • Added 2 new deposits accepting automated teller
nels • Ensuring that our people are equipped with machines.
• Knowledgeable employees relevant knowledge on service delivery and • Signed collaboration agreements with government,
• After-service care. committed to giving advice and acting in the trade, and commercial organisations to help facilitate
• Minimal service disruptions. best interests of our customers. the expansion plans of our corporate clients
Community
• University scholarships (Nuru Yangu • Good corporate citizen • Integrating ESG factors into our risk • Providing financing to sustainable projects.
Scholarship). • Inclusive and equal employment framework and credit decision processes. • 62 Scholarships were offered to students through the
• Participate in the Government’s opportunities. • Giving back to the community through Nuru Yangu Scholarship costing 286,559,200.
employment creation initiatives. • Responsible financing. corporate social investment programs • NMB has supported 247 schools with 15,500 desks
• Supporting financial inclusion • Contributing to job creation. focused on Education, Health, and to benefit over 46,500 students and teachers. Also,
initiatives. • Partnership to address social Environment. provided 34 schools with 1,480 double-decker beds
and environmental issues. • Creating an inclusive workforce and work to accommodate 2,960 boarding students.
• Support for communities and environment. • The Bank has embarked on building a modern
access to financing for societal pre-primary school in Makunduchi, South Unguja
needs. Zanzibar.
• The bank allocated TZS 350 million to rehabilitate
and modernise Muhimbili National Hospital’s medical
facilities.
Employees Stakeholders Expectations How We Meet Stakeholders’ Expectations Our Efforts In 2023
•P eriodic engagement initiatives such • Continuous training and career • Ensuring fair HR policies and processes • Increased basic salary by 5% - 10%.
as SIKIKA platform, BM meetings, development. • Ensuring transparent and objective • Increased the minimum pay for our fixed term
Townhall. • Safe and healthy work environment. performance appraisals and performance- staff.
•H R Support services. • Job satisfaction and recognition. based rewards and recognition. • Increase the training budget by 7.9% for the
•H R policies and procedures. • Competitive benefits. • Providing opportunities for training and career development of our colleagues across
•P eriodic performance reviews. • Trust, respect, and fair employment development to build skills. the network.
• Team building, games, and recreation practices. • Offering health and wellness benefits • Conducted credit attachment programme for
activities. • Safe and healthy work environment. • Ensuring fair and equitable opportunities for all potential Branch Managers.
• Training, seminars, and workshops. • Embracing equity, diversity, and colleagues. • Conducted training to equip RMs with loan
•E mployee annual feedback and inclusiveness. • Promoting teamwork and supporting one syndication, tourism financing and wealth
satisfaction survey. another to achieve shared goals. management skills.
•H R business partnering support. • 3 staff were nominated to take part in the
CEO Apprenticeship Program.
Investment Community Stakeholders Expectations How We Meet Stakeholders’ Our Efforts In 2023
Expectations
• Quarterly financial • Competitive return on investment/ • Ensuring timely disclosure and • Held more meetings with analysts, credit rating agencies and investors to
results publications. Equity reporting share our corporate strategy, financial performance, and macroeconomic
• Annual reports. • Strong corporate governance and • Implementing sustainability and financial performance outlook.
• Annual general meeting. ethical practices. framework. • Paid dividends consistently, (TZS 286.25 per share for 2022 financial year).
• Quarterly Investors • Timely disclosure and compliance • Ensuring robust risk culture, • Enhanced our Investor Relations department to improve engagement with
breakfast. with laws and regulations. governance, and management. shareholders.
• Presentations, • Sustainable growth. • Disciplined execution of the bank’s • Issued a sustainability bond debuted Jamii Bond adding more than 6,000
conferences, meetings, • Strong profitability and well- strategy. new investors.
and roadshows. capitalised. • Ensure a high standard of corporate • Participated in COP-28.
• Periodical meetings with • Strong and resilient balance governance and ethical practices. • Finalized the Sustainability Framework, which will guide our operations
Credit rating agencies. sheet. • Ensuring strong oversight and toward archiving our strategic sustainability goals.
• Responsible banking practices. accountability by the Board and • Conducted training for Board members, Executive management
Executive management team. team, Heads of departments and the entire network with respect to
• Continuous business performance environmental, social, and governance aspects, as well as sustainability.
enhancements.
Suppliers
• Regular vendor • Fair and transparent bidding and • Regular engagement and • The Bank conducted a detailed review of the Procurement Policy and
meetings. selection process. reconciliations of supplier accounts. related Operating Procedures with the support of an independent external
• Purchase contracts. • Timely settlement. • Whistle-blower policy consultant with a view to,
• Request for proposal • Strong Governance and ethical implementation o To align the policy with the bank’s evolving needs
and quotation. conduct. • Timely settlement of vendors’ o To align the Procurement Policy with best practices
• Timely communication and claims. • The revised procurement policy will govern due diligence and contract
settlement of disputes. • Adhering to contract and agreement management process, as well as addressing key topical sustainability
terms. issues including Ethics, Human rights, Diversity & Inclusion and
• Ensuring integrity in all procurement Environmental related considerations.
processes. • Revised Procurement Policy, and it is currently in final draft mode and shall
be tabled in BARCC for review and subsequently to the Board for approval.
Strategic Objectives
The Bank’s mission that drives its short-term, medium-term, and long-term strategic focus is to be
the bank of choice, delivering an innovative and transformative customer experience that promotes
financial inclusion and well-being. While fulfilling the mission, NMB Bank seeks to maintain its leadership
in financial performance, leading in digital and innovation and keeping a stronghold in the retail and
wholesale markets. The Bank has re-imagined its Medium-Term Plan focusing on three pillars namely
Winning Propositions, Operational Efficiency, and Innovating for the Future. Under each strategic pillar,
there are strategic thrusts to guide the bank’s execution going forward.
Strategic Framework
The oversight of the bank’s operations rests with those entrusted with governance. This responsibility
involves vigilant monitoring of Key Performance Indicators (KPIs) established annually and tracked on
a quarterly basis. Management presents comprehensive performance reports during these intervals to
those charged with governance, shedding light on the successful realization of each KPI. These reports
also articulate any challenges encountered within the internal or external environment. In addition, they
outline the requisite support needed to navigate and accomplish the predetermined objectives.
Bank’s Medium-Term Plan (MTP) Strategic Pillars to Drive and Sustain Growth
Winning proposition
• Enhance Mass Customer Loyalty: Continue increasing mass customer base and gaining loyalty. The
Bank has been able to grow its mass customer base by 20% year on year, commanding leadership
in customer base across the industry. This has been possible through enhanced propositions such as
NMB Pesa, Mshiko Fasta and spending to save that add value to our customers.
• Excel in the Core Middle Segment: The Core Middle segment is expected to drive 25% of overall market
growth, with NMB market share estimated at 20%. Leveraging its experience serving government
workers, the bank plans to engage corporates through bundled employer schemes and foster direct
relationships, emphasising digital experiences for customer acquisition.
• Lead in SME (Focus in Agriculture): SME, being the backbone of NMB performance, has recorded
a remarkable loan portfolio growth of 26% YoY, while Agribusiness recorded a growth of 22% YoY,
backed by enhanced customer relationships, value solutions such as the Agri marketplace, and
competitive pricing.
• Deepen Penetration in Wholesale: Wholesale portfolio growth has been well supported by enhanced
customer relationships and well-trained and equipped staff. Capacity building, exposure, and
enhancement of Internet banking have been key agendas in spearheading overall wholesale growth.
The wholesale business recorded loan growth of 87.7% YoY.
Operational efficiency
• Enhance branch productivity: The transaction migration agenda has consistently been successful, with
96% of transactions performed outside physical branches through the bank’s alternative channels.
This has enabled the bank to continue improving its efficiency and overall customer experience.
• Optimize organisational productivity: Strong efficiency gains, with the Cost-to-Income ratio reducing to
39% from 42% in 2022. This resulted from factors such as revenue per FTE improving by 15% YoY,
reaching TZS 385Mln/FTE, driven by increased efficiency by our people in generating revenue.
• Strengthen end-to-end Credit Risk Management: Investments such as Loan Management systems
and enhanced IFRS9 systems are all geared towards improving credit management, and the result is
observed in continuously decreasing the Loan Loss ratio (LLR) to 1.1% by the end of 2023.
Bank’s Medium-Term Plan Strategic Pillars to Drive and Sustain Growth (Continued)
• The Bank invested TZS 1 billion during the year in Data management to ensure that we have clean,
accurate and reliable data infrastructure to support the overall Bank’s decision-making.
• Exceed customer expectations: 87% of the Bank’s customers are satisfied with the Bank’s services as
per the recent customer satisfaction survey (CSAT) conducted in 2023. The Bank has also achieved
a 59% Net Promoter Score (NPS), indicating a positive outlook towards enhancing overall customer
experience.
• Augment IT infrastructure: Recognizing the critical role of IT infrastructure estate as a vital support
system, the bank is committed to ongoing reviews to keep pace with changes in technology and
business dynamics. While traditional banking systems have been product-oriented, current market
dynamics emphasise real-time processing and visibility across multiple platforms in a customer-
centric approach. The Bank has consistently invested in upgrading IT infrastructure and cybersecurity
hardening to ensure our customers are able to access our services conveniently, reliably, and securely.
The Bank embarked on a comprehensive five-year business strategy in 2021, spanning until 2025.
This strategic framework centered around three core areas: Delivering Winning Propositions, Driving
Operational Efficiency, and Innovating for the Future. These pillars were strategically aligned with the
Bank’s growth ambitions, considering market challenges and stakeholders’ aspirations.
By 2023, marking the third year of strategy implementation, the bank remained steadfast in pursuing its
strategic aspiration of “customer first, innovative mind, and efficiency at the core.” During this phase, the
bank proactively addressed internal obstacles hampering performance goals and sought to build long-
term business sustainability while placing the customer at the forefront of its endeavors. The overarching
objective was to bring about holistic transformation, ultimately shaping the bank into an institution poised
for the future.
Since the inception of this strategy, the bank has made commendable strides in implementation,
achieving significant gains that position it for sustained growth. The Bank’s progress is evidenced through
a comprehensive financial and non-financial performance evaluation against strategic value drivers from
2021 to 2025.
The Bank’s strategic progress has been marked by noteworthy achievements, including:
- Expanded customer base and transaction channels.
- Increased financial inclusion, accessibility, and penetration through digital channels.
- Efficiency gained through technological enhancements.
- Strong market presence with a household brand
- Reinforced compliance and commitment to good corporate governance
- Enhanced portfolio quality.
The performance trend of Key Performance Indicators for the Medium-Term Plan Strategy underscores
the Bank’s success in navigating market dynamics and consistently outperforming strategic financial
KPIs. This robust performance is attributed to the meticulous enhancement of balance sheet efficacy,
seamless digital experiences for customers, addressing efficiency and productivity gaps, overhauling
the distribution model, and maximizing strategic partnerships and stakeholder engagement. As the Bank
moves towards the culmination of its strategic journey, it stands as a testament to its commitment to
innovation and sustainable growth.
Those charged with governance oversee the Bank’s operations through quarterly performance reviews.
These reviews highlight key performance indicators (KPIs), identify potential internal and external
challenges, and outline necessary support to attain set goals.
KPI Target Actual 2022 2021 2020 2019
2023 2023
Return on Equity 25% 28.8% 25.5% 22% 19% 15%
Return on Assets 5.0% 4.7% 4.2% 3% 3% 2%
Cost to Income Ratio (CIR) 40% 39.0% 41.7% 46.3% 50.2% 56.9%
Growth in customer deposits 15.0% 11.5% 14.2% 22.1% 10.2% 14.2%
Non-performing loans to total loans 4.0% 3.2% 3.1% 4% 5% 4.8%
Growth in loans and advances to
18.0% 28.1% 29.2% 13.3% 14.5% 10.8%
customers
Growth in total assets 18.0% 18.9% 17.8% 22.9% 8.3% 15.4%
Total Capital Adequacy Ratio 20.0% 23.2% 23.1% 24.6% 20.6% 18.5%
Our operational landscape is distinctly defined amidst heightened competition, technological disruptions,
evolving consumer trends, and shifts in regulations. The Bank effectively navigates several significant
concerns within the framework of our ongoing strategic, cultural, and digital advancements.
NMB Integrated Annual Report 2023 | 206
NMB BANK PLC
THE REPORT OF THOSE CHARGED WITH GOVERNANCE (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Total assets of the bank increased to TZS 12.2 trillion (2022: TZS 10.3 trillion); representing 18.9% growth
year on year.
• The Bank’s net loans and advances grew by TZS 1.7 trillion (28.1%) year on year, driven by an
increase in both Retail (15.9% up year on year) and Wholesale loans (87.8% up year on year) on
account of high credit demand in the economy.
• Government securities increased by TZS 330 billion (17.0%), which is attributed to yield improvement
from 8.6% in 2022 to 9.2% in 2023. Placements and balances with banks increased by TZS 150 billion
(80.1%), while cash and balances with the Bank of Tanzania decreased by TZS 210 billion (-13.6%).
The Asset growth was funded by customer deposits, which grew by TZS 870 billion (11.5%) and net
additional borrowings of TZS 631 billion from FMO and BOT.
• There was a decrease in the Bank’s non-earning assets by 8% year on year, mainly attributable to
a decrease in other assets and right-of-use assets, which decreased on account of depreciation.
Property and Equipment, however, increased by TZS 5.7 billion (3%).
• During the year, the Group recorded a net profit after tax of TZS 545.2 billion (2022: TZS 431.6 billion),
while the bank earned a net profit of TZS 541.8 billion (2022: TZS 429.4 billion), an increase of 26.3%
year-on-year. This increase in profit was attributed to growth in net interest income and net fees and
commission income by TZS 225.9 billion and TZS 50 billion respectively. Strong loan disbursements
drove the increase in Net interest income, while the net fees and commission income were driven by
an increase in customer activity coupled with a significant increase in the Bank’s foreign exchange
dealing income.
• The Bank’s total operating income grew 19.0% year on year to TZS 1.3 trillion (2022: TZS 1.1 trillion).
The growth is from the bank’s net interest income, which increased by 18.7% following growth in loans
and advances, while non-interest income increased by 16.5%, attributed to an increase in transaction
volumes in Agency Banking, Mobile Banking (NMB Mkononi), Card Business, and FX Income.
• The Bank’s operating expenses increased moderately by 10.4% during the year due to cost-efficiency
initiatives deployed by the bank during the year on operating and capital expenditures.
• The Bank’s subsidiary, Upanga Joint Venture Company (UJVC) Limited, made a Profit of TZS 2.3
billion (2022: TZS 1.0 billion). The increase in profit is attributable to a decrease in operating expenses.
As of 31 December 2023, its total assets were TZS 43.1 billion (2022: TZS 40.6 billion). Year-on-year
total assets increased by TZS 2.3 billion.
The audited financial statements and Notes for the year 2023 are set out on pages 272 to 411.
CASH FLOW
During the year, the Group used TZS 52 billion (2022 generated: TZS 53 billion) in its operating activities.
This was mainly attributed to the growth of loans and advances to customers by TZS 1.78 trillion (2022:
TZS 1.4 trillion) and the net cash flow used in investments in investing activities was TZS 388 billion
(2022: TZS 248 billion) and cash generated from deposits from customers amounted to TZS 871 billion
(2022: TZS 931 billion) respectively. Bank’s deposits growth reflects industry-wide phenomenon whereby
loans grew faster than deposits. In 2023, banking sector loans grew by 22.8%, while loans grew by
18.6%, indicating negative funding jaws for the industry.
Other major generation of the cash flow was from financing by TZS 441 billion (2022: TZS 150 billion),
while major cash use was mainly in investment in property plant and equipment of TZS 41 billion (2022:
TZS 20 billion) and payment of dividend of TZS 143.1 billion (2022: TZS 96.7 billion).
The Bank’s cash projections indicate that future cash flows will mostly be generated from deposits.
The Bank will continue implementing different strategies to mobilize deposits by targeting individual
depositors, offering competitive rates for fixed deposits, and improving cash collection solutions for
corporate customers, Government institutions, non-Government organizations, and other agencies.
DIVIDEND
As of 31 December 2023, the Bank complied with BOT requirements on dividend payment, specifically
recording a Cost-to-Income Ratio of 39.0% and a Non-Performing Loans ratio of 3.2% against regulatory
requirements of 55% and 5%, respectively. A formal dividend payment proposal considering capital
requirements will be presented in the May 2024 Board meeting. The Annual General Meeting held in
June 2023 approved the Board’s Dividend proposal of TZS 286.25 per share from the total dividend of
TZS 143 billion, which was 1/3 of the profit after tax for the year ended 31 December 2022 in line with the
bank’s dividend payout ratio.
BORROWING
The Bank maintains strong relationships with various Development Finance Institutions (DFIs), who,
through close engagement, continue to demonstrate confidence in the bank by providing us with long-
term facilities in the form of borrowed funds. These funds are used to lend to final beneficiaries to support
overall economic development and the growth of key business segments. As of 31 December 2023, the
Bank’s borrowings balance amounted to TZS 1.4 trillion (2022: TZS 749.6 billion). The Bank complied
with all lender’s covenants as of 31 December 2023 (2022: Compliant).
LIQUIDITY
The Bank’s approach to managing liquidity is to ensure, as far as possible, that it will always have
adequate liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Bank’s reputation. To support adequate levels of
liquidity, the bank has in place arrangements for diversified funding sources in addition to its core deposit
base, manages assets with liquidity in mind, and monitors future cash flows and liquidity daily. The Bank
has developed respective internal control processes and contingency plans for managing liquidity risk.
LIQUIDITY (Continued)
Within the Bank, the Treasury function maintains a portfolio of short-term liquid assets, largely made up
of short-term liquid investment securities, loans and advances to banks and other inter-bank facilities, to
ensure that sufficient liquidity is maintained within the Bank. The daily liquidity position is monitored, and
regular liquidity stress testing is conducted under a variety of scenarios covering both normal and more
severe market conditions. All liquidity policies are subject to review and approval by the Board.
In 2023, the Bank’s Loans to Deposits Ratio (LDR) increased to 94.8% from 82.4% in the previous
year, hence trending above the bank’s internal LDR limit of 75.0%. However, the bank’s Liquid Asset
Ratio (LAR) improved to 33.2% in 2023 from 26.4% in 2022. This is well above the regulatory minimum
threshold of 20.0%.
The Bank’s LDR position was largely contributed by market wide sharp loan velocity compared to deposits
growth. The Bank continues to monitor the trend of these ratios to ensure they are maintained at healthy
levels.
The oversight body actively supervises and sanctions the execution of the Bank’s Key Performance
Indicators (KPIs) aligned with strategic goals. This occurs quarterly through the management’s
presentation of a performance report. This report outlines KPI achievements, potential challenges arising
from internal and external environments, and any support required to attain the established objectives.
- The CEO cascades these KPIs to senior management, engaging in discussions to ensure effective
implementation.
- Senior management disseminates KPIs to department heads, facilitating the creation of departmental
balanced scorecards that align with the bank KPIs.
- Monthly reviews within each department ensure adherence to set KPIs aligned with the bank’s strategic
objectives. Quarterly reports on these reviews are presented to the Board.
- The Board ensures availability of resources necessary for successful KPI implementation.
- The impact, both positive and negative, on stakeholders due to KPI implementation is assessed to
meet their expectations.
Both financial and non-financial KPIs serve as evaluation tools for those overseeing governance,
allowing an assessment of the bank’s performance vis-à-vis its strategic goals.
During the year, there were no changes to either KPIs or the methodologies that needed to be disclosed in the underlying accounting policies adopted in the financial
statements compared to previous financial years. The Bank KPI targets for 2023 are disclosed in note 23 of those charged with governance report.
DEVELOPMENT FOCUS
In 2024, the Bank’s focus remains on sustaining growth and driving revenue momentum. The objective
is to achieve broad-based optimal balance sheet growth and deepen customer relations, contributing
to further revenue growth. The Bank’s strategy, although largely unchanged, will explore new growth
frontiers such as mass account opening, rural banking, bancassurance and digital transactions, presenting
animating opportunities for revenue growth. Additionally, the Bank will maintain its focus on cost discipline,
efficiency, productivity, and portfolio quality, which are areas of distinguished advantage.
The overall macro and business environment outlook remains favourable, further supporting the bank’s
growth optimism. Nonetheless, the Bank remains vigilant of emerging risks and prioritizes greater risk
management and policies to safeguard its business from any potential risks on the horizon. Furthermore,
the Bank will continue to prioritize investments in people, technology, and governance, recognizing
their importance in driving growth. Specifically, the Bank will concentrate on process optimization and
digital investment initiatives which will contribute to the bank’s continued quality growth, particularly in
agribusiness and SME businesses.
In 2024, the Bank committed to investing in capital expenditures of approximately TZS 62 billion (excluding
Core banking System-related costs), an increase from TZS 45 billion in 2022. These investments will be
made in establishing new branches, remodeling existing branches, acquiring equipment, and enhancing
information technology.
The banking industry is undergoing transformative shifts driven by increasing competition, embedded
finance, evolving customer expectations, regulatory dynamics, and disruptive technologies. FinTech
and non-bank startups are reshaping the competitive landscape, prompting traditional institutions to
reconsider their business strategies. Below is a summary of the challenges facing the banking sector and
how NMB is addressing them in order to thrive in this new environment.
• Continuous Innovation: To succeed in the current fast-evolving landscape, banks are required to
embrace innovations that meet customer demands and enhance the overall experience. Investments
in advanced analytics, risk control, and overall digital transformation are also critical in sustaining
the bank’s long-term existence. At NMB, innovation is not only a strategic focus but also one of our
core Values. We continue to innovate in areas of competitive advantage, including overall customer
experience, operational efficiency, analytics, and risk management. The progress we have made in the
innovation space has received domestic and international recognition (see note 22 of Those charged
with Governance Report).
• Emerging Risk - Climate Change: Climate change emerges as a significant risk, impacting the
economy. The bank must assess its effects on strategy and operations while assisting customers and
societies in navigating the complexities of a transitioning market towards a low-carbon economy.
• Increased Competition: Intense competition from digital solutions and embedded finance targeting
lucrative segments is expected to divert revenue from traditional banks. Banks must explore
partnerships and acquisitions to stay competitive while prioritising a streamlined customer experience.
We continue to explore opportunities for inorganic growth whilst continuously leveraging on strategic
partnerships which seek to generate shared value.
• Technology Shift: Manual processes are becoming obsolete in the digital era. Banks must adopt
technology-driven solutions to optimise efficiency. Establishing a culture of innovation is crucial for
leveraging technology to address industry challenges. We continue to invest in our technological
infrastructure, systems, and people to shape our organisation for the fast-evolving digital world.
• Regulatory Compliance: The evolving regulatory landscape poses challenges, requiring banks to incur
additional costs to stay compliant. Overcoming these challenges necessitates fostering a culture of
compliance, implementing formal structures, and staying abreast of regulatory changes.
•
Evolving Customer Expectations: Informed and tech-savvy customers expect personalised and
convenient banking experiences. Millennials prefer digitised interactions, emphasising the need for a
hybrid banking model catering to both older and younger generations. We continuously engage our
customers to identify their needs, and we respond to them through ongoing investments in relevant
products and solutions.
The Bank faces a variety of risks that can impact its short-to-medium-term strategy, including Credit,
Operational, Compliance, Information and Communication Technology (ICT), Market, Liquidity, Strategic,
and Reputational risk.
NMB emphasizes effective risk management principles to align with its objectives. This involves a
continuous review of processes and integrated risk management structures at both operational and
strategic levels. Decision-makers rely on proactive risk management to make informed choices and
address uncertainties. The framework recognizes the role of human and cultural factors, emphasizing
stakeholder engagement throughout the risk management process. The Bank actively takes risks within
defined appetite and tolerance levels, considering regulatory requirements. Risk management is a core
function, with policies and procedures ensuring alignment with best practices.
The overall risk management responsibility lies with those charged with governance (Board). The Board
sets the tone, approves strategies and risk management framework, oversees risk management, and
regularly monitors the risk profile. The senior management team facilitates framework development and
ensures compliance with the policies, laws, and regulations. The focus is on establishing effective internal
controls and maintaining a dynamic approach to identify and address emerging risks.
In our operating setting, unforeseen circumstances create unpredictable uncertainties, posing a risk of
negative economic events. NMB employs a robust risk management process with deployed tools to
address these uncertainties proactively.
The Bank diligently monitors the economic landscape, adapting processes and systems to navigate
changes while ensuring customer protection through enhanced value propositions and strategic
contingencies.
We believe proactive risk prevention adds shareholder value by optimizing earnings, ensuring stability,
and protecting against unexpected losses. Our risk management processes aim to safeguard the bank’s
solvency through high asset quality, efficient operations, and prudent capital management, resulting in
sustained earnings, regulatory compliance, and enhanced market reputation.
TYPES OF RISK
Operational risk
Operational risk arises from inadequate or failed internal processes, people, or systems and external
events, including legal risks. It encompasses a wide range of potential incidents, such as fraud, human
error, technology failures, and natural disasters.
Fraud Risk: A subset of operational risk, both internal and external, is mitigated by stringent controls,
including preventive and detective measures such as a code of ethics and business conduct, policies,
and processes to address fraud incidents.
The Bank implements various measures to mitigate operational risk as part of its Enterprise Risk
Management (ERM) framework:
• People: Code of ethics and business conduct guide staff behaviour and ensure the right skills and
resources are available.
• Processes: Internal policies and procedures, Risk and Control Self Assessments (RCSA), and regular
control evaluations are conducted. Management committees, including the Risk and Compliance
Committee (RCC), discuss risk events and mitigating measures.
• Systems: Investment in new technology platforms improves risk reporting, aggregation, and visibility.
The adoption of international best practices guides the protection of information assets.
Compliance risk
Compliance risk is the current or prospective risk to earnings, capital, and reputation arising from violations
or non-compliance with laws, rules, regulations, agreements, prescribed practices, ethical standards, and
incorrect interpretation of relevant laws or regulations. NMB is exposed to Compliance risk due to its
relations with multiple stakeholders, such as regulators, customers, tax authorities, and other authorized
agencies.
Risk Management Approach: Managed within the bank’s Enterprise Risk Management (ERM) framework,
compliance risk is supported by various policies and procedures aligned with relevant standards and
industry best practices. The Bank ensures regulatory monitoring and assurance reviews to ensure
continuous compliance with internal policies, procedures, guidelines, and regulatory requirements.
NMB uses a range of tools and processes to ensure effective management of Compliance risks.
The Bank adequately oversees the Compliance risks at Senior Management and Board levels. Compliance
risks and issues are escalated and deliberated on in various committees such as the management Risk
and Compliance Committee (RCC), Executive Committee, and Board Audit, and Risk and Compliance
Committee (BARCC).
Credit risk
This is the risk resulting from the possibility that an asset in the form of a monetary claim against a
counterparty may not result in a cash receipt (or equivalent) as per the terms of the contract. The Bank
has robust controls to manage exposure to credit risk, including intensive appraisal, approval process,
disbursement controls, continuous monitoring, collection and recovery, and a robust risk appetite
statement.
Responsible lending is critical to a well-functioning bank. This means considering each customer’s long-
term financing needs, ability to repay and resilience. A range of tools and measures are used to manage
credit risk within the approved risk appetite.
From a governance perspective, the apex credit decision-making committee is the Board of Directors,
which works through the Board Credit Committee and other Management committees, including the
Wholesale Credit Committee, Retail Credit Committee, Loan Portfolio Quality (LPQ) Committee, and
Watchlist and Special Assets Management (SAM) Committee to review credit applications, loan-related
controls, as well as loan portfolio quality. The BARCC reviews compliance with the credit risk appetite
on a quarterly basis. Branches also have some discretion to autonomously approve certain credits up
to closely monitored internal limits. Stress testing is regularly done to monitor the bank’s liquidity and
solvency risks, incorporating stress scenarios for all key risk factors (liquidity, solvency, market, credit,
operational risk, as well as a black swan combined stress scenario), with measures to deal with all stress
outcomes ranging from mild to severe in place.
ICT risk
ICT risk is associated with the use of Information and Communication Technology to support business
processes/standards. It results from inadequate or failed ICT Strategy, ICT Project and Program, or ICT
Operations. The Bank has robust checks in place to limit its exposure to ICT risk and performs regular
monitoring to validate the efficacy of its ICT risk controls.
The Information Technology Risk Management Policy governs the protection of the bank’s information
assets from all threats, whether internal or external, deliberate or accidental, to ensure business
continuity, minimize business damage and maximize return on investments and business opportunities.
The policy’s objective is to protect the bank, its staff, customers, and other third parties from information
risks that have significant likelihoods of occurrence and consequences. The policy also stipulates key
risk management principles with respect to managing IT Risk across the bank, including continuous
assessment and monitoring that is done using key risk indicators, risk and control self-assessments, and
other reviews performed by the second and third line of defence.
Market risk
Market risk is the risk of losses in on- and off-balance sheet positions caused by adverse changes in
market prices, such as interest rates, foreign exchange rates, equity prices, and commodity prices. Market
risk exists in both trading and banking books. A trading book consists of positions in financial instruments
and commodities held either with trading intent or to hedge other elements of the trading book.
Market risk at NMB is overseen day-to-day by the Market Risk Team in close collaboration with the
Treasury team. Several tools are used to control this risk, e.g., system limits, dealer mandates, etc. There
is also close monitoring and tracking of market risk issues in the monthly Asset and Liability Committee
(ALCO) and other key Management Committees.
Stress testing is used to monitor market risks. Four comprehensive rounds of stress testing were
performed in 2023, incorporating stress scenarios for all key risk factors (liquidity, solvency, market,
credit, operational risk, and a black swan combined stress scenario).
Liquidity risk
The risk of having insufficient stable or diverse sources of funding to meet financial obligations as they fall
due, without raising funds at unfavourable rates or resorting to distressed sale of assets or central bank
support.
Liquidity risk at NMB is overseen day-to-day by the Treasury function in close consultation with the Market
Risk team. The bank has deployed various tools to manage this risk, including system limits and dealer
mandates. Liquidity risk issues are closely monitored and tracked via the monthly Asset and Liability
Committee (ALCO) forum.
Stress testing is another tool used to monitor the bank’s liquidity risks. It incorporates stress scenarios for
all key risk factors (liquidity, solvency, market, credit, operational risk, and a black swan combined stress
scenario).
Strategic risk
Strategic risks are the possible losses a business may incur based on decisions made at the strategic level.
These include failures in business strategy or a business plan as they relate to either internal or external
forces. Internal events that could cause the failure of a business strategy include poor communication,
low cash flow, poor execution of stated initiatives, or a change in senior management. External events,
such as changes in consumer demand, new technologies, and new market entrants, can also undermine
a business’s ability to meet its core strategic objectives.
The Bank is focused on executing the Medium-Term Plan. Key risks associated with our long-term growth
aspirations have been identified, and periodic reviews and measurements are performed to provide
assurance.
Reputational risk
The risk is that an activity, action, or stance taken by the bank’s officials will impair its image in the
community and/or the long-term trust placed in the bank by its stakeholders, resulting in the loss of
business or legal actions against the bank. The Bank has stringent reputation risk controls, including very
tight controls on corporate communications and messaging.
The Bank proactively seeks to enhance its overall reputation and manages potential reputational risks
in line with its overall control framework. Reputational risk is monitored and managed through a review
of respective incident reports and assessments, risk and control assessments pertaining to the first and
second lines of defence functions, as well as results of respective surveys covering the bank’s overall
brand health and their respective action plans.
Compliance Non-compliance with laws/ Late submission of returns/ High Severe - could result in Daily monitoring of regulatory changes,
Risk regulations, incorrect payments, fines, and financial losses (penalties staff awareness, conformance tests, and
interpretations, late submissions, penalties. and fines) and reputational engagement with policymakers to resolve
fines, and penalties. damage. jurisdictional contradictions.
Credit Risk Changes in borrowers' Significant increases in High Severe - increases All credit facilities are insured, thorough
environment or business credit risk and default. impairment losses affecting assessment from origination to recovery, and
activities, including borrower profitability and liquidity. continuous monitoring.
death or bankruptcy.
Market Risk Adverse market rate/price Adverse movements in High Severe - impacts Matching sensitivity of assets/liabilities,
movements include interest interest rates, forex, and profitability. diversification of funding sources, and closely
rates, forex, and equity prices. equity prices. monitoring equity price movements.
CLIMATE-RELATED RISKS
The Bank recognizes climate change as one of our planet’s most significant risks. Climate risk is central
to our sustainability agenda at NMB as we look to limit the impacts that result from the transitional or
physical effects of climate change. We continue to work on the measures required to address climate
change, to mitigate our operations’ impact on climate and a transition towards lower-carbon operations
and products.
Climate-related risks have potential negative impacts on the bank’s business and community at large.
The Bank may be exposed to physical risks (risks that arise from severe or acute climatic events and
longer-term shifts in climate patterns) and transition risks (risks that arise from measures taken to mitigate
the effects of climate change and transition to a low-carbon economy).
The Bank has enhanced its Environmental and Social Policy (E&S) framework to address climate-
related risk. The Bank’s Enterprise Risk Management Framework for risk identification, mitigation, and
reporting (including socio-environmental) identifies risk elements and assigns overall mitigation and risk
management responsibilities within the bank. The E&S Policy provides guidance to ensure that climate-
related factors are given due consideration in lending decision-making and clearly articulates mitigants
to address identified climate-related risks. In addition, the policy provides relevant criteria against which
clients and transactions are screened, as well as excluded sectors that the bank will not finance.
So far, the Bank has established a dedicated unit within the credit department to manage Environmental
and Social Risks associated with lending operations.
The Bank continues to strengthen capabilities to support our overall ambitions and deploy relevant tools
that enable the bank to consistently measure and monitor our portfolios and alignment towards supportive
climate efforts. The Bank aims to adopt relevant, applicable standards wherever possible to allow for
compatibility and efficiency across industry peers as much as possible.
Our risk processes enable us to take account of the potential wider implications of our business activities
and products and services on the environment and society.
To assess risks to the environment, to people and to society, NMB pursues a risk-based approach. The
current focus is on lending, capital markets and advisory transactions where NMB plays a significant
role, as opposed to flow trading business, which is more dynamic in nature. Certain industry sectors,
client operations or projects, or financial services have been identified as carrying higher risks and are
prioritized for due diligence.
On this basis, we have identified the client sectors in our portfolio that we believe face the most elevated
exposure to climate risk or present the most significant potential for climate-related opportunities. As a
starting point, we have identified the following sectors:
• Agriculture
• Building and Construction
• Electricity, Oil, and gas
• Manufacturing
• Transport and Communication
Bank’s exposure to identified sectors with elevated levels of climate risk on both its On-Balance and Off-
Balance loan book portfolios.
Sector Loan %
Contribution Climate-Related Risk
to Gross Loan
Amount
"The Network for Greening the Financial System (NGFS) Net Zero 2050
scenario projects an 80% increase in agricultural demand in Africa by 2050.
Despite its contribution to climate change, agriculture is essential to the
Agriculture 8.6%
economy, accounting for over 20% of the GDP, ensuring food security, and
employing over 65% of the population. This underscores the urgent need for
a transition to a sustainable economy to mitigate climate risks."
As the nation progresses, the rate at which buildings and infrastructure
are being constructed also accelerates. According to research
conducted by McKinsey, the construction value chain is directly or
indirectly responsible for nearly 40% of global CO2 emissions from
fuel combustion and 35% of overall greenhouse gas (GHG) emissions.
Building and Cement, the most used construction material worldwide, plays a significant
6.6%
Construction role in contributing to climate change. The chemical and thermal combustion
processes involved in cement production are a major source of carbon
dioxide (CO2) emissions. Annually, over 4 billion tons of cement material are
manufactured, accounting for approximately 8% of global CO2 emissions.
https://www.chathamhouse.org/2018/06/making-concrete-change-
innovation-low-carbon-cement-and-concrete
Energy Sector: The NGFS Net Zero 2050 scenario shows oil & gas demand in Africa
continuing to rise to 2050. Development of Africa’s gas reserves will help
to balance economic development and social upliftment with emissions
Electricity 3.1% reduction, by facilitating the switch from higher emitting energy sources such
as wood and coal, to lower- carbon fuels.
Oil & Gas 6.6%
However, we have identified the energy sector as a sector with elevated
levels of climate risk. The combustion of coal, oil, and natural gas represents
89% of global CO2 emissions.
We have identified the sector as having elevated levels of climate risk, with
global manufacturing and production centers responsible for one-fifth of
carbon emissions according to recent publications.
The Board accepts final responsibility for the bank’s risk management and internal control systems.
It is a responsibility of the Board through delegation to senior management to ensure that adequate
internal financial and operational control systems are developed and maintained on an ongoing basis
to provide reasonable assurance regarding:
• The effectiveness and efficiency of operations.
• The safeguarding of the bank’s assets.
• Compliance with applicable laws and regulations.
• The reliability of accounting records.
• Business sustainability under normal as well as adverse conditions; and
• Responsible behaviours towards all stakeholders.
The efficiency of any internal control system is dependent on the strict observance of prescribed
measures. There is always a risk of non-compliance with such measures by staff. Whilst no system of
internal control can provide absolute assurance against misstatement or losses, the bank’s system is
designed to provide the Board with reasonable assurance that the procedures in place are operating
effectively.
The Board carries out risk and internal control assessment through the Board Audit, Risk and
Compliance Committee. The Board assessed the internal control systems throughout the fiscal year
ended 31 December 2023 and is of the opinion that they met the accepted criteria.
12 TREASURY POLICY
The Bank maintains a well-documented treasury that articulates how various risks arising from
dealings, together with other banking activities, are identified, measured, and managed. These,
among others, include liquidity risk, foreign exchange risk and interest rate risk.
Regulatory ratios and internal limits on the above-stated risks are stipulated in the policy to enable
efficient monitoring of compliance. Moreover, to combat any losses that may result from dealing
activities, the policy allows for the establishment of dealer limits, counterparty limits and stop-loss
limits that are reviewed regularly and kept up to date. The policy also assigns responsibilities for
specific roles, including Treasury staff, the Market Risk unit, the Executive Committee, and members
of the Assets and Liabilities Committee (ALCO).
The Asset and Liabilities Management (ALM) team, in collaboration with the Market risk unit,
provides monthly reports to ALCO to confirm compliance with the policy requirements. From a risk
and governance perspective, the second and third lines of defense are tasked with the governance
responsibility of ensuring bank’s compliance with Policy guidelines. Operationally, any incident where
a guideline has been breached is reported by the treasury functions to the Treasurer, who then
escalates the breach to ALCO members and bank Management for immediate action. The following
sections are covered in the Treasury policy:
Liquidity management evaluates the bank’s ability to meet its commitments as they fall due whilst
maintaining confidence in the market to be able to replace funds when they are withdrawn.
The Bank’s sound and robust liquidity management process, as carried out within the bank and
monitored by ALCO, encompasses the following:
• Day-to-day funding is managed by monitoring future cash flows to ensure that daily obligations
can be met. This includes replenishment of funds as they mature or are borrowed by customers.
The Bank maintains an active presence in money markets to enable this to happen.
• Maintaining a portfolio of highly liquid and marketable securities that can easily be liquidated as
protection against any unforeseen interruption to cash flows.
• Monitoring balance sheet liquidity ratios, i.e., Liquid Asset Ratio (LAR), Loan Deposit Ratio
(LDR) and Long-term Funding Ratio (LTFR) against internal and regulatory requirements.
• Managing the concentration and profile of debt maturities.
• Diversification of depositor base.
• Performing liquidity stress and scenario tests; and
• Maintaining a robust and effective contingency funding plan.
Foreign exchange risk is a current or prospective exposure to earnings and capital arising from
adverse movement in the currency exchange rate. The Treasury policy mainly focuses on foreign
exchange risk that arises from trading activities whose management principles are as outlined below:
• Identification of foreign exchange risks in the trading and banking book.
• Risk appetite specification in the form of limits and triggers.
• Breach management.
• Price validation and profit recognition.
• Sign off positions and profit or loss.
The policy further outlines the roles and responsibilities of ALCO, the Market risk unit and foreign
exchange traders in managing this risk for the bank.
Interest rate risk is the risk that arises from mismatches between the re-pricing dates on interest rate-
sensitive assets and liabilities in the normal course of business activities. Treasury policy explains
the types of interest rate risk together with methods for measuring and managing it. The policy
additionally outlines the roles and responsibilities of ALCO and Treasury in their involvement with
managing the risk. All these are disclosed both internally via reports to ALCO (monthly) and to the
Board Audit Risk and Compliance Committee (BARCC) every quarter and publicly through annual
financial reports.
In addition to liquidity management, the bank manages its interest expenses through regular review
of the fixed deposit rates and other savings account rates, as well as striving to obtain reasonable
and fair borrowing rates from the interbank and multilateral lenders.
All borrowings have been disclosed under notes 35 to the financial statements. Interest rate sensitivity
analysis is disclosed under note 9.2.2.
Treasury policy puts together a contingency funding plan that is aimed at providing a framework
within which an effective plan of action can be put in place in response to an adverse liquidity event.
The plan stipulates:
• The points that will trigger the implementation of the plan.
• Roles and responsibilities of management.
• Team members identified during impending crisis likely to happen in the near term (phase 1)
situation and crisis likely to lead into default within next to 48 hours (phase 2); and
• an updated communication channel during the liquidity crisis.
CAPITAL STRUCTURE
The Bank’s capital structure for the year under review is disclosed in note 37 of the financial statements.
The Banks capital structure for the year under review is as follows:
The capital structure remained consistent with the preceding financial year, indicating stability. The
Bank has maintained a robust capital structure that strikes the right balance between debt and equity
financing providing sufficient funds for growth while minimizing the cost of capital and financial risk. The
conclusion of the fiscal year revealed that a capital ratio stood at 23.25% for Tier 1 and 23.26% for Total
Capital, which is well above the regulatory threshold of 12.5% and 14.5%, respectively. The Bank has
robust strategies in place to continue upholding the solid capital position to support growth ambition and
regulatory compliance. More details are shared under note37 in the financial statements.
FUNDING MIX
The Bank’s primary source of funding during the year was deposits from customers, with focus on current
accounts and savings accounts (CASA), including demand deposits, savings deposits, and time/ fixed
deposits, as sources of funds to finance lending to customers.
Group Bank
Figures in TZS' Million 2023 2022 2023 2022
Equity
Issued Capital 20,000 20,000 20,000 20,000
Retained Earnings 2,066,586 1,664,821 2,062,118 1,663,475
Other Reserves 1,550 1,086 1,550 1,086
Non-Controlling interest 4,441 4,123 - -
Total 2,092,577 1,690,030 2,083,668 1,684,561
Debt
Customer Deposits 8,465,608 7,594,832 8,474,678 7,600,147
Borrowings - Current 333,496 295,440 333,496 295,440
Borrowings - Non-Current 1,046,697 453,914 1,046,697 453,914
Total 9,845,801 8,344,186 9,854,871 8,349,501
Through our wide branch distribution network, enhanced customer propositions, and solid financial
footing, we were able to attract and mobilize a good mix of deposits to support our business growth
ambitions. Customer deposits grew by 11.5% year on year to TZS 8.4 trillion as of December 2023, with
the majority being comprised of low-cost deposits. CASA commands 84.8% of the bank’s total funding,
with the funding mix remaining broadly similar on a year-on-year basis.
Funding Strategy:
Customer deposits serve as the primary and principal source of funding for the bank. This funding
approach prioritizes a diversified and stable funding base, encompassing current/demand, savings, and
time deposits. Ensuring the stability of these deposits is imperative for the bank, which can be achieved
through robust retail banking activities and fostering depositor confidence in the bank’s business strategies
and financial resilience.
To address short-term liquidity needs, the bank engages in borrowing from the interbank market through
transactions with other banks. As part of the contingency funding plan, the bank has established funding
lines with both local and foreign banks, providing flexibility for short-term funding requirements. This
strategy effectively enhances the bank’s adaptability to different liquidity scenarios.
During the year, the Bank obtained additional unsecured borrowing totaling TZS 400 billion through
issuance of three-year Jamii Bond at an interest of 9.5% per annum. The bond was issued in two tranches,
USD amounting to 73 million and TZS amounting to 212.9 billion. The proceeds from these borrowings
will be deployed to facilitate lending to eligible green and social projects.
SOLVENCY
Solvency risk is the risk of insufficient capital available in relation to the amount of capital required to
carry out the NMB’s strategy and to satisfy regulatory capital adequacy requirements. Solvency risk is
monitored and overseen by ALCO and other key Management Committees. The Bank continues to be
adequately capitalized.
Stress Testing:
In adherence to the Bank’s policy, the assessment of liquidity position involves a thorough examination
across various scenarios, with careful consideration given to stress factors affecting both the market
at large and, specifically, the bank. Stress-testing serves as a valuable tool for monitoring the bank’s
solvency risks. In 2023, the Bank conducted four comprehensive rounds of stress-testing, encompassing
stress scenarios for key risk factors such as liquidity, solvency, market conditions, credit, operational risk,
and a combined black swan stress scenario. Stress tests results indicate that the bank remains resilient
against different scenarios, albeit notable challenges under certain extreme scenarios with low likelihood
of occurrence.
Furthermore, stress testing evaluates the impact of a combination of market and specific stress factors
pertinent to the bank. The liquidity mismatch reporting and stress testing results undergo regular reporting
and review processes by the Asset and Liability Committee (ALCO), Executive Committee, and Board
Risk Committee. This thorough evaluation ensures a proactive approach to identifying and mitigating
potential risks, contributing to the bank’s overall risk management framework.
Going Concern:
Those charged with governance confirm that applicable accounting standards have been followed and
that the financial statements have been prepared on a going-concern basis. The Board of Directors has
a reasonable expectation that the bank has adequate resources to continue in operational existence for
the foreseeable future.
NMB Bank Plc is a listed public company under the ticker symbol NMB. NMB Bank PLC is licensed under
the Capital Markets and Securities Act, 1994 to be traded in the Dar Es Salaam Stock Exchange. NMB
Bank Plc. share registration is ISIN: TZ1996100222.
The total number of shareholders as of 31 December 2023 was 17,014 (2022: 17,078). None of the
Directors holds a significant number of NMB shares.
Shareholders by Categories:
Shareholders by Tranche:
No. of
Tranche No. of shares %
shareholders
1 to 200 5,137 654,579 0.13%
201 to 1,000 5,620 3,654,297 0.73%
1,001 to 3,000 2,773 5,476,610 1.10%
3001 to 30,000 3,338 21,690,028 4.34%
30,001 to 400,000 117 11,434,000 2.29%
more than 400,000 29 457,090,486 91.42%
Grant Total 17,014 500,000,000 100%
In 2008 the Bank was listed on the Dar es Salaam Stock Exchange. As of 31 December 2023, NMB was
the largest bank in Tanzania and in the EAC region in terms of market capitalization (TZS 2.250 trillion)
and ranked within top 30 of the largest listed companies in Sub-Saharan Africa (Excluding South Africa).
During 2023, a total of 6,404,816 million NMB shares were traded during the year for a total cash amount
of TZS 26.16 billion. The price per share as of 31 December 2023 was TZS 4,500 (2022: TZS 3,020).
• Since January of 2023, NMB’s share price increased by 49.0% from TZS 3,020 to reach TZS 4,500
at the end of December 2023 (with an all-time-high price of TZS 4,880). This surge in share price has
raised NMB’s market capitalization to TZS 2.25 trillion as of December 2023 from TZS 1.5 trillion in
December 2022, positioning NMB as:
o The Largest listed bank in Tanzania and the entire East Africa (by market capitalization).
• A Total of 6,404,816 NMB shares were traded during the year generating a total of TZS 26.16 billion,
making NMB among the top contributor to total market activities, contributing 12.0% of total market
activities.
Jasiri Bond:
NMB Jasiri bond remains the most liquid corporate bond in the market compared to other listed
corporate bonds. During the year 2023, the NMB Jasiri bond had 76 total transactions with a value of
TZS 904.8 million, traded at an average price of 89.0259; the Yield for Jasiri bond averaged 15.38%.
Jamii Bond:
On the other front, the Jamii bond, which was listed in December 2023, had a total of 3 transactions at a
value of TZS 52 million, traded at an average price of 100 (Par value) with a yield remaining at 9.5%.
Information regarding the trading tickets of listed NMB Corporate bonds in Dar es Salaam Stock Exchange
and Luxemburg Stock Exchange.
15 CORPORATE GOVERNANCE
The Bank is committed to maintaining high standards of corporate governance which enhance performance,
reduce risks, and promote the protection of our shareholders’ interests. The Board recognizes that sound
and effective corporate governance is essential to the long-term success of the organization, creating
trust and ensuring positive relationships with our stakeholders. The Bank has therefore put in place a
comprehensive range of governance committees, policies and procedures designed to ensure alignment
with sound corporate governance practices and principles.
The Board of Directors (“Board”) of NMB sees governance as promoting strategic decision making
that balances short, medium, and long-term outcomes, and safeguarding interests of the Organization,
and its stakeholders. The Board has the overall responsibility for governance and is accountable to its
shareholders.
This Governance report describes how during 2023 the Board has applied the main principles and
complied with the relevant provisions of Guidelines on Corporate Governance Practices by Public Listed
Companies in Tanzania (1994) and the Banking and Financial Institutions (Corporate Governance)
Regulations, 2021.
The Board is committed to the principles of good corporate governance. We regularly review our corporate
governance arrangements and practices and have continued to evolve our governance framework and
underlying governance structures to reflect evolving good corporate governance norms as well as meeting
the needs of the business.
Dedicated to fostering robust corporate governance practices, the Board seeks to strengthen confidence
in the bank, thereby contributing to sustained long-term value for shareholders and other stakeholders.
Acknowledging its collective responsibility for the enduring success of the bank, the Board unwaveringly
commits to compliance with all relevant laws and regulations. Additionally, the Board places a high priority
on adherence to non-binding rules, codes, and standards, with compliance consistently on the agenda for
all Board and Committees’ meetings.
We have undertaken steps to ensure ongoing compliance with the Corporate Governance Code and
related Guidelines during the year. Throughout the year ended 31 December 2023, the Company has
endeavored to apply the core governance principles and to comply with the provisions of the Code
of Conduct. This statement, and the reports from the Board Committees, set out how we applied and
adhered to the Corporate Governance laws, regulations, and standards. The Directors’ report also
contains information required to be disclosed under the Code of Corporate Governance Practices for
Listed Companies (1994) and Disclosure Guidelines and Transparency Rules (DSE Rules, 2022). To the
extent necessary, certain information is incorporated into this Report by reference.
Through the Board Audit, Risk and Compliance Committee, the Board takes a proactive approach to
identifying and monitoring all regulations relevant to the bank, ensuring vigilance toward changes and
new regulations impacting the organization.
The Bank actively embraces effective corporate governance through well-defined governance structures,
recognized as vital support for our capacity to create and preserve value. Our governance approach not
only propels the achievement of strategic objectives but also harmonizes the interests of all stakeholders,
fostering sustainable value creation. Moreover, our Board maintains an unwavering commitment to
advancing corporate governance principles and practices by staying abreast of regulatory changes and
best practices.
Continual improvement in corporate governance principles and practices remains a key focus, ensuring
the bank’s resilience in a dynamic regulatory landscape and adherence to the highest standards of ethical
conduct and responsible business practices.
Our corporate governance framework enables the Board to oversee the strategic direction of the bank, its
financial goals, resource allocation, and risk appetite.
This section details the key corporate governance arrangements and practices of NMB Bank Plc and
its affiliate companies (hereinafter, the “Bank”). The statement sets out the key components of NMB
Bank Plc’s corporate governance framework, which provides guidance to the Board, management and
employees and defines the roles, responsibilities and expected behaviors and conduct standards.
MB operates within a well-defined corporate governance framework, ensuring the delegation of specific
N
mandates and delineating clear lines of responsibility while maintaining the Board’s oversight role. Our
governance philosophy is rooted in our ability to foresee and adeptly respond to changes, serving as a
cornerstone for accelerating our strategic initiatives. This extends to how the Board offers guidance and
supervision. Our governance framework, endorsed by the Board, is integrated into all bank operations,
providing strategic guidance for responsive decision-making, and upholding responsible conduct.
The Board:
NMB is governed by the Board of Directors (“Board”). The appointment of directors is regulated by the
Memorandum and Articles of Association of the Company (MEMARTS), as well as the guidelines issued
by the Bank of Tanzania (BOT) and the Capital Markets and Securities Authority, pursuant to the Banking
and Financial Institutions Act 2006, and the Capital Markets and Securities Act 1994, respectively.
The Board is accountable to the shareholders for the overall bank’s performance and is collectively
responsible for the long-term success of the bank. The Board is responsible and accountable for
providing effective corporate governance, direction, and control of the bank. The Directors have a duty to
exercise leadership, enterprise, integrity, and judgment based on transparency, fairness, accountability,
and responsibility.
The Board is composed of nine Directors, three of whom are Independent Non-Executive Directors.
The Board is assisted in fulfilling its responsibilities by four principal committees: Executive Committee,
Human Resources and Remuneration Committee, Audit, Risk, and Compliance Committee, and Credit
Committee. The Committee charters are reviewed annually to ensure they are aligned with the most
recent version of Corporate Governance Laws, Regulations, and Guidelines and that the Committees
function effectively. The relevant Committee recommends any amendments to the Board.
The Board Charter is reviewed regularly by the Board and provides a clear definition of the roles and
responsibilities of the bank’s Chairman, Directors, and Company Secretary. The roles and responsibilities
of the Board Chairman and the Chief Executive Officer are separate and distinct with a clear division of
responsibility between the running of the Board and the executive responsibility of strategy execution and
running of the business.
The Board Charter is structured to align seamlessly with regulatory frameworks, including but not
limited to the Banking and Financial Institutions Act 2006 (BFIA), CMSA Act & Guidelines, the bank’s
Memorandum and Articles of Association (MEMARTS), and other pertinent legal provisions. Regular
reviews are conducted annually or as deemed necessary to maintain its relevance and ensure consistent
alignment with the Board’s overarching objectives.
In line with good corporate governance practice of annual and regular review of the Board Charter, the
Charter has recently been reviewed and revised to:
1. Align it with prevailing best standards including incorporation of ESG agenda as one of the key
responsibilities of the board to demonstrate our continued commitment to sustainability.
2. Incorporate recommendations for sustainable path to continuous governance improvement, as
informed by periodic Corporate Governance Assessment and Review on the bank.
Revised Board Charter was reviewed by the BARCC and approved by the Board in 2023. The approved
Board Charter further aligns the bank’s governance standards with:
The Board is confident that, in line with the approved Board Charter, no circumstances existed during
the reporting period that impaired the objective judgment of any individual Non-Executive Director. This
commitment to independence reflects the Board’s dedication to ensuring transparency, accountability,
and high standards of corporate governance.
With a view to enhance integrity, ethics, and transparency in governing the affairs of the bank, the Board
of Directors approved the code of conduct for the Board of Directors in August 2023.
The Code has been adopted to set principles and ethical standards for Board Members in connection
with, or having a bearing upon, their status and responsibilities in the bank. It governs Directors’ personal
and professional conduct to ensure the highest ethical standards.
Prior to the adoption of this Code, the conduct of Directors was governed by the NMB Code of Conduct
which was applicable to both employees and Directors of the bank.
Board Structure
To enhance its effectiveness, the Board establishes specialized committees, each assigned specific
duties and responsibilities aimed at supporting and enhancing its functions. These committees serve both
monitoring and advisory roles, recognizing that the Board retains collective responsibility for decision-
making. Every Committee comprises directors possessing relevant skills, and their terms of reference are
meticulously reviewed annually, to ensure ongoing relevance, alignment and compliance with applicable
regulations and best practices.
The Board diligently monitors these responsibilities to guarantee comprehensive coverage and control
over the bank’s operations. Committee Chairs provide regular written and verbal feedback during quarterly
Board meetings. This structured approach reflects our commitment to robust corporate governance and
effective oversight.
The Board is responsible to shareholders for creating and delivering sustainable shareholder value through
the management of the bank’s business. Among our responsibilities are developing and overseeing the
execution of the bank’s strategy within a framework of effective risk management and internal controls,
demonstrating ethical leadership, and upholding corporate governance best practices.
The Board recognizes its duties under the Tanzania’s Companies Act, 2002 (Companies Act, 2002) to
promote the long-term success of the Company, considering not only the views and interests of our
shareholders but also our various stakeholders, such as our employees, our customers, the environment,
and our community.
Each Director individually recognizes that they have a statutory duty to consider and represent the
Company’s various stakeholders in deliberations and decision-making.
The Board delegates authority for the day-to-day management of the business to the CEO. The CEO,
in turn, delegates authority, as permitted under the corporate governance framework, to the Executive
Management of the bank.
The Board held 12 meetings in 2023, 4 ordinary Board meetings and 8 Special Board meetings. As set
forth in the Board Charter, a minimum of four standard meetings must be held annually, with at least
one each quarter. The Board adheres to an established yearly calendar and follows an agenda outlining
topics for discussion. Board members are duly informed of any Changes to the calendar or the agenda of
matters to be discussed.
The role of Board Chairman is separate from that of the Chief Executive Officer. There is a clear division
of responsibilities between the leadership of the Board by the Board Chairman, and the executive
responsibility for day-to-day management of the bank’s business, which is undertaken by the bank’s Chief
Executive Officer.
Board Chairman is responsible for the strategic leadership of the Board and is pivotal in creating conditions
for the overall effectiveness of the Board. The Chairman plays a pivotal role in fostering constructive
dialogue between shareholders, the Board and management at the Annual General Meeting and other
shareholder meetings.
This governance model emphasizes a collaborative leadership approach between the Chairman and
the CEO. A precise division of responsibilities safeguards against unilateral decision-making, fostering
transparency and accountability.
Chairman • R esponsible for leading the Board, its effectiveness and setting high governance
standards.
• Cultivating effective relationships, fostering transparent communication, and
facilitating constructive debates.
• Guiding the board in formulating and determining the bank’s strategic direction and
policies.
• Ensuring the Chief Executive Officer rigorously implements board-approved
strategies and policies.
• Upholding and promoting the highest standards of integrity, probity, and corporate
governance.
• To ensure effective communication with shareholders and, where appropriate, the
stakeholders.
• Upholding rigorous standards of preparation for meetings and ensuring that
decisions by the Board are executed.
Non-Executive • R esponsible for ensuring that the bank has in place proper internal controls as well
Directors as a robust system of risk management.
• To support the development of proposals on strategy, hold management to account
and ensure that they discharge their responsibilities properly, while creating the
right culture to encourage constructive challenge.
Chief • Responsible for the executive responsibility for day-to-day management of the
Executive bank’s business
Officer • Recommending bank strategy to the Board and ensuring that the strategic objectives
and Board’s directives are implemented with the support of the management team.
• Implementing the board-approved strategies and polices as directed by the
Chairman and the Board.
• Conducting the bank’s affairs in strict accordance with board-adopted practices and
procedures, championing integrity and corporate governance excellence.
• Maintaining robust relationships with the Chairman and the Board through regular
reviews of key developments.
Company • Provides support and guidance to the Board in matters relating to governance and
Secretary ethical practices.
• Also responsible for induction programs of new directors, keeping Board members
abreast of relevant changes in legislation and governance principles, and training
for the Board members.
• Provides a link to ensure effective communication between the Board and Chief
Executive Officer.
Director Independence
Director independence is fundamental for effective corporate governance, with the Board relying on
impartial, objective, and independent judgment on all issues under the Board’s remit of consideration.
To ensure Independence, the Board Charter, prepared in line with the Banking and Financial Institutions
(Corporate Governance) Regulations, 2021 issued by the Bank of Tanzania (BOT), provides that;
• All members of the Board shall be Non-Executive Directors, and one third (1/3) shall comprise of
Independent Directors with the requisites experience in Banking, Finance, Accounting, Auditing, Law
or Economics.
• Chairmanship of the Board is reserved exclusively to Non-Executive Directors.
• The Chairman of the Board is restricted from being a member of the Audit Committee or Credit
Committee of the Board.
• The Chairman of the Board is restricted from being a Chairman of any Committee of the Board.
• An independent director is expected to be devoid of any relationships that could potentially impair, or
create the appearance of impairing, their capacity to exercise unbiased judgment.
• Members of the Board Audit, Risk and Compliance Committee (BARCC) are restricted from being a
member of any other Board committee.
Assessing Independence:
When evaluating a director’s independence, the Board meticulously considers all facts and circumstances.
This assessment concentrates on whether the director maintains any relationships, whether direct or
indirect, with the company, senior management, or fellow directors that could impact actual or perceived
independence. This encompasses associations with entities holding substantial business connections
with the company or not-for-profit organizations substantially supported by the company.
The board’s independence undergoes an annual evaluation based on regulations set by the National
Board of Accountants and Auditors, Tanzania (NBAA). Additionally, the regulator, Bank of Tanzania
(BOT), conducts assessments of all Board members. During the year, the Board reflected on the topic
‘independence of mind’, in context of the periodic Board evaluation, and it was identified that throughout
the reporting period, there was neither an incidence where independence of mind was impaired, nor
complaints regarding Board Independence were received by the Board from NBAA.
The Bank enforces a policy wherein directors and employees deemed to possess privileged knowledge of
material facts or changes in the affairs of the bank, undisclosed to the public, are prohibited from buying
or selling (“trading”) bank securities, except in strict adherence to the bank’s policy.
NMB’s Insiders are barred from trading bank securities, whether on their behalf or on behalf of others,
during closed trading windows. It is mandatory for insiders to maintain confidentiality and ensure adequate
protection from unauthorized disclosure or access to any unpublished and non-public sensitive information
received by them in the course of their employment or office.
As prescribed in the bank’s MEMARTS, shareholders with more than a 10% stake in the share capital are
entitled to nominate one director for every 10% of the shares held by them. The names of the nominated
Non-Executive Directors are presented to the Annual General Meeting (AGM) for approval and further
submitted to the Bank of Tanzania for the final vetting and approval.
Directors not nominated by the Shareholders with more than 10% stake in the bank’s share capital, shall
be identified by an independent firm of good repute which shall take action to identify and attract the
best candidates for directorship for the remaining 1/3 of Board positions. Identified candidates will also
undergo interview by the BHRRC and subsequently by the main Board.
Board members are appointed based on merit, and candidates undergo a thorough assessment against
objective criteria, with a keen awareness of the advantages of fostering diversity within the Board. The
appointment process adheres to rigorous standards, especially concerning Directors and specific senior
roles. The Board Charter provides that, in selecting Directors, primary consideration shall be given to the
following guideline qualifications:
• Professional competency.
• Personal qualities and experience.
• Contribution they can make to the smooth running of the Company and its Governance, including the
ability and willingness to commit adequate time to Board and Committee matters.
• Consistency with the standards of independent judgment, ethics, and integrity, which they are expected
to observe.
• Commitment to represent the Company’s shareholders.
The Board recommends Directors for appointment by the shareholders at the Annual General Meetings
(AGMs). Independent Non-Executive Directors (INEDs) shall be appointed as per regulatory requirements.
The current Board structure comprises nine Non-Executive Directors, including the Board Chairman.
The Board determines its size and composition, subject to the Company’s Articles of Association, Board
Charter and applicable guidelines, laws, and regulations.
The Board composition is driven by the following principles, pursuant to the Banking and Financial
Institutions (Corporate Governance) Regulations, 2021 and the international norms of good corporate
Governance:
Succession Planning
Succession planning is an on-going process, with the Board discussing the same regularly and robustly.
The process to appoint a new director (Independent Non-Executive Directors) is overseen by the
Board Human Resources and Remuneration Committee (BHRRC). The Committee is responsible for
recommending the procedure for the selection of new directors, and the proposed criteria for the selection
of candidates with reference to the current mix of skills, knowledge, and experience.
The Committee identifies and nominates a shortlist of candidates and may engage the services of a
professional intermediary (recruitment agent) to assist in identifying and assessing potential candidates.
The preferred candidates meet with the members of the Board Human Resources and Remuneration
Committee before a final decision is made. Prior to confirmation of appointment, all Directors are required
to meet the “Fit and Proper” requirements set out in the Regulatory Guidelines issued by the Bank
of Tanzania. The key terms and conditions of a director’s appointment are documented in a letter of
appointment.
New Board members undergo a comprehensive induction program tailored to familiarize them with the
bank’s business, organizational structure, subsidiaries, the roles of the Board and its committees, strategy,
objectives, policies, procedures, operations, senior management, and the business environment.
The BHRRC is committed to ensuring continuous training and development of its members, addressing
identified needs, and keeping them well-informed on critical information pertinent to the business and
corporate governance environment. An annual review is conducted by the Board to identify training needs
for each member regularly, facilitating upskilling and continuous development.
In 2023, the Board successfully completed planned training and development sessions as follows:
The BHRRC makes an assessment at least once a year to determine whether the Board and Board
committees are performing effectively and identify steps for improvement. We believe that it is important
to obtain an independent perspective on the Board’s performance during execution of a Medium-Term
Plan (3-5 years), and to gain insights on the Board’s performance against peer boards and best practices.
An independent external evaluator is engaged to conduct the Board performance evaluation for the
financial year.
On 29 November 2023, the Board engaged KPMG East Africa, an independent external evaluator, to
conduct the Board performance evaluation for the year 2023. The Board evaluation report was tabled
for discussion in the Board and subsequently submitted to the Bank of Tanzania in January 2024 in
compliance with the Regulator’s requirements. The results of the Board evaluation indicate improvement
in Board’s operations and effectiveness with a score of 92% in 2023 compared with 82% in 2021. The
Board considers the external evaluation report critically and is committed to address all recommendations
to improve effectiveness of the Board in discharging its responsibilities.
Access to Information
Those charged with governance have unrestricted access to timely and comprehensive information
on material strategic, operational, risk management, and financial matters of the bank. The Board
Secretariate, through the Company Secretary, offers guidance on governance matters, and independent
professional advice is accessible when needed, covered by the bank’s expense.
Regular shareholder outreach and ongoing dialogue are essential for effective investor relations. The
Board maintains regular dialogue with analysts and investors, emphasizing transparency in informing
shareholders about the bank’s financial performance. Relevant information is continuously published on
the bank’s website and the Dar es Salaam Stock Exchange website.
The Board recognizes, respects, and protects shareholder rights, ensuring equitable treatment. It provides
shareholders with required information under applicable law and establishes mechanisms for effective
communication, including the media. The Board takes a stakeholder-inclusive approach, considering the
legitimate interests of the bank’s stakeholders in its deliberations, decisions, and actions.
While diverse shareholder interests are considered, the Board acts in the long-term best interests of the
bank and all shareholders, exercising independent judgment.
Examples of the Board’s engagement with the bank’s employees in 2023 included:
• Directors engaged with employees at the Head Quarters, during quarterly Board
meetings.
• Directors engaged with the Branch network during branch visits.
• B oard Chairman held a series of periodic meetings with the Management Team
members, with a view to fostering deepened relations and healthy collaboration
between the Board and the management team.
• The Chief Executive Officer reported to the Board on her engagement with
colleagues, including discussions about strategy, performance, conduct and culture,
and risk governance.
Customers With a view to drive customer centricity agenda, those charged with governance held
several engagements with the bank’s customers.
• T
he Board Chairman met with customers for a variety of reasons, including to hear
customer feedback, and deepen value adding relationship.
• M
anagement provided reports to the Board, which contained updates on client
relations and sentiments, net promoter scores, value generated from key client
relations and related ring-fencing strategies.
COMPOSITION OF THE BOARD OF DIRECTORS DURING THE YEAR ENDED 31 DECEMBER 2023
The Bank is committed to ensuring the overall effectiveness of the Board and that it achieves the appropriate composition and balance of Directors. The Board
is comprised of Non-Executive Directors who bring a diversity of skills, experience, and knowledge to the discussion, and play an important role in supporting
the Board. The Non- executive Directors are expected to have a clear understanding of the strategy of the bank as well as knowledge of the industry and the
operating market.
The Board, through the Human Resources and Remuneration Committee regularly reviews the skills, knowledge, experience, and diversity represented on the
Board against the skills and experience needed to deliver the strategy and continues to make efforts to further diversify.
As of 31 December 2023, the Board comprised the Board Chairman, and eight (8) Non-Executive Directors. One Board position remained vacant during the
year pending recruitment. The table below sets out the roles and responsibilities of the existing directors as at end of the year.
No Name Position Gender Age Nationality Qualification discipline Date of Appointment/ Retired
Appointed on 5 June 2020. Re-appointed
1 Dr. Edwin P. Mhede Chairman Male 45 Tanzanian Economist, CDIoDT
on 2 June 2023
Appointed on 5 June 2020. Re-appointed
2 Juma Kisaame Non-Executive Male 60 Ugandan Banker, CDIoDT
on 2 June 2023
Appointed on 15 June 2019. Re-appointed
3 George Mandepo Non-Executive Male 48 Tanzanian Lawyer, CDIoDT
on 3 June 2022
Appointed on 15 June 2019. Re-appointed
4 Hendrik Reisinger Non-Executive Male 59 Dutch Economist/ Banker
on 3 June 2022
Independent - Non-
5 Benson Mahenya Male 55 Tanzanian CPA (T), CDIoDT Appointed on 15 June 2021
executive
6 Aziz Dachi Non-Executive Male 48 Tanzanian ICT, Auditor, CDIoDT Appointed on 3 June 2022
Independent - Non-
7 Clement Mwinuka Male 60 Tanzanian CPA (T), CDIoDT Appointed on 3 June 2022
Executive
Independent - Non-
8 Ramadhani Mwikalo Male 69 Tanzanian IT Expert, CDIoDT Appointed on 3 June 2022
Executive
The Board expresses confidence in its composition, affirming the presence of an adequate number
of members possessing a diverse mix of skills, experiences, and knowledge. This diversity equips
the Board to effectively challenge and contribute to the development of strategic proposals while also
offering independent judgment on matters related to performance and risk. Notably, the Board includes
Independent Non-Executive Directors who provide unbiased opinions on various board-related matters,
enhancing the overall objectivity and robustness of decision-making processes.
he remuneration for all Directors undergoes an annual assessment to ensure alignment with industry
T
benchmarks in terms of compensation and benefits. Non-Executive Directors are not eligible for pension
scheme enrollment and do not partake in the bank’s remuneration program. The total Board compensation
and remuneration for the year amounted to TZS 1,447 million (2022: TZS 752 million). Further details can
be found in note 43 of the financial statements.
Company Secretary
The Company Secretary as of 31 December 2023, Ms. Mwantumu Salim provides support and guidance
to the Board in matters relating to governance and ethical practices. She is also responsible for induction
programs of new Directors, keeping Board members abreast of relevant changes in legislation and
governance principles changes. The Secretary plays a key role in ensuring good governance by helping
the Board and its Committees to function effectively and in accordance with terms of references and best
practices.
In November 2023, the Board approved the Conflict-of-Interest Policy in compliance with the requirements
of Regulation 20 (2) of the Banking and Financial Institutions (Corporate Governance) Regulations,
2021, that requires the Board to establish policies for identification and monitoring of potential conflicts of
interests.
Those charged with governance are expected to refrain from any action, position, or interest that conflicts
with the bank’s interests or appears to be a potential conflict. In this context, directors are obligated to:
• Declare any interests that might lead to potential or perceived conflicts, such as holding multiple
directorships or having business relationships that could compromise objective judgment.
• Disclose, as soon as they become aware, if a subject to be discussed at a Board or Committee
meeting may result in a conflict of interest. The conflicted director is prohibited from further
participation in the discussion or voting on the matter.
• Consider resigning from the Board if they have a continuing material conflict of interest.
The Board is responsible for evaluating all declared potential or perceived conflicts of interest and
approving appropriate transactions with the bank. The Company Secretary diligently maintains a register
documenting declared conflicts of interest.
During the year, none of the Directors had a material interest, either directly or indirectly, in any significant
contracts with the bank.
16 BOARD COMMITTEES
The Board has delegated authority to various Board committees to enable them to oversee certain specific
responsibilities based on their terms of reference. The terms of reference of each Board Committee set out
the responsibilities of the Board Committee, conduct of meetings including quorum, voting requirements
and qualifications for Board Committee membership. All our Board committees are comprised of Non-
Executive Directors only. Any change to the terms of reference for any Board Committee requires Board
approval. The minutes of Board Committee meetings, which record the key deliberations and decisions
taken during these meetings, are circulated to all Board members for their information.
Mechanisms are in place to facilitate these linkages, including ensuring that there are no gaps or
unnecessary duplications between the remit of each Committee and overlapping membership between
Board committees where necessary. Further details on each committee, including their oversight and
focus during 2023, can be found in the next section of this report.
During the year, the Board had the following Board Committees to ensure a high standard of corporate
governance throughout the bank.
The Committee assists the Board in fulfilling its oversight responsibilities in accordance with the Articles
of Association of the Company. The Committee, which is a steering committee for the full Board, has
an oversight role over the execution of the bank’s strategy, critical key projects of the bank, provides
guidance, supports, and mentors management during transitional periods as well as being involved in any
crisis that may arise within the bank.
It is the general intention that all substantive matters in the ordinary course of business are brought
before the full Board for action and/or ratification, but the Board recognizes the need for flexibility to act
on substantive matters where action may be necessary between Board meetings.
This Committee met four (4) times during the year. It comprised of the following members;
The Committee assists the Board in fulfilling its oversight responsibility relating to the integrity of the
bank’s financial statements and financial reporting process, systems of accounting and financial controls;
the annual external audit of financial statements, reporting and internal controls; performance of the
Internal Audit, Risk and Compliance Functions; compliance with legal and regulatory requirements;
adequacy of the risk management function; the oversight responsibility on planning and conduct of audits
to determine that the bank’s financial statements and disclosures are complete and accurate and are in
accordance with International Financial Reporting Standards and applicable laws, rules and regulations.
Audit Functions:
The BARCC assists the Board by providing oversight of the bank’s financial reporting responsibilities
including external audit independence and performance. The Audit Committee comprises of three Non-
executive Directors. The Committee’s responsibilities include the following:
• Reviewing the quarterly and full- year statutory financial reports for recommendation to the Board.
• Reviewing significant accounting estimates and judgments used for the preparation of the financial
reports.
• Advising the Board on the bank’s financial reporting requirements to ensure that the Board has
exercised oversight of the work carried out by management, Internal Audit Function, and the external
auditor.
• Reviewing and approving any new or proposed changes in the bank accounting policies.
• Monitoring developments in statutory reporting and accounting and disclosure requirements.
• Reviewing the effectiveness of and ensuring that management has appropriate internal controls over
financial reporting.
• Reviewing and monitoring the relationship with the external auditor and oversees its appointment,
tenure, rotation, remuneration, independence, and engagement for non-audit services; and
• Overseeing the work of the Internal Audit and monitoring and assessing the effectiveness, performance,
resourcing, independence and standing of the function.
BARCC also has overall non-executive responsibility for oversight of risk-related matters and the risks
impacting the bank.
Committee’s Functions:
• The critical role of the Committee is to ensure robust succession planning is in place and that the
composition of the Board and its committees continue to evolve, providing effective oversight of the
bank’s strategy.
• To ensure the Bank has a diverse Board comprising individuals with a range of skills, backgrounds,
experience, and perspectives.
• The Committee has oversight of the process by which the Board, its committees and individual
Directors assess their effectiveness.
• The Committee is responsible for Board Members and Senior Executive appointment process.
• The Committee is responsible for overseeing the remuneration of Senior Management, determining
the framework and policies for remuneration and overseeing workforce remuneration, for alignment
of reward, incentives, and culture.
This Committee met four (4) times during the year. It comprised of the following members:
Name Position Nationality Qualification
1 George Mandepo Chairman Tanzanian Lawyer
2 Hendrick Reisinger Member Dutch Economist/ Banker
3 Ramadhani Mwikalo Member Tanzanian IT Expert
The Committee assists the full Board in the management of credit risk by reviewing continuously the
credit portfolio, credit standards, and credit policy.
Committee functions:
• The Committee is tasked with the supervision of the bank’s credit performance.
• It conducts reviews of loans issued, monitors credit metrics, and provides reports on loan
performance.
• The Committee approves credit policies, individual lending authorities, and methodology.
• It evaluates the quality of the credit portfolio and analyses trends that may impact it.
• The Committee also collaborates with other board committees such as the Audit Committee or Risk
Committee. Reviewing and ensuring that the bank complies with regulatory requirements regarding
the grant of credit facilities; and
• Handling such other issues referred to the Committee from time to time by the Board.
NMB Integrated Annual Report 2023 | 246
NMB BANK PLC
THE REPORT OF THOSE CHARGED WITH GOVERNANCE (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
This Committee met ten (10) times during the year. It comprised of the following members:
Name Position Nationality Qualification
1 Hendrik Reisinger Chairman Dutch Economist/ Banker
2 Juma Kisaame Member Ugandan Banker
3 George Mandepo Member Tanzanian Lawyer
The Board held 12 Board meetings during the year out of which 4 were ordinary and 8 were special
meetings. There were also:
• Four (4) Board Executive Committee meetings.
• Eleven (11) Board Audit, Risk and Compliance Committee meetings; and
• Ten (10) Board Credit Committee meetings.
• Four (4) Board Human Resources and Remuneration Committee meetings.
The following table shows the number of Board and Committee meetings held during the year and the
attendance by directors:
The Board adhered to an annual schedule of rolling agenda items designed to ensure that all matters are
considered and reviewed at the appropriate point in the financial and regulatory cycle. The Board had
an extensive agenda during 2022 with considerable focus on reviewing progress of the Medium-Term
Plan (2021-2025) and relevant strategic initiatives, reviewing and approving governance policies and
overseeing performance and risk.
Financial and • Reviewed and approved quarterly, half-year and full-year results.
corporate reporting • Received quarterly financial performance updates.
• Declared proposed dividend in respect of the period ended 31 December 2022.
• Annual Report discussion and updates and recommendations (from the Board
Audit, Risk and Compliance Committee).
• Reviewed and approved the bank’s annual report and accounts.
• Reviewed and approved the notice of AGM.
Strategy and • T he Board received progress and monitored the progress made on key strategic
Business initiatives (under year 3 of MTP) and financial commitment, with the overall
Performance progress on strategy commended across the Board. Board approved rebased
Medium-Term Plan.
• Monitored and assessed the strength of the bank’s capital and liquidity positions.
• Received updates on bank’s performance, including business level performance
updates.
• Reviewed potential scenarios with probable material impact on performance.
• Received an update on the progress of the Operations strategy, including the
focus on Operations re-engineering through Simplification, Automation and
Migration.
• Received an update on the priorities and progress against the cross-border
strategy including a focus on the strategic opportunities and initiatives across
the region.
• Received updates on key projects (e.g. Digital transformation strategy and
related projects).
• Received CSI activities report from the CEO.
• The Board reviewed and approved 2024 Budget and Strategy.
Financial decisions • T he Board approved key financial decisions throughout the year and approved
the Annual Report and Accounts 2022.
• The Board passed a proposed dividend payout of TZS 286.25/- per ordinary
share. A total dividend payout of TZS 143.1 billion was approved by the Board,
which was subject to Shareholders’ approval at the Annual General Meeting.
Governance and • C onsidered external legislative and governance developments and received
Policies regulatory updates.
• The Board continued to oversee the governance, smooth operation, and oversight
of the bank.
• The Board continued to review its skills and experience to ensure it comprises the
relevant skills, experiences, and competencies to discharge its responsibilities
effectively.
• The Board monitored its compliance with the Principles of Good Corporate
Governance Practices and the Companies Act 2002 throughout the year.
• R eviewed and approved bank policies.
- Compliance Risk Management Policy
- Financial Consumer Protection Policy
- Strategic Risk Management Policy
• C onsidered Board and Committees’ effectiveness.
Stakeholder • R
eceived periodic updates from the management on key stakeholder
Engagement engagements.
Sustainability agenda • In line with the multifaceted Board’s role of ensuring that the organization
integrates sustainability considerations into its strategy, operations, and risk
management. The Board received periodic sustainability reports and covered
the topic as part of its discussion agenda.
Main Topic Sub-topic Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Strategy Bank Strategy • • •
CSI & ESG • • • •
Business and Financial Local/Region/global business
• • • •
Performance
Financial performance • • • • •
Other • • • •
Financial Results and accounts • • • •
Dividends •
Bank financial resource
• • •
planning
Risk Risk Function • • • •
Risk Appetite • • • •
Capital and liquidity adequacy • • • •
Regulatory Regulatory and legal matters • • • •
External External Insights • • • •
Technology Strategic and operational • • • •
People and Culture Purpose, engagements • • •
Policies • •
Performance •
Other • • • •
Governance Policies and Terms of Reference • • • •
Board/Committee effectiveness • •
Appointment and succession •
AGM and resolution •
The subsidiary (Upanga Joint Venture Company Limited) is 86.22% owned by the bank. The Board of
Directors (the “Board”) consists of three (3) Directors. Two Directors hold executive positions in the bank.
The Board takes overall responsibility for the company, including responsibility for identifying key risk
areas, considering, and monitoring investment decisions, considering significant financial matters, and
reviewing the performance of management business plans and budgets. The Board is also responsible
for ensuring that a comprehensive system of internal control policies and procedures is operative, and for
compliance with sound corporate governance principles.
The Board is required to meet at least four times a year. The Board delegates the day-to-day management
of the business to the Executive Directors, assisted by parent company professionals in the areas of
accounting and secretarial services as per the management service agreement. No sub-committee has
been formed for the subsidiary Board.
The Management of the Company is under the Executive Directors. Due to the minimal number of
transactions, the Company has no employees. The secretarial and other accounting services have
been outsourced to the parent company as per the management service agreement. As the volume of
transactions increases, the company shall review its structure and fill any identified gaps accordingly.
The following were the Board members of the Upanga Joint Venture Company Limited during the year
ended 31st December 2023
Date
Name Other Key Positions Age Nationality
Appointed
Chief Executive Officer,
1 Ruth Zaipuna 50 Tanzanian 15 July 2021
NMB Bank Plc.
Head; Finance and
2 Robert Mwita Reporting, NMB Bank 41 Tanzanian 15 July 2021
Plc.
Director, Nyumba ya
3 Mafuru Majura Sanaa and Culture 61 Tanzanian 15 July 2021
Limited.
19 EXECUTIVE COMMITTEE
The Management of the Bank is led by the Chief Executive Officer (CEO) assisted by the Executive
Committee (EXCO). Management of the bank at the date of the report consisted of the following:
Treasurer Male MBA, ACI Leads the treasury department and supports the bank in
Aziz Chacha foreign exchange business, investment in securities and
market and liquidity risk management.
Chief Credit Officer Male Bachelor, Overall responsible for all credit department which
Daniel Mbotto* Business includes the appraisal of loans, portfolio management,
Management and collection of bad debts, ensuring a sound portfolio
Finance quality and training of credit department staff.
Certified Lender
Chief Human Resources Male MBA, Certified Overall responsible for development and execution
Officer Reward and of Human Resource strategy in support of the overall
Emmanuel Akonaay HR Practitioner, business plan and strategic direction of the bank and
and a CDIoDT providing the necessary guidance to the HR team in
strategy implementation.
Chief Technology and Male MBA Overall responsible for driving the bank’s digital and
Digital Transformation technology strategy.
Kwame Makundi
Chief Shared Services Female MBA, CDIoDT Overall responsible for shared services support ensuring
Nenyuata Mejooli conducive workplace across the bank, strategically
and operationally managing customer experience,
facilities, Business Continuity Management, operational
transformation, and management and execution of
strategic projects in the bank.
Chief Risk Officer Female MBA Overall responsible for sound monitoring, mitigating,
Doreen Joseph and reporting of the bank’s business risks in line with the
bank’s overall strategic ambitions.
Chief Compliance Officer Male CPA (T) Overall responsible for overseeing compliance
Ezekiel Herman monitoring in line with prevailing internal policies,
procedures, guidelines, and respective laws and
regulations.
Chief Internal Auditor Male ACPA, MSc, Overall responsible for managing Internal Audit and
Benedicto Baragomwa CISA, CDIoDT other assurance activities of the bank and reports to the
Board of Directors.
Acting Chief Credit Officer Male Bachelor of Overall responsible for all credit department which
Nishad Jinah* Science in includes the appraisal of loans, portfolio management,
Banking and and collection of bad debts, ensuring a sound portfolio
Finance quality and training of credit department staff.
Company Secretary Female LLB (Hons), Supporting the Board in ensuring the effective
Mwantumu Salum LLM Certified functioning of the Board and its committees, and
Compliance transparent engagement with senior management.
Officer
*Nishad Jinah was appointed Acting Chief Credit, succeeding Daniel Mbotto, effective from December 2023.
Title KPI
Chief Customers Perspective: The strategic focus on creating a superior customer
Executive experience has led in 2023 to an increase of primary customers of 1.2 million, which is
Officer well above the MTP target. The total number of customers that choose NMB as their
Ruth primary bank is 7.1 million, which is 20% higher than the year-end 2022.
Zaipuna
People Perspective: Create a well engaged workforce with high productivity. Bank’s
engagement scores trend at around 80%, in line with global benchmarks. Productivity
per staff has increased by 15% YoY to TZS 385m/FTE.
Financial Perspective: Drive solid business growth, with sustainable returns and value
creation.
KPI 2023 Actual 2023
Profit After Tax TZS 521 billion TZS 542 billion
Return on Equity 25% 28.8%
Return on Assets 5% 4.7%
NFI Contribution 33% 33.4%
Income Jaws 6% 7.6%
NPL 5% 3.2%
CIR 40% 39%
Sustainability: In line with the bank’s sustainability financing ambitions, the bank issued
a debut sustainable bond instrument of TZS 400 billion (dual tranche bond), dubbed
Jamii Bond. Attracting over 5,608 applicants, the TZS tranche was oversubscribed by
283%, while the dollar tranche also had a historic oversubscription of over 739%. This
historic mobilization makes the Jamii bond, the largest sustainability bond ever issued in
East and Central Africa region. The bond’s net proceeds will be used to finance eligible
green and social assets in line with the bank’s Sustainable Financing Framework (in
adherence to the ICMA Sustainability Bond Guidelines).
Risk and Governance Perspective: The bank maintained a stable risk and control
environment with key risk parameters trending within risk appetite thresholds. There
were no regulatory penalties during the year
The training covers fiduciary duties, responsibilities, and any unique aspects relevant to the business.
The primary goal is to ensure that the management has a clear understanding of their role in corporate
governance, enabling them to exercise sound and objective judgment about the bank’s affairs.
In 2023, the Executive Committee successfully completed planned training and development sessions.
• Central Bank Digital Currency (CBDC) Masterclass
• Customer Experience Operational Excellence
• The 10th Annual Governance Forum
• Africa Investment Event 2023
• Board and EXCO Development Program
• Brazil Study Tour
Annually, the Board conducts a thorough review and approval process for the compensation of key
management personnel. The remuneration for key management personnel in the current year amounted
to TZS 8.2 billion (compared to TZS 7.3 billion in 2022). Further details can be found in note 43 of the
financial statements.
Budget Process
Governing the overall budget process, the Budget and Strategy Guidelines prescribe the overall objectives,
timing, process, and methodologies that were used to formulate the bank’s budget for 2023. The key
objectives for the 2023 budget included providing business and financial commitments within strategic
pillars and optimizing the use of bank resources and productivity.
The Bank adopts a collaborative approach to budget processes, which encompasses a consolidation of
bottom-up and top-down budget processes. The process starts with revenue, NPL and impairment, and
cost budget discussions at the Functional Level. Once a draft is finalized at functional levels, the budget
and strategy document undergo a three-layered approval process, namely;
Performance relative to the budget in 2023 showcased exceptional results and consistent expansion
despite market fluctuations. The Bank’s accomplishments stemmed from effectively aligning planned
activities with the bank’s overarching strategy, prevailing business conditions, and underlying assumptions.
The global dynamics highlighted heightened business challenges; despite that, the bank’s balance sheet
and revenue growth projected in 2023 strategy and budget was driven by:
• Continued focus on account opening, improving digital subscriptions and growth in the channel to
ensure optimal reachability of banking service. Account opening trending at 1.2 million new accounts
and over 8,000 new Wakala were onboarded during the year.
• Improved usage in digital platforms (Mkononi App, NMB Wakala and Internet Banking) and uptake on
value-add products (Mshiko Fasta, Lipa Mkononi and General insurance). This has been highly driven
by consistent digital and insurance campaigns (UMEBIMA & Teleza Kidijitali).
• Strengthened relationships with government, corporates, and SME customers, leading to execution
excellence in both credit and deposit mobilisation.
• Prudence in deals execution to ensure all risks are well mitigated, and the non-performing loan is
maintained below the regulatory limit of 5%.
• Continued investment in Technology and Human Capital through CAPEX investment of about TZS
26.7bn in Technology and capacity building for staff.
• The bank has continued to manage its operations efficiently, closing the year with a Cost to Income
Ratio of 39.0%.
Given the above considerations, the bank’s performance against the budget was as follows:
Our performance has received both domestic and international acclamations. In 2023, NMB Bank
received 31 awards, and recognition for excellent performance, an increase of 35% year-on-year.
SN Awards From
1 Overall, Winner: Largest Taxpayer in Tanzania (All Sectors) Tanzania Revenue Authority
2 Overall, Winner: Most Compliant Taxpayer in Tanzania Tanzania Revenue Authority
3 Largest Taxpayer in the category of Financial Institutions in Tanzania Revenue Authority
Tanzania
4 Best Employer of the Year 2023, Runner-Up in the overall Association of Tanzania Employers
winner category
5 Best Private Sector Employer 2023, Runner-up Association of Tanzania Employers
6 Quality, Productivity, and Innovation Award. Association of Tanzania Employers
7 Best Employer - Gender Equality and Equity Award Association of Tanzania Employers
8 Best Bank in Tanzania 2023 Global Business & Finance
9 Safest Bank in Tanzania 2023 Global Business & Finance Magazine.
10 Best Bank for Digital Solutions in Tanzania Euromoney Awards for Excellence 2023
11 Best Innovation in Retail Banking in Tanzania Global Business Magazine
12 Best Retail Bank Tanzania 2023 International Business Magazine
13 Best Retail Bank Tanzania 2023 Global Business Magazine
14 Best Private Bank in Tanzania International Bankers Awards
15 Best Bank in Tanzania African Banking Awards: EMEA Finance
16 Best Innovation in Retail Banking in Tanzania International Bankers Awards
17 Best SME Bank Tanzania 2023 International Business Magazine
18 Best Investment Ban Tanzania 2023 Global Brands Magazine
19 African’s Banking CEO of the year 2023 (Tanzania) Africa Bank 4.0 Awards
20 Best Bank in Tanzania 2023 Award Africa Bank 4.0 Awards
21 Best Bank for CSR in Tanzania 2023 Euromoney Awards for Excellence 2023
22 Best Corporate Social Responsibility Initiative Tanzania 2023 Global Business & Finance Magazine.
23 Best Commitment to ESG Principles Tanzania 2023 International Banker 2023
24 Best Bank in Tanzania 2023 Euromoney Awards 2023
25 Best Private Bank for High-Net-Worth Individuals in Tanzania Euromoney Private Banking Awards
26 Best Retail Bank Tanzania 2023 Global Banking & Finance Awards
27 SME Financier of the Year Award Global SME Finance Awards 2023.
28 Best SME Bank Tanzania* World Economic Magazine
29 Best ESG Bank Tanzania 2023* World Economic Magazine
30 Best Bancassurance Provider Tanzania 2023* World Economic Magazine
31 Best Banking CEO Tanzania 2023* World Economic Magazine
Education Initiatives
The Bank’s commitment to fostering conducive learning environments in primary and secondary schools
nationwide remained steadfast in the reporting year. A significant milestone was achieved through the
provision of 15,500 desks to 247 schools, benefiting over 46,500 students. Roofing materials were
also supplied to 75 schools, including educational and healthcare facilities, aiding in the completion
of construction and renovation projects. Additionally, 34 schools received 1,480 double-decker beds,
positively impacting 2,960 boarding students. Furthermore, 140 computers were distributed to 25 schools,
addressing fundamental ICT needs for students.
In addition, the NMB Foundation launched the Nuru Yangu Scholarship, which provided sponsorship to
65 students. This initiative involved an expenditure of around TZS 435.5 million, encompassing various
expenses such as tuition fees, health insurance, accommodation, peripherals, and allowances.
Moreover, the Bank allocated TZS 600 million towards the construction of Makunduchi Nursery School.
This noteworthy project was inaugurated by Her Excellency, the President of the United Republic of
Tanzania, HE. Dr. Samia Suluhu Hassan, during the Kizimkazi Festival in August 2023. The project
comprises five classrooms, a playground, a kitchen, and a canteen, with completion anticipated in
February 2024.
Healthcare Support
Investment in quality hospital items, including hospital beds, delivery beds, bedsheets, and blood pressure
machines, underscored the bank’s commitment towards driving universal maternal health coverage. A
total of 55 public health facilities, including prominent institutions like Muhimbili National Hospital, MOI,
Bugando Hospital, and KCMC, received support, benefiting over 300,000 patients.
We successfully handed over the renovation project at Muhimbili National Hospital in 2023, where Minister
of Health, Hon. Ummy Mwalimu, graced the event. We signed the MOU to renovate the maternity block,
which is now called the NMB Maternity block. We spent TZS 350 million towards the renovation of the
maternity block followed by the provision of normal hospital beds, delivery beds, electrical ICU beds, bed
covers, ward separators, blood pressure machines and other important equipment in demand. We have
signed a three-year agreement toward renovation and maintenance of the maternity block.
NMB continued to empower vulnerable groups - youth, women, and small businesses lacking knowledge
and access to financial services. The dissemination of financial literacy extended to school programs and
business club training, reaching over 260,000 youth and adults.
Responding to adverse climate conditions causing disasters, the bank allocated over TZS 70 million for
recovery efforts. Immediate support was extended to victims of heavy floods and landslides in Hanang,
Manyara, and Kilosa in Morogoro. Relief items such as mattresses, blankets, and food were provided.
Additionally, rehabilitation support was extended to Hasnuu Makame Secondary School in Zanzibar,
which was recovering from a fire outbreak, and Mihingo Primary School in Mara, where heavy rains
damaged the roofing.
Assisting individuals with disabilities stands as a pivotal pillar in cultivating a society that is both inclusive
and equitable. Throughout the year, the bank dedicated TZS 17.9 million to procure assistive devices,
extending crucial support to Persons with Disabilities. Our commitment is demonstrated through providing
essential tools such as white canes, sunscreen, wheelchairs, sunhats, and hand magnifiers specifically
designed for individuals with albinism. These efforts aim to generate a positive impact by enriching their
access to vital resources, thereby contributing to an overall improvement in their well-being.
We recognize the contributions of our staff to the creation of value that helps strengthen our business
relations with customers and the communities. NMB encourages a giving culture, and its employees
voluntarily contribute funds to support causes through their own as a means of making a difference in
the community. In 2023, 180 branches and departments participated in community work through the CSI
Matching Up Initiative and positively impacted the lives of over 20,300 people with different needs across
the country.
NMB Equality Initiatives reflect a commitment from Dr Samia Suluhu Hassan, the President of the
United Republic of Tanzania, to spearhead the implementation of the Generation Equality Forum (GEF),
specifically under the second action coalition on Economic Justice and Rights, established in 2021. The
nation is dedicated to achieving milestones in gender equality and women’s empowerment. In September
2021, the Tanzania Generation Equality Program (TGEP) 2021-2026 was inaugurated, with Hon. Angellah
Kairuki appointed as the Chairman and Ms. Ruth Zaipuna, the CEO of NMB Bank, serving as a member
of TGEP.
Within NMB, the NMB Balance initiative drives the agenda. NMB Balance operates as an internal forum,
concentrating on cultivating a workplace environment that nurtures diversity and inclusion. Its primary
focus lies in advancing aspects such as work-life balance, welfare, talent, and skills, reaffirming the
bank’s dedication to establishing an inclusive and equitable environment by harnessing diversity both
within and beyond the organization.
As of July 2023, TGEP marked the midway point in the five-year GEF commitments. The committee,
overseen by the Ministry for Gender, compiled a comprehensive report outlining the progress made,
identifying opportunities, and addressing challenges encountered during the review period. This report
was presented at the UN GEF Summit held in New York on September 17, 2023. Additionally, NMB
submitted a report to the Ministry responsible for Gender, detailing initiatives crafted to uphold Generation
Equality’s commitment.
NMB, through its efforts seek to fulfill its goal of being a strategic ally in the economic, environmental, and
social development of Tanzania. 2 billion was budgeted and approved by the board to embark on climate
change and sustainability projects.
In recognition of our responsibilities as a vehicle for sustainable social-economic prosperity in Tanzania,
our goals extend beyond economic and financial dimensions, to include environmental, social, and
governance challenges. Observing the principles of sustainable banking, NMB as a responsible bank,
aims to promote the United Nations’ Sustainable Development Goals (SDGs) through provision of
products and services and its business operations, all undertaken with a sense of social and environmental
responsibility and stewardship.
ESG Key metrics and progress reproduced from the Annual Report subject to Independent Limited
Assurance:
Governance
Training and Number of bank’s leaders trained on Executive Sustainability 408
Capacity Building
Staff received Senior Women Leadership training in 2022 66
Ethical Standards Number of staff trained on Anti Money Laundering 4005
Number of staff trained on the Code of Conduct 4048
All related party transactions and balances are disclosed in note 43 to the financial statements.
In the opinion of the Directors, there are no serious unfavourable matters that can affect the bank (2022:
NIL).
The Bank did not make any political donations during the year (2022: NIL)
The primary objective of the bank Communication/Public Relations Policy is to ensure that information
originating from the bank is accurate and complete, reflects the official position of the bank, and is released
to the media and targeted public consistently and in a timely manner. The overarching goal is to cultivate
a mutually beneficial relationship between the bank and the public. The Board has established effective
communication channels with the bank’s stakeholders, including the media and other relevant channels.
Key stakeholder communication initiatives encompass the bank’s Annual Report, quarterly financial
reports, Investor presentations, and various publications. Stakeholders can access comprehensive
information, including general details about the bank and its subsidiaries, through the bank’s official
website: www.nmbbank.co.tz. This platform serves as a centralized resource for stakeholders to review
all publications and stay informed about the bank’s activities.
27 ACCOUNTING POLICIES
The material accounting policies of the bank disclosed in Note 6 to the financial statements have been
approved by the Board. The material accounting policies have been updated to reflect the new and
revised International Financial Reporting Standards (IFRSs) in Note 5.
The Bank has an independent Internal Audit function reporting to the Board Audit Risk and Compliance
Committee (BARCC).
This report on Those Charged with Governance complies with the provisions of TFRS-1.
30 REMUNERATION POLICIES
The Bank places a greater emphasis on a well-defined approach to remuneration, encompassing not
only its staff but also its directors. The Remuneration Policy is embedded in the bank’s overarching
strategy and linked to individual performance metrics. This alignment ensures that the policy not only
reflects the current market demands and industry benchmarks but also remains adaptive to the dynamic
nature of the business landscape. To maintain its relevancy and competitiveness, the policy undergoes
a meticulous annual review, providing the necessary flexibility to address emerging trends and evolving
market conditions.
In the customary process, the Management conducts an extensive market survey to prepare a proposal
delineating fees and other emoluments for the Directors. This proposal undergoes a rigorous evaluation
by the Board to ensure alignment with the bank’s strategic objectives and is subsequently presented for
approval at the Annual General Meeting (AGM).
31 WHISTLEBLOWING POLICY
NMB Bank’s Whistleblowing Policy plays a pivotal role in cultivating an unwavering ethical and conduct
culture. The bank is resolutely committed to upholding the pinnacle of standards in ethical and legal conduct
across its projects, programs, and businesses. In perfect alignment with this unwavering commitment
and to underscore its dedication to good governance and transparency, the Policy establishes a well-
structured mechanism for raising concerns related to fraud, corruption, or any other misconduct, without
fear of victimization. Significantly, it ensures unequivocal protection for individuals disclosing information
related to such misconduct, unequivocally shielding them from any form of retaliation.
The policy precisely outlines the procedures for both employees and non-employees to report concerns or
suspicions regarding potential violations of laws, rules, or regulations, as well as suspected wrongdoing in
internal bank policies, standards, or procedures. It is imperative to underscore that the Whistleblower and
Witness Protection Act of 2015 categorically prohibits employers from retaliating against whistleblowers.
Staff members receive periodic training, including during induction and ongoing development, emphatically
underscoring the paramount importance of bringing forth information that profoundly contributes to the
enforcement of sterling corporate governance practices. The bank also provides a dedicated whistleblower
section on its website, where customers and other stakeholders are resolutely encouraged to report
misconduct through a diverse array of channels, whether internal or external. Independent third parties,
known for their impartiality, are readily available for reporting. Importantly, whistleblowers are empowered
with the unequivocal option to disclose their identity or choose to remain anonymous, thereby granting
them a formidable voice in upholding the ethical standards within the bank.
32 RESPONSIBILITIES OF AUDITORS
The auditor is responsible to consider material and consistency of the information in the report of those
charged with governance with the financial statements, or their knowledge obtained in the audit or
otherwise and report any material inconsistency.
33 AUDITORS
Our external auditor (Deloitte & Touche) has been appointed in accordance with Section 170(2) of the
Companies Act, No.12 of 2002 and as per the ‘Banking and Financial Institutions (External Auditors)
Regulation, 2014, section 5. Deloitte & Touche was appointed for a three-year period from 2022 following
a competitive bidding process as required by Banking and Financial Institutions (External Auditors)
Regulation, 2014, subject to annual assessments.
Following assessments for their performance for the year ended 2022, Deloitte & Touche was approved
at the Annual General Meeting held in June 2023 to continue as external auditor for the year ending 2023.
Deloitte & Touche, with PF No 025 and TIN 100-148-692, is an audit firm registered by the National Board
of Accountants and Auditors of Tanzania (NBAA).
It is the solemn duty of those charged with governance to prepare the financial statements of the bank.
These statements are mandated to present a true and fair view, adhering strictly to applicable standards,
rules, regulations, and legal provisions. This responsibility encompasses the entirety of the financial
year, commencing from its initiation until the date of approval of the audited financial statements by
those charged with governance. The obligation extends to all individuals who assumed the role of those
charged with governance at any point during the period covered by the financial statements.
The Companies Act, Cap. 212 (as amended) requires the Directors to prepare financial statements for each
financial year that give a true and fair view of the state of affairs of the bank and of the Group at the end of the
financial year and of the profit or loss for the year. It also requires the Directors to ensure that the bank and its
subsidiary keep proper accounting records that disclose, with reasonable accuracy, the financial position of
the bank and the group. They are also responsible for safeguarding the assets of the bank and the group and
hence taking reasonable steps for the prevention and detection of fraud, error, and other irregularities.
The Directors accept responsibility for the financial statements herein, which have been prepared using
appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity
with the International Financial Reporting Standards (IFRS) and a manner required by the power conferred
upon The Companies Act, Cap. 212 (as amended), and The Banking and Financial Institutions Act, 2006.
he Directors are of the opinion that the financial statements give a true and fair view of the state of the financial
T
affairs and of its operating results of the bank and the Group. The Directors further accept responsibility for the
maintenance of accounting records that may be relied upon in the preparation of financial statements, as well
as designing, implementing, and maintaining internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement whether due to fraud or error.
othing has come to the attention of the Directors to indicate that the bank and the Group will not remain a
N
going concern for at least twelve months from the date of this statement.
The National Board of Accountants and Auditors (NBAA), according to the power conferred under the Auditors
and Accountants (Registration) Act. No. 33 of 1972, as amended by the Act No. 2 of 1995, requires the financial
statements to be accompanied by a declaration issued by the Head of Finance/Accounting responsible for the
preparation of financial statements of the entity concerned.
It is the duty of a Professional Accountant to assist the Board of Directors in discharging the responsibility of
preparing financial statements of an entity showing a true and fair view of the entity’s financial position and
performance in accordance with applicable International Financial Reporting Standards (IFRS) and statutory
financial reporting requirements. Full legal responsibility for the preparation of financial statements rests with
the Board of Directors as per the Statement of Directors’ Responsibility on page 265.
I, Juma A. Kimori, being the Chief Financial Officer of NMB Bank Plc, hereby acknowledge my responsibility of
ensuring that the bank and the group’s financial statements for the year ended 31 December 2023 have been
prepared in compliance with the International Financial Reporting Standards (IFRS), the requirements of the
Companies Act, Cap. 212 (as amended) and the Banking and Financial Institutions Act, 2006.
I thus confirm that the financial statements give a true and fair view of the financial performance of NMB Bank
Plc for the year ended 31 December 2023 and its financial position as of that date and that they have been
prepared based on properly maintained financial records.
Opinion
We have audited the separate financial statements of NMB Bank Plc (the “Bank”) and the consolidated
financial statements of the Bank and its subsidiary (together, the “Group”) set out on pages 272 to 411,
which comprise the consolidated and separate statements of financial position at 31 December 2023 and
consolidated and separate statements of profit or loss and other comprehensive income, consolidated and
separate statements of changes in equity and consolidated and separate statements of cash flows for the
year then ended, and notes to the consolidated and separate financial statements, including a summary
of material accounting policy information.
In our opinion, the accompanying consolidated and separate financial statements give a true and fair view
of the financial position of the Group and of the Bank as at 31 December 2023 and of their financial
performance and cash flows for the year then ended in accordance with International Financial Reporting
Standards (“IFRSs”), the requirements of the Companies Act, 2002 and the Banking and Financial
Institutions Act, 2006.
We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Consolidated and Separate Financial Statements section of our report. We are independent of the
Group and the Bank in accordance with the National Board of Accountants and Auditors (NBAA) Code of
Ethics which is consistent with the International Ethics Standards Board for Accountants’ International
Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code),
together with the ethical requirements that are relevant to our audit of the financial statements in
Tanzania and we have fulfilled our other ethical responsibilities in accordance with these requirements and
the IESBA Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the consolidated and separate financial statements of the current period. These matters were
addressed in the context of our audit of the consolidated and separate financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Other Information
The Directors are responsible for the other information. The other information comprises Index to the
Notes, List of Abbreviations, Corporate Information, The Report of Those Charged With Governance,
Statement of Directors’ Responsibilities and Declaration of the Chief Financial Officer but does not include
the consolidated and separate financial statements and our auditor’s report thereon, which we obtained
prior to the date of this auditor’s report, and the Annual Report, which is expected to be made available to
us after that date.
Our opinion on the consolidated and separate financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated and separate financial statements, our responsibility is to
read the other information identified above and, in doing so, consider whether the other information is
materially inconsistent with the consolidated and separate financial statements, or our knowledge
obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
When we read the Annual Report which will be made available to us after the date of this auditor’s report,
if we conclude that there is a material misstatement therein, we are required to communicate the matter
to those charged with governance.
Responsibilities of the Directors for the Consolidated and Separate Financial Statements
The Directors are responsible for the preparation and fair presentation of the consolidated and separate
financial statements in accordance with International Financial Reporting Standards, the requirements of
the Companies Act, 2002 and the Banking and Financial Institutions Act, 2006, and for such internal control
as the Directors determine is necessary to enable the preparation of consolidated and separate financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated and separate financial statements, the Directors are responsible for assessing
the Group’s and the Bank’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless the Directors either intend to
liquidate the Group and/or Bank or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for overseeing the Bank and the Group’s financial reporting process.
269 | NMB Integrated Annual Report 2023
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a
guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated and separate financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional
skepticism throughout the audit. We also:
● Identify and assess the risks of material misstatement of the consolidated and separate financial
statements, whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
● Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s and the Bank’s internal control.
● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Directors.
● Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s and the Bank’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the consolidated and separate financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Group and the Bank to cease to continue as a going concern.
● Evaluate the overall presentation, structure and content of the consolidated and separate financial
statements, including the disclosures, and whether the consolidated and separate financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
● Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the Group audit. We remain
solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate
threats or safeguards applied.
Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements
(Continued)
From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the consolidated and separate financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
As required by the Companies Act, 2002, we report to you, based on our audit, that:
i) we have obtained all the information and explanations, which to the best of our knowledge and belief,
were necessary for the purpose of our audit;
ii) in our opinion, proper books of account have been kept by the Group and the Bank, so far as appears
from our examination of those books; and
iii) the Bank’s consolidated and separate statement of financial position (balance sheet) and consolidated
and separate statement of profit or loss and other comprehensive income (profit and loss account)
are in agreement with the books of account.
The engagement partner responsible for the audit resulting in this independent auditor’s report is F.J. Kibiki.
28 March 2024
Signed by: F.J. Kibiki
NBAA Registration No. ACPA-PP 3214
Dar es Salaam
Attributable to
Owners of the Bank 544,890 431,531
Non-controlling interests 317 141
Attributable to:
Owners of the Bank 545,354 432,053
Non-controlling interests 317 141
Total comprehensive income for the year 545,671 432,194
TZS/share TZS/share
TZS/share TZS/share
Basic and diluted earnings per share (TZS) 19(b) 1,083.54 858.75
Liabilities
Deposits due to other banks 32 15,008 12,445
Deposits from customers 31(a) 8,465,608 7,594,832
Other liabilities 33(a) 194,044 148,206
Lease liabilities 29(c) 28,844 30,586
Provisions 34 2,431 2,079
Borrowings 35 1,380,193 749,354
Current tax liabilities 18(c) - 5,602
Deferred income tax liability 30(b) 857 1,418
Total liabilities 10,086,985 8,544,522
Capital and reserves
Share capital 37(i) 20,000 20,000
Retained earnings 2,066,586 1,664,821
Fair valuation reserve 37(iii) 1,550 1,086
Capital and reserves attributable to owners of the parent 2,088,136 1,685,907
Non-controlling interest 4,441 4,123
Total equity 2,092,577 1,690,030
The financial statements on pages 272 to 411 were approved and authorised for issue by the Board of
Directors and were signed on its behalf by:
Liabilities
Deposits due to other banks 32 15,008 12,445
Deposits from customers 31(b) 8,474,678 7,600,147
Other liabilities 33(b) 199,706 153,769
Lease liabilities 29(d) 65,193 68,733
Provisions 34 2,431 2,079
Borrowings 35 1,380,193 749,354
Current tax liabilities 18(d) - 5,602
The financial statements on pages 272 to 411 were approved and authorised for issue by the Board of
Directors and were signed on its behalf by:
Share capital Retained Fair valuation Total TZS’ Non- Total equity
TZS’ Millions earnings TZS’ reserve Millions controlling TZS’ Millions
Millions TZS’ Millions interest TZS’
Millions
Comprehensive income
2023 2022*
Note
TZS’ Millions TZS’ Millions
1,172,202 1,277,542
2023 2022*
Note
TZS’ Millions TZS’ Millions
1. REPORTING ENTITY
NMB Bank Plc (the “Bank or “NMB”) is a public limited liability company and is incorporated and domiciled
in the United Republic of Tanzania. The address of its registered office is as disclosed under corporate
information.
The Bank is listed on the Dar es Salaam Stock Exchange (DSE). The Bank has equity investments in
Tanzania Mortgage Refinance Company Limited (TMRC) and a subsidiary company named Upanga Joint
Venture Company (UJVC) Limited.
The Bank’s financial statements and its subsidiary, UJVC (together, the “Group”) consolidated financial
statements for the year ended 31 December 2023 were approved for issue by Those Charged with
Governance on 15 March 2024. Neither the entity’s owners nor others have the power to amend the
financial statements after issue.
2. BASIS OF PREPARATION
The consolidated and separate financial statements have been prepared on a historical cost basis, except
for derivative financial instruments, other financial assets and liabilities held for trading and financial assets
and liabilities designated at fair value through profit or loss (FVPL) and debt and equity instruments at fair
value through other comprehensive income (FVOCI) all of which have been measured at fair value.
These consolidated and separate financial statements are directed at primary users, being investors who
lend or provide equity capital to the reporting entity. These consolidated and separate financial statements
assume that the primary users have a reasonable knowledge of business and economic activities and
review and analyze the information diligently.
In the preparation of financial statements, the Bank has considered the impact of macro-economic
and geopolitical uncertainty especially on areas which need significant estimates and judgements and
considered materiality assessments.
The financial statements are presented in Tanzania shillings (TZS) which is the functional currency, and
the amounts are rounded to the nearest million, except where otherwise indicated.
The Bank has prepared its consolidated and separate financial statements on the basis that it will continue
to operate as a going concern.
3. STATEMENT OF COMPLIANCE
The Group’s consolidated and separate financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations
Committee (IFRS IC) applicable to companies reporting under IFRS. The financial statements comply
with IFRS as issued by the International Accounting Standards Board (IASB).
The Group’s consolidated and separate financial statements, except for cashflow statement, have been
prepared using the accrual basis of accounting.
The preparation of financial statements in accordance with IFRS requires the use of certain critical
accounting estimates. It also requires the Directors to exercise judgement in the process of applying the
Group’s accounting policies.
Changes in assumptions may have a significant impact on the financial statements in the period the
assumptions changed. The Directors believe that the underlying assumptions are appropriate and that
the Group’s financial statements therefore present the financial position and results fairly. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
significant to the financial statements are disclosed in Note 7.
The Consolidated and Bank financial statements of NMB Bank Plc have been prepared in accordance
with International Financial Reporting Standards (IFRS) and interpretations issued by IFRS Interpretations
Committee (IFRS IC) applicable to companies reporting under IFRS. The Consolidated and Bank financial
statements have been prepared under the historical cost convention, as modified by the revaluation of
debt and equity instruments designated at fair value through other comprehensive income.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgment in the process of applying the Group’s
and Bank’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas
where assumptions and estimates are significant to the Consolidated and Bank financial statements are
disclosed in Note 7.
The principal accounting policies applied in the preparation of these consolidated and separate financial
statements are set out below.
(i) New standards and amendments to published standards effective for the year ended 31
December 2023
The following were new and revised IFRSs that have been effective in the current year. The Group’s
and Bank’s application of the new and revised standards did not have material impact on the
disclosures or on the amounts reported to these financial statements.
Amendments to IAS 12 In- In May 2023, the IASB issued narrow-scope amendments to IAS
come taxes: International Tax 12, ‘Income Taxes’. This amendment was introduced in response
Reform – Pillar Two Model to the imminent implementation of the Pillar Two model rules
Rules (issued 23 May 2023) released by the Organization for Economic Co-operation and
Development’s (OECD) as a result of international tax reform.
(i) New standards and amendments to published standards effective for the year ended 31
December 2023 (Continued)
Amendments to IAS The amendments provide a temporary exception from the requirement
12 Income taxes: to recognize and disclose deferred taxes arising from enacted or
International Tax Reform substantively enacted tax law that implements the Pillar Two model
– Pillar Two Model Rules rules. Companies may apply the exception immediately, but disclosure
(issued 23 May 2023) requirements are required for annual periods commencing on or after
(Continued) 1 January 2023.
Amendments to IAS IAS 1 was amended to require companies to disclose their material
1 and IFRS Practice accounting policy information rather than their significant accounting
Statement 2: Making policies. The amendment provided the definition of material accounting
material judgments, policy information. The amendment also clarified that accounting
Disclosure of Accounting policy information is expected to be material if, without it, the users
policies (issued on 12 of the financial statements would be unable to understand other
February 2021 and material information in the financial statements. The amendment
effective for annual provided illustrative examples of accounting policy information that
periods beginning on or is likely to be considered material to the entity’s financial statements.
after 1 January 2023). Further, the amendment to IAS 1 clarified that immaterial accounting
policy information need not be disclosed. However, if it is disclosed, it
should not obscure material accounting policy information. To support
this amendment, IFRS Practice Statement 2, ‘Making Materiality
Judgements’ was also amended to provide guidance on how to apply
the concept of materiality to accounting policy disclosures.
Amendments to IAS 12 The amendments to IAS 12 specify how to account for deferred tax
(issued on 7 May 2021 on transactions such as leases and decommissioning obligations. In
and effective for annual specified circumstances, entities are exempt from recognizing deferred
periods beginning on or tax when they recognize assets or liabilities for the first time. Previously,
after 1 January 2023), there had been some uncertainty about whether the exemption applied
Deferred tax related to to transactions such as leases and decommissioning obligations –
assets and liabilities transactions for which both an asset and a liability are recognized.
arising from a single The amendments clarify that the exemption does not apply and that
transaction. entities are required to recognize deferred tax on such transactions.
The amendments require companies to recognize deferred tax on
transactions that, on initial.
(i) New standards and amendments to published standards effective for the year ended 31
December 2023 (Continued)
Amendments to IAS 12 (issued The amendments require companies to recognize deferred tax on
on 7 May 2021 and effective transactions that, on initial recognition, give rise to equal amounts of
for annual periods beginning taxable and deductible temporary differences.
on or after 1 January 2023),
Deferred tax related to assets The amendment did not have a material impact on these consolidated
and liabilities arising from a and separate financial statements.
single transaction. (Continued)
• E
xpected recovery of insurance acquisition cash flows: An entity
is required to allocate part of the acquisition costs to related
expected contract renewals, and to recognise those costs as an
asset until the entity recognises the contract renewals. Entities are
required to assess the recoverability of the asset at each reporting
date, and to provide specific information about the asset in the
notes to the financial statements.
• C
ontractual service margin attributable to investment services:
Coverage units should be identified, considering the quantity of
benefits and expected period of both insurance coverage and
investment services, for contracts under the variable fee approach
and for other contracts with an ‘investment-return service’ under
the general model. Costs related to investment activities should
be included as cash flows within the boundary of an insurance
contract, to the extent that the entity performs such activities to
enhance benefits from insurance coverage for the policyholder.
(i) New standards and amendments to published standards effective for the year ended 31
December 2023 (Continued)
The adoption of the standard did not have a material impact on these
consolidated and separate financial statements.
IFRS 17 “Insurance Contracts” IFRS 17 replaces IFRS 4, which has given companies dispensation
(issued on 18 May 2017 and to carry on accounting for insurance contracts using existing
effective for annual periods practices. As a consequence, it was difficult for investors to compare
beginning on or after 1 and contrast the financial performance of otherwise similar insurance
January 2023). companies. IFRS 17 is a single principle-based standard to account
for all types of insurance contracts, including reinsurance contracts
that an insurer holds. The standard requires recognition and
measurement of groups of insurance contracts at: (i) a risk-adjusted
present value of the future cash flows (the fulfilment cash flows) that
incorporates all of the available information about the fulfilment cash
flows in a way that is consistent with observable market information;
plus (if this value is a liability) or minus (if this value is an asset) (ii)
an amount representing the unearned profit in
(i) New standards and amendments to published standards effective for the year ended 31
December 2023 (Continued)
IFRS 17 “Insurance the group of contracts (the contractual service margin). Insurers are
Contracts” (issued on 18 May now recognizing the profit from a group of insurance contracts over
2017 and effective for annual the period they provide insurance coverage, and as they are released
periods beginning on or after from risk. If a group of contracts is or becomes loss-making, an entity
1 January 2023). (Continued) recognizes the loss immediately.
Amendments to IAS 8: The amendment did not have a material impact on these consolidated
Definition of Accounting and separate financial statements.
Estimates (issued on 12 The amendment to IAS 8 clarified how companies should distinguish
February 2021 and effective changes in accounting policies from changes in accounting estimates.
for annual periods beginning
on or after 1 January 2023). The amendment did not have a material impact on these consolidated
and separate financial statements.
Transition option for The amendment to the transition requirements in IFRS 17 provides
insurers applying IFRS insurers with an option aimed at improving the usefulness of
17 – Amendments to IFRS information to investors on initial application of IFRS 17. The
17 (issued on 9 December amendment relates to insurers’ transition to IFRS 17 only and
2021 and effective for annual does not affect any other requirements in IFRS 17. The transition
periods beginning on or after requirements in IFRS 17 and IFRS 9 apply at different dates and
1 January 2023). result in the following one-time classification differences in the
comparative information presented on initial application of IFRS
17: accounting mismatches between insurance contract liabilities
measured at current value and any related financial assets
measured at amortized cost; and if an entity chooses to restate
comparative information for IFRS 9, classification differences
between financial assets derecognized in the comparative period (to
which IFRS 9 will not apply) and other financial assets (to which
IFRS 9 will apply). The amendment helps insurers to avoid these
temporary accounting mismatches and, therefore, will improve the
usefulness of comparative information for investors. It does this by
providing insurers with an option for the presentation of comparative
information about financial assets. When initially applying IFRS 17,
entities are, for the purpose of presenting comparative information,
permitted to apply a classification overlay to a financial asset for
which the entity does not restate IFRS 9 comparative information.
The transition option is available, on an instrument-by-instrument
basis; allows an entity to present comparative information as if the
classification and measurement requirements of IFRS 9 had been
applied to that financial asset, but not require an entity to apply the
impairment requirements of IFRS 9; and require an entity that
(i) New standards and amendments to published standards effective for the year ended 31
December 2023 (Continued)
Transition option for applies the classification overlay to a financial asset to use
insurers applying IFRS reasonable and supportable information available at the transition
17 – Amendments to IFRS date to determine how that financial asset is to be classified applying
17 (issued on 9 December IFRS 9
2021 and effective for annual
periods beginning on or after The amendment did not have a material impact on these consolidated
1 January 2023). (Continued) and separate financial statements.
he application of the above amendments had no material impact on the Bank’s consolidated and
T
separate financial statements.
(ii) Impact of new amended standards and interpretations in issues but not yet effective standards
and amendments for the year ended 31 December 2023
Certain new standards and interpretations have been issued that are mandatory for the annual
periods beginning on or after 1 January 2024 or later, and which the Bank has not early adopted.
Amendments to IFRS 16 The amendments relate to the sale and leaseback transactions that
Leases: Lease Liability in a satisfy the requirements in IFRS 15 to be accounted for as a sale.
Sale and Leaseback (issued The amendments require the seller-lessee to subsequently measure
on 22 September 2022 and liabilities arising from the transaction and in a way that it does not
effective for annual periods recognize any gain or loss related to the right of use that it retained.
beginning on or after 1 This means deferral of such a gain even if the obligation is to make
January 2024). variable payments that do not depend on an index or a rate.
Classification of liabilities The Bank is currently assessing the impact of the amendments on
as current or non-current its financial statements.
– Amendments to IAS These amendments clarify that liabilities are classified as either
1 (originally issued on current or non-current, depending on the rights that exist at the
23 January 2020 and end of the reporting period. Liabilities are non-current if the entity
subsequently amended on has a substantive right, at the end of the reporting period, to defer
15 July 2020 and 31 October settlement for at least twelve months. The guidance no longer
2022, ultimately effective for requires such a right to be unconditional. The October 2022
annual periods beginning on amendment established that loan covenants to be complied with
or after 1 January 2024. after the reporting date do not affect the classification of debt
as current or non-current at the reporting date. Management’s
expectations whether they will subsequently exercise the right to
defer settlement do not affect classification of liabilities. A liability
is classified as current if a condition is breached at or before the
reporting.
(ii) New standards and amendments to published standards effective for the year ended 31
December 2023 (Continued)
Classification of liabilities date even if a waiver of that condition is obtained from the lender
as current or non-current after the end of the reporting period. Conversely, a loan is classified
– Amendments to IAS as non-current if a loan covenant is breached only after the reporting
1 (originally issued on date. In addition, the amendments include clarifying the classification
23 January 2020 and requirements for debt a company might settle by converting it into
subsequently amended on equity. ‘Settlement’ is defined as the extinguishment of a liability
15 July 2020 and 31 October with cash, other resources embodying economic benefits or an
2022, ultimately effective for entity’s own equity instruments. There is an exception for convertible
annual periods beginning instruments that might be converted into equity, but only for those
on or after 1 January 2024 instruments where the conversion option is classified as an equity
(continued). instrument as a separate component of a compound financial
instrument.
Amendments to IAS 7
Statement of Cash Flows and The Bank is currently assessing the impact of the amendments on
IFRS 7 Financial Instruments: its financial statements.
Disclosures: Supplier In response to concerns of the users of financial statements about
Finance Arrangements inadequate or misleading disclosure of financing arrangements,
(Issued on 25 May 2023). in May 2023, the IASB issued amendments to IAS 7 and IFRS 7
to require disclosure about entity’s supplier finance arrangements
(SFAs). These amendments require the disclosures of the entity’s
supplier finance arrangements that would enable the users of
financial statements to assess the effects of those arrangements on
the entity’s liabilities and cash flows and on the entity’s exposure to
liquidity risk. The purpose of the additional disclosure requirements is
to enhance the transparency of the supplier’s finance arrangements.
The amendments do not affect recognition or measurement principles
but only disclosure requirements. The new disclosure requirements
will be effective for the annual reporting periods beginning on or after
1 January 2024.
(ii) New standards and amendments to published standards effective for the year ended 31
December 2023 (Continued)
IFRS S2- (Climate-related IFRS S2 - Sets out the requirements for identifying, measuring and
Disclosures) (Continued) disclosing information about climate-related risks and
opportunities that is useful to primary users of general-
purpose financial reports in making decisions relating to
providing resources to the entity
Unless otherwise described above, the new standards and interpretations are not expected to
materially affect the Bank’s consolidated and separate financial statements.
Operating segments are reported in a manner consistent with the internal reporting provided to
the Bank’s Executive Committee, which is the chief operating decision maker. Information about
segment operations is provided under Note 8.
The consolidated financial statements incorporate the financial statements of the Bank and an entity
controlled by the Bank, Upanga Joint Venture Company (UJVC) Limited (its subsidiary). The financial
statements of the Bank and its subsidiary are made up to 31 December 2023.
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Bank has control. The
Bank controls an entity when the Bank is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the
entity. Subsidiaries are fully consolidated from the date on which control is transferred to the
Bank. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the
Bank. Intercompany transactions, balances and unrealized gains on transactions between
Group companies are eliminated. Unrealized losses are also eliminated unless the transaction
provides evidence of an impairment of the transferred asset.
The accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Bank.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the
consolidated statement of profit or loss and other comprehensive income, statement of changes
in equity and statement of financial position respectively.
The Bank treats transactions with non-controlling interests that do not result in a loss of control
as transactions with equity owners of the Bank. A change in ownership interest results in an
adjustment between the carrying amounts of the controlling and non-controlling interests
to reflect their relative interests in the subsidiary. Any difference between the amount of the
adjustment to non-controlling interests and any consideration paid or received is recognized in
a separate reserve within equity attributable to owners of the Bank.
When the Bank ceases to have control, any retained interest in the entity is re-measured to its
fair value at the date when control is lost, with the change in carrying amount recognized in profit
or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting
for the retained interest as an associate, joint venture or financial asset. In addition, any amounts
previously recognized in other comprehensive income in respect of that entity are accounted
for as if the Bank had directly disposed of the related assets or liabilities. This may mean that
amounts previously recognized in other comprehensive income are reclassified to profit or loss.
In the separate financial statements, investment in the subsidiary is accounted for at cost less
impairment.
Interest income is calculated by applying the effective interest rate to the gross carrying amount of
financial assets, except for:
(i) Purchased or originated credit-impaired (POCI) financial assets, for which the original credit –
adjusted effective interest rate is applied to the amortised cost of the financial asset.
(ii) Financial assets that are not ‘POCI’ but have subsequently become credit-impaired (or stage 3),
for which interest revenue is calculated by applying the effective interest rate to their amortised
cost (i.e. net of the expected credit loss provision).
Interest income and expense for all interest-bearing financial instruments are recognized within ‘interest
income’ or ‘interest expense’ in profit or loss using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial asset or a
financial liability and of allocating the interest income or interest expense over the relevant period. The
effective interest rate is the rate that exactly discounts estimated future cash payments or receipts throug
the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying
amount of the financial asset or financial liability. The calculation includes all fees paid or received between
parties to the contract that are an integral part of the effective interest rate, transaction costs and all other
premiums or discounts.
Once a financial asset or a group of similar financial assets has been written down as a result of an
impairment loss, interest income is recognized using the rate of interest used to discount the future cash
flows for the purpose of measuring the impairment loss.
Fees integral to the effective interest rate include origination fees received or paid by the entity relating
to the creation or acquisition of a financial asset or issuance of a financial liability, for example fees for
evaluating creditworthiness, evaluating and recording guarantees or collateral, negotiating the terms of
the instrument and for processing transaction documents. Commitment fees received by the Bank to
originate loans at market interest rates are integral to the effective interest rate if it is probable that the
Bank will enter into a specific lending arrangement and does not expect to sell the resulting loan shortly
after origination. The Bank does not designate loan commitments as financial liabilities at fair value
through profit or loss.
Fees and commission on other services such as ATMs, MNO, Agency banking and bancassurance
are recognized at an amount which reflects the consideration which the Bank expects to be entitled in
exchange for providing the services. All fees and commissions are generally recognized on an accrual
basis when the service has been provided. The performance obligations, as well as the timing of their
satisfaction, are identified, and determined, at the inception of the contract. Commitment fees for loans
that are likely to be drawn down are deferred (together with related direct costs) and recognized as an
adjustment to the effective interest rate on the loan.
Loan syndication fees are recognized as revenue when the syndication has been completed and the
Bank has retained no part of the loan package for itself or has retained a part at the same effective
interest rate as the other participants. Commission and fees arising from negotiating, or participating
in the negotiation of, a transaction for a third party - such as the arrangement of the acquisition of
shares or other securities, or the purchase or sale of businesses - are recognized on completion of
the underlying transaction.
Items included in the financial statements of the Group and the Bank are measured using the currency
of the primary economic environment in which the Group and the Bank operate (the “functional
currency”). The financial statements are presented in Tanzania Shillings (TZS) rounded to the nearest
million, which is the Group and Bank’s functional currency.
Foreign currency transactions are translated into Tanzania Shillings using the exchange rates
prevailing at the dates of the transactions. Monetary items denominated in foreign currency are
translated with the closing rate as at the reporting date. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognized in the profit or loss.
All other foreign exchange gains and losses are presented in the statement of profit or loss and other
comprehensive income on a net basis within other income or other expenses.
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions of the instruments. Regular way purchases and sales of financial assets are
recognised on trade – date on which the Bank and Group commits to purchase or sell the asset.
At initial recognition, the Group measures a financial asset or financial liability at its fair value plus
or minus in the case of a financial asset or financial liability not a fair value through profit or loss,
transaction costs that are incremental and directly attributable to the acquisition or issue of the
financial asset or financial liability, such as fees and commissions. Transaction costs of financial assets
and liabilities carried at fair value through profit or loss are expensed in profit or loss. Immediately
after initial recognition, an expected credit loss allowance (ECL) is recognised for financial assets
measured at amortised cost and investments in debts instruments measured at FVOCI, which results
in an accounting loss being recognised in profit or loss when an asset is newly originated.
When the fair value of financial assets and liabilities differs from the transaction price on initial
recognition, the entity recognises the difference as follows:
(i) When the fair value is evidenced by a quoted price in an active market for an identical asset or
liability (i.e. a level 1 input) or based on a valuation technique that uses only data from observable
markets, the difference is recognised as a gain or loss in other comprehensive income.
(ii) In all other cases, the difference is deferred, and the timing or recognition of deferred day one
profit or loss is determined individually. It is either amortised over the life of the instrument,
deferred until the instrument’s fair value can be determined using market observable inputs, or
realised through settlement.
Financial Assets
The Group classifies its financial assets in the following measurement categories:
• Fair Value through profit or loss (FVPL);
• Fair Value through Other Comprehensive Income (FVOCI); and
• Amortised cost.
The classification requirements for debts and equity instruments are described below:
Debt instruments
Debt instruments are those instruments that meet the definition of a financial liability from the issuer’s
perspective, such as loans, government and corporate bonds and trade receivables purchased from
clients in factoring arrangements without recourse.
(i) The Group’s business model for managing the asset; and
(ii) The cash flow characteristics of the asset.
Based on these factors, the Bank and Group classifies its debt instruments into one of the
following three measurement categories:
Amortised cost: Assets that are held for collection of contractual cash flows where those cash
•
flows represent solely payments of principal and interest (‘SPPI’), and that are not designated
at FVPL, are measured at amortised cost. The carrying amount of these assets is adjusted by
any expected credit loss allowance recognised and measured as described in note 9. Interest
income from these financial assets is included in ‘Interest income’ using effective interest rate
method.
Fair value through other comprehensive income (FVOCI): Financial assets that are held
•
for collection of contractual cash flows and for selling the assets, where the assets’ cash flows
represent solely payments of principals and interest, and that are not designated at FVPL,
are measured at fair value through other comprehensive income (FVOCI). Movements in the
carrying amount are taken through OCI, except for the recognition of impairment gains or
losses, interest revenue and foreign exchange gains and losses on the instrument’s amortised
cost which are recognised in profit and loss. When the financial asset is derecognised, interest
income from these financial assets is included in ‘interest income’ using the effective interest
rate method.
Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or
•
FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment
that is subsequently measured at fair value through profit or loss and is not part of a hedging
relationship is recognised in profit or loss and presented in the profit or loss statement within
‘Net trading income’ in the period in which it arises, unless it arises from debt instruments
that were designated at fair value or which are not held for trading, in which case they are
presented separately in ‘Net investment income’. Interest income from these financial assets
is included in interest income’ using the effective interest rate method.
Business model: the business model reflects how the Bank and Group manages the assets
in order to generate cash flows. That is, whether the Bank’s and Group’s objective is solely
to collect the contractual cash flows from the assets or is to collect both the contractual cash
flows and cash flows arising from the sale of the assets. If neither of these is applicable (e.g.
financial assets are held for trading purposes), then the financial assets are classified as
part of ‘other’ business model and measured at FVPL. Factors considered by the Group in
determining the business model for group of assets include past experience on how the cash
flows for these assets were collected, how the asset’s performance is evaluated and reported
to key management personnel, how risks are assessed and managed and how managers are
compensated. For example, the Bank’s and Group’s business model for the mortgage loan book
is to hold to collect contractual cash flows, with sales of loans only being made internally to a
consolidated SPV for the purpose of collateralising notes issued, with no resulting derecognition
by the Bank and Group. Another example is the liquidity portfolio of assets, which are held by
the Bank and Group as part of liquidity management and is generally classified within the hold to
collect and sell business model. Securities held for trading are held principally for the purposes
of selling in the near term or are part of a portfolio of financial instruments that are managed
together and for which there is evidence of a recent actual pattern of short-term profit taking.
These securities are classified in the ‘other’ business model and measured at FVPL.
SPPI: Where the business model is to hold assets to collect contractual cash flows or to collect
contractual cash flows and sell, the Bank and Group assesses whether the financial instruments’
cash flows represent solely payments of principals and interest (the SPPI test’). In making this
assessment, the Group considers whether the contractual cash flows are consistent with a
basic lending arrangement i.e. interest includes only consideration for the time value of money,
credit risk, other basic lending risks and a profit margin that is consistent with a basic lending
arrangement. Where the contractual terms introduce exposures to risk or volatility that are
inconsistent with a basic lending arrangement, the related financial assets are classified and
measured at fair value through profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining
whether their cash flows are solely payments of principal and interest.
The Bank and Group reclassifies debts investments when and only when its business model
for managing those assets changes. The reclassification takes place from the start of the first
reporting period following the change. Such changes are expected to be very infrequent, and
none occurred during the period.
Equity instruments
Equity instruments are instruments that meet the definition of equity from the issuer’s perspective;
that is, instruments that do not contain a contractual obligation to pay and that evidence a
residual interest in the issuer’s net assets. Example of equity instruments include basic ordinary
shares.
The Group subsequently measures all equity investments at fair value through profit or loss,
except where the Group’s management has elected, at initial recognition, to irrevocably designate
an equity investment at fair value through other comprehensive income. The Group’s policy is
to designate equity investments as FVOCI when those investments are held for purposes other
than to generate investment returns. When this election is used, fair value gains and losses are
recognised in OCI and are not subsequently reclassified to profit or loss, including on disposal.
Impairment losses (and reversal of impairment losses) are not reported separately from other
changes in fair value. Dividends, when representing a return on such investments, continue to
be recognised in profit or loss as other income when the Group’s right to receive payments is
established.
Gains and losses on equity investments at FVPL are included in the ‘Net trading income’ line in
the statement or profit or loss.
(ii) Impairment
The Group assesses on a forward-looking basis the expected credit losses (‘ECL’) associated
with its debt instruments assets carried at amortised cost and FVOCI and with the exposure
arising from loan commitments and financial guarantee contracts. The Group recognises a loss
allowance for such losses at each reporting date. The measurement of ECL reflects:
• An unbiased and probability – weighted amount that is determined by evaluating a range of
possible outcomes.
• The time value of money; and
• Reasonable and supportable information that is available without undue cost or efforts at
the reporting date about past events, current conditions and forecast of future economic
conditions.
Details of the Group’s impairment policy and disclosures are provided under Note 9.1.3 and
9.1.5.
The Group sometimes renegotiates or otherwise modifies the contractual cash flows of loans
to customers. When this happens, the Group assesses whether or not the new terms are
substantially different to the original terms. The Group does this by considering, among others,
the following factors:
• If the borrower is in financial difficulty, whether the modification merely reduces the contractual
cash flows to amounts the borrower is expected to be able to pay.
• Whether any substantially new terms are introduced, such as a profit share/equity- based
return that substantially affects the risk profile of the loan.
• Significant extension of the loan term when the borrower is not in financial difficulty.
• Significant changes in the interest rate.
• Change in the currency the loan is denominated in.
• Insertion of collateral, other security or credit enhancements that significantly affects the credit
risk associated with the loan.
If the terms are substantially different, the Group derecognises the original financial asset and
recognises a ‘new’ asset at fair value and recalculates a new effective interest rate for the asset.
The date of renegotiation is consequently considered to be the date of the initial recognition
for impairment calculation purposes, including for the purposes of determining whether a
significant increase in credit risk has occurred. However, the Group also assesses whether the
new financial asset recognised is deemed to be credit-impaired at initial recognition, especially
in circumstances where the renegotiation was driven by the debtor being unable to make the
originally agreed payments. Differences in the carrying amount are also recognised in profit or
loss as gains or loss on derecognition.
If the terms are not substantially different, the renegotiation or modification does not result in
derecognition, and the Group recalculates the gross carrying amount based on the revised cash
flows of the financial asset and recognises a modification gain or loss in profit or loss. The new
gross carrying amount is recalculated by discounting the modified cash flows at the original
effective interest (or credit-adjusted effective interest rate for purchased or originated credit-
impaired financial assets).
The risk of default of such assets after modification is assessed at the reporting date and
compared with the risk under the original terms at initial recognition, when the modification is not
substantial and so does not result in derecognition of the original asset. The Bank monitors the
subsequent performance of modified assets. The Bank may determine that the credit risk has
significantly improved after restructuring, so that the assets are moved from Stage 3 or Stage 2
(Lifetime ECL) to Stage 1 (12-month ECL). The loan will remain in its original stage until it meets
the criteria as described in Note 6 (f) (iv) on the next page.
An instrument is considered to no longer have SICR or be in default (i.e. to have cured) when it
has been established that the obligor is able to meet the requirements of the agreed terms and
conditions.
IFRS 9 allows credit exposures to migrate from higher credit risk categories to lower credit risk
categories, that is, from stage 3 to stage 2 and from stage 2 to stage 1.
Under migration from stage 3 to stage 2, the Bank shall consider criteria for upgrade of credit
accommodations as follows:
i. in the case of overdraft facilities, the account has satisfactorily performed for a minimum period
of two consecutive quarters; and
ii. In the case of term loans, the obligor has timely paid four consecutive installments.
On the other hand, credit exposures may migrate from stage 2 to stage 1 when there is a significant
improvement of the credit exposure. In determining whether an exposure should shift backward from
stage 2 to stage 1, The Bank shall consider the following;
i. All outstanding payments on the credit facility are made on time and there are no payments in
arrears.
ii. There is improvement of the quantitative and qualitative factors that caused significant increase
of the credit risk.
Upgrade from stage 2 to stage 1 shall be subject to a monitoring period of 90 days for conventional
loans and 30 days for Microfinance loans to confirm if the risk of default has decreased sufficiently
before upgrading such exposure.
Financial assets, or a portion thereof, are derecognized when the contractual rights to receive the
cash flows from the assets have expired, or when they have been transferred and either (i) the Group
transfers substantially all the risks and rewards of ownership, or (ii) the Group neither transfers nor
retains substantially all the risks and rewards of ownership and the Group has not retained control.
The Group enters into transactions where it retains the contractual rights to receive cash flows from
assets but assumes a contractual obligation to pay those cash flows to other entities and transfers
substantially all of the risks and rewards. These transactions are accounted for as ‘pass through’
transfers that result in derecognition if the Group:
i) Has no obligation to make payments unless it collects equivalent amounts from the assets;
ii) Is prohibited from selling or pledging the assets; and
iii) Has an obligation to remit any cash it collects from the assets without material delay
Collateral (shares and bonds) furnished by the Group under standard repurchase agreements and
securities lending and borrowing transactions are not derecognized because the Group retains
substantially all the risks and rewards on the basis of the predetermined repurchase price, and the
criteria for derecognition are therefore not met. This also applies to certain securitization transactions
in which the Group retains a subordinated residual interest.
Financial Liabilities
In both the current and prior period, financial liabilities are classified as subsequently measured
at amortized cost, except for:
• Financial liabilities at fair value through profit or loss: this classification is applied to derivatives
financial liabilities held for trading (e.g. short positions in the trading booking) and other financial
liabilities designated as such at initial recognition. Gains or losses on financial liabilities
designated at fair value through profit or loss are presented partially in other comprehensive
income (the amount of change in the fair value of the financial liability that is attributable
to changes in the credit risk of that liability, which is determined as the amount that is not
attributable to Changes in market conditions that give rise to market risk) and partially in profit
or loss (the remaining amount of change in the fair value of the liability). This is unless such a
presentation would create, or enlarge, an accounting mismatch, in which case the gains and
losses attributable to changes in the credit risk of the liability are also presented in profit or
loss;
• Financial liabilities arising from the transfer of financial assets which did not qualify for
derecognition, whereby a financial liability is recognised for the consideration received for the
transfer. In subsequent periods, the Group recognises any expense incurred on the financial
liability; and
(ii) Derecognition
Financial liabilities are derecognized when they are extinguished (i.e. when the obligation
specified in the contract is discharged, cancelled or expires).
The exchange between the Group and its original lenders of debt instruments with substantially
different terms, as well as substantial modifications of the terms of existing financial liabilities,
are accounted for as an extinguishment of the original financial liability and the recognition of a
new financial liability. The terms are substantially different if the discounted present value of the
cash flows under the new terms, including any fees paid net of any fees received and discounted
using the original effective interest rate, is at least 10% different from the discounted present
value of the remaining cash flows of the original financial liability. In addition, other qualitative
factors, such as the currency that the instrument is denominated in, changes in the type of
interest rate, new conversion features attached to the instrument and change in covenants are
also taken into consideration. If an exchange of debt instruments or modification of terms is
accounted for as an extinguishment, any costs or fees incurred are recognized as part of the
gain or loss on the extinguishment. If the exchange or modification is not accounted for as an
extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are
amortized over the remaining term of the modified liability.
Financial guarantee contracts are contracts that require the issuer to make specific payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payments when
due, in accordance with the terms of a debts instrument. Such financial guarantees are given
to banks, financial institutions and others on behalf of customers to secure loans, overdraft and
other banking facilities.
Financial guarantee contracts are initially measured at fair value and subsequently measured at
the higher of:
Loan commitments provided by the Group are measured as the amount of the loss allowance.
The Group has not provided any commitment to provide loans at a below-market interest rate,
or that can be settled net in cash or by delivering or issuing another financial instrument.
For loan commitments and financial guarantee contracts, the loss allowance is recognised as
a provision. However, for contracts that include both a loan and an undrawn commitment and
the Group cannot separately identify the expected credit losses on the undrawn commitment
component from those on the loan component, the expected credit losses on the undrawn
commitment are recognised together with the loss allowance for the loan. To the extent that the
combined expected credit losses exceed the gross carrying amount of the loan, the expected
credit losses are recognised as provision.
Financial assets and liabilities are offset, and the net amount reported in the statement of financial
position when there is a legally enforceable right to set off the recognized amounts and there is an
intention to settle on a net basis or realize the asset and settle the liability simultaneously.
Financial guarantees
Financial guarantees are initially recognized in the consolidated and Bank financial statements at
fair value on the date the guarantee was given. The fair value of a financial guarantee at the time
of signature is zero because all guarantees are agreed on arm’s length terms and the value of the
premium agreed corresponds to the value of the guaranteed obligation.
Acceptances and letters of credit are accounted for as off-balance sheet transactions and disclosed
as contingent liabilities.
Undrawn commitments
These are commitments the Bank has made to extend credit to customers and are accounted for as
off-balance sheet transactions and disclosed as contingent liabilities.
(j) Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are
subsequently carried at amortized cost; the difference between the proceeds (net of transaction
costs) and the redemption value is recognized in profit or loss over the period of the borrowings using
the effective interest method.
Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to
the extent that it is probable that some or all the facility will be drawn down. In this case, the fee is
deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some
or all the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and
amortized over the period of the facility to which it relates. The valuation gain and losses on the
borrowings are recognized as part of foreign exchange income in the statement of profit and loss.
The income tax expense for the period is the tax payable on the current period’s taxable income
based on the applicable income tax rate in accordance with the Income Tax Act, 2004 adjusted by
changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax
losses.
The current income tax charge is calculated based on the tax laws enacted or substantively enacted at
the end of the reporting period in Tanzania where the Bank and its subsidiary operate and generates
taxable income. Management periodically evaluates positions taken in tax returns with respect to
situations in accordance with the Income Tax Act, 2004 interpretation. It establishes provisions where
appropriate based on amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition
of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an
asset or liability in a transaction other than a business combination that at the time of the transaction
affects neither accounting nor taxable profit. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by the end of the reporting period and are
expected to apply when the related deferred income tax asset is realized or the deferred income tax
liability is settled.
Deferred tax assets are recognized only if it is probable that future taxable amounts will be available
to utilize those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset
and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items
recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized
in other comprehensive income or directly in equity, respectively.
(i) Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result
of past events, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.
Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognized
even if the likelihood of an outflow with respect to any one item included in the same class of
obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle
the obligation using a pre-tax rate that reflects current market assessments of the time value of
money and the risks specific to the obligation. The increase in the provision due to the passage of
time is recognized as an interest expense.
Property and equipment are stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. Subsequent expenditures
are included in the asset’s carrying amount or are recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. All other repair and maintenance are
charged to profit or loss during the financial period in which they are incurred.
Depreciation is provided on the straight-line basis so as to write down the cost of assets to their
residual values over their useful economic lives, at the following rates:
%
Building 5
Leasehold improvements 5-50
Brand New Motor vehicles 20
Used Motor vehicles 33.3
Furniture, fittings and equipment 20
Computer equipment 33.3
The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at the
end of each reporting period. An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater than its estimated recoverable
amount. The recoverable amount is the higher of the assets fair value, less costs to sell and
value in use. Gains and losses on disposals are determined by comparing proceeds with carrying
amount. These are included in other operating income in the profit or loss.
The Bank recognises right-of-use assets at the commencement date of the lease (i.e., the date
the underlying asset is available for use). Right-of-use assets are initially measured at amount
of lease liability and subsequently adjusted with accumulated amortization and impairment
losses, and any re-measurement of lease liabilities. The cost of right-of-use assets includes the
amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at
or before the commencement date less any lease incentives received. Right-of-use assets are
depreciated on a straight-line basis over the lease term.
The right-of-use assets are subject to impairment in line with the Bank’s policy as described in
Note 6(k).
The Bank’s intangible assets have definite useful life and primarily include capitalized computer
software. Acquired computer software licences are capitalized on the basis of the costs incurred
to acquire and bring to use the specific software. Development costs that are directly associated
with identifiable and unique software controlled by the Bank are recorded as intangible assets if
the inflow of incremental economic benefits
exceeding costs is probable. Capitalized costs include staff costs of the software development
team and an appropriate portion of relevant overheads. All other costs associated with computer
software, e.g. its maintenance, are expensed when incurred.
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognized for the amount by which
the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher
of an asset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units). The impairment test also can be performed
on a single asset when the fair value less cost to sell or the value in use can be determined reliably.
Goodwill and intangible assets that have an indefinite useful life are not subject to amortization and
are tested annually for impairment, or more frequently if events or changes in circumstances indicate
that they might be impaired. Other assets are tested for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount.
Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal
of the impairment at the end of each reporting period. No indicators of impairment were identified
therefore no non-financial assets were impaired in 2023 (2022: Nil).
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term
highly liquid investments with original maturities of three months or less. For the Bank, cash and cash
equivalents include cash and non-restricted balances with Bank of Tanzania, Investment securities
and amounts due from other banks. Cash and cash equivalents exclude the cash reserve requirement
held with the Bank of Tanzania. Cash and cash equivalents are carried at amortized cost.
i. Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave
that are expected to be settled wholly within 12 months after the end of the period in which the
employees render the related service are recognized in respect of employees’ services up to
the end of the reporting period and are measured at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee benefit obligations in the
statement of financial position.
The liabilities for gratuity payments to employees on a contract employment basis are not
expected to be settled wholly within 12 months after the end of the period in which the employees
render the related service. They are therefore measured as the present value of expected future
payments to be made in respect of services provided by employees up to the end of the reporting
period using the projected unit credit method.
The Bank has a statutory requirement to contribute to the Public Service Social Security Fund
(PSSSF) and National Social Security Fund (NSSF), which are defined contribution schemes.
The Bank contributes 15% of the required 20% of gross emoluments to the scheme and the
contributions are recognized as an expense in the period to which they relate. The remaining
5% is deducted from employees. The subsidiary of the Bank does not have any employees.
The Group has no further payment obligations once the contributions have been paid. The
contributions are recognized as employee benefit expenses when they are due. Prepaid
contributions are recognized as an asset to the extent that a cash refund or a reduction in future
payments is available.
Ordinary shares are classified as ‘share capital’ in equity. Any premium received over and above
the par value of the shares is classified as ‘share premium’ in equity. Incremental costs directly
attributable to the issue of new shares or options or to the acquisition of a business are shown in
equity as a deduction, net of tax, from the proceeds.
(o) Dividend
The Group presents basic and diluted earnings per share (EPS) in the consolidated and separate
financial statements. Basic EPS is calculated by dividing the profit or loss attributable to ordinary
shareholders of the Bank by weighted average number of ordinary shares outstanding during the
year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of shares outstanding for the effects of all dilutive potential ordinary
shares.
(q) Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if
the contract conveys the right to control the use of an identified asset for a period in exchange for
consideration.
The Group applies a single recognition and measurement approach for all leases, except for short-
term leases and leases of low-value assets. The Group recognizes lease liabilities to make lease
payments and right-of-use assets representing the right to use the underlying assets. The policy on
recognition and measurement of right-of-use assets is presented on note 6(j(ii)).
Lease liabilities
At the commencement date of the lease, the Group recognizes lease liabilities measured at the
present value of lease payments to be made over the lease term. The lease payments include fixed
payments (less any lease incentives receivable), variable lease payments that depend on an index
or a rate, and amounts expected to be paid under residual value guarantees. The lease payments
also include the exercise price of a purchase option reasonably certain to be exercised by the Bank
and payments of penalties for terminating the lease, if the lease term reflects exercising the option
to terminate. Variable lease payments that do not depend on an index or a rate are recognized as
expenses in the period in which the event or condition that triggers the payment occurs.
Transactions are classified as contingencies where the Bank and its subsidiary obligations depend
on uncertain future events. Items are classified as commitments where the Bank and its subsidiary
commit themselves to future transactions if the items will result in the acquisition of assets.
(s) Comparatives
Except when a standard or an interpretation permits or requires otherwise, all amounts are reported
or disclosed with comparative information.
The preparation of consolidated and separate financial statements in conformity with IFRS requires the
use of certain accounting estimates. It also requires management to exercise its judgement in the process
of applying the Group’s accounting policies.
The Group makes estimates and assumptions that affect the reported amounts of assets and liabilities
within the next period. Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be reasonable
under the circumstances.
The Group measurement of the expected credit loss allowance for financial assets measured at
amortized cost and FVOCI is an area that requires the use of complex models and significant
assumptions about future economic conditions and credit behaviour (e.g. the likelihood of customers
defaulting and the resulting losses). The Group uses several significant judgements in applying the
accounting requirements for measuring ECL, such as:
Detailed information about the judgement and estimates made by the Group are explained under
note 9.
Critical estimates are made by the Directors in determining the useful lives of property and equipment,
leased premises refurbishment and intangible assets as well as their residual values.
The business model reflects how the Group manages the financial assets in order to generate cash
flows. That is, whether the Group’s objective is solely to collect the contractual cash flows from the
assets or is to collect both the contractual cash flows and cash flows arising from the sale of assets.
If neither of these is applicable (e.g. financial assets are held for trading purposes), then the financial
assets are classified as part of ‘other’ business model and measured at FVTPL. Factors considered
by the Group in determining the business model for a group of assets include past experience on
how the cash flows for these assets were collected, how the asset’s performance is evaluated and
reported to key management personnel, how risks are assessed and managed and how managers
are compensated. Securities held for trading are held principally for the purpose of selling in the near
term or are part of a portfolio of financial instruments that are managed together and for which there
is evidence of a recent actual pattern of short-term profit-taking. These securities are classified in the
‘other’ business model and measured at FVPL.
c) Assessment of whether contractual cash flows are Solely Payments of Principal and Interest
(SPPI)
Where the business model is to hold assets to collect contractual cash flows or to collect contractual
cash flows and sell, the Group assesses whether the financial instruments’ cash flows represent
solely payments of principal and interest (the `SPPI test’). In making this assessment, the Group
considers whether the contractual cash flows are consistent with a basic lending arrangement i.e.
interest includes only consideration for the time value of money, credit risk, other basic lending risks
and a profit margin that is consistent with a basic lending arrangement. Where the contractual terms
introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement, the
related financial asset is classified and measured at fair value through profit or loss.
d) Taxes
The Group is subjected to several taxes and levies by various government and quasi- government
regulatory bodies. As a rule of thumb, the Group recognizes liabilities for the anticipated tax/levies
payable with utmost care and diligence. However, significant judgement is usually required in the
interpretation and applicability of those taxes /levies. Should it come to the attention of management,
in one way or the other, that the initially recorded liability was erroneous, such differences will impact
on the income and liabilities in the period in which such differences are determined.
The recognition of deferred tax asset relies on an assessment of the probability and sufficiency
of future taxable profit, future reversals of existing taxable temporary differences and ongoing tax
planning and strategies. The judgment takes into consideration the effect of both positive and
negative evidence, including historical financial performance, projections of future taxable income
and future reversals of existing taxable temporary differences.
e) Provisions
The Bank and Group have provided for the liabilities arising out of contractual obligations. Professional
expert advice is taken on establishing litigation provisions. Provisions for legal proceedings and
regulatory matters typically require a higher degree of judgements than other types of provisions.
When cases are at an early stage, accounting judgements can be difficult because of the high degree
of uncertainty associated with determining whether a present obligation exists because of past event,
estimating the probability of outflows and making estimates of the amount of any outflows that may
arise. As matters progress through various stages of the cases, Management together with legal
advisers evaluate on an ongoing basis whether provisions should be recognised, and the estimated
amounts of any such provisions, revising previous judgements and estimates as appropriate.
The fair value of financial instruments traded in active markets at the financial reporting date is based
on their quoted bid market price or dealer price quotations without any deductions for transaction
costs. For all other financial assets not listed in an active market, the fair value is determined by using
appropriate valuation techniques.
In determining the fair value of government securities that are designated as fair value through other
comprehensive income, the Bank uses yields of similar instruments traded in Bank of Tanzania’s
auctions. Changes in valuation assumptions could affect the reported fair value of financial
instruments. For example, to the extent that the Directors increased the yield rate by 1 basis point,
the fair values would be estimated at TZS 28,392 million (2022: TZS 22,799 million) as compared to
their reported fair value of TZS 28,345 million as at 31 December 2023 (2022: TZS 28,778 million). If
the yield rate had decreased by 1 basis point the fair value would be estimated at TZS 28,298 million
(2022: TZS 22,799 million).
In determining the fair value of unquoted equity investment in TMRC, the Bank used the price of
recent transaction of the shares of the Company. If the price of the shares would have increased/
decreased by 10% the fair value of the investments would have been increased/decreased by TZS
292 million (2022: TZS 292 million).
Except for leases where the Group had sufficient information to identify the rate implicit in the lease,
the Group utilizes Incremental Borrowing Rate (IBR) on nearly all of its leases. The IBR is the rate of
interest that the Group would have to pay to borrow over a similar term, and with a similar security, the
funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment.
The Group and Bank estimate the IBR starting internal borrowing rates as a base rate or using
observable inputs (such as market interest rates) when available, and then adjust that rate for relevant
factors which include Lessee-specific credit risk, amount of the lease payments, Collateralized nature
of the lease, Quality of the lessee’s collateral, lease term and Economic environment of the lease.
If the discount rate used would have increased by 10%, the lease liability of the Group and Bank
would have decreased by 1,786 TZS million (2022: TZS 1,703 million). If the discount rate used
would have decreased by 10%, the lease liability would have decreased by TZS 1,451 million (2022:
TZS 1,867 million).
8. SEGMENT REPORTING
The Group has the following business segments: Treasury, Retail banking, Wholesale banking, and UJVC
(the Bank’s subsidiary). The operating segments are reported in a manner consistent with the internal
reporting provided to the Bank’s Executive Committee (The Chief Operating Decision-Maker), which is
responsible for allocating resources to the reportable segments and assessing their performances. All
operating segments used by the Group meet the definition of a reportable segment under IFRS 8.
Operating segments
Wholesale Banking - includes loans & advances to customers, customers deposits and borrowings
(i)
from abroad that are used to finance lending to corporate customers in wholesale banking;
Retail Banking - includes loans & advances to customers, customers deposits, public borrowings
(ii)
like sustainable bond, TMRC borrowings and borrowings from abroad used to facilitate lending in
retail banking;
Treasury - undertakes the Bank’s funding and centralized risk management activities through
(iii)
borrowings, issues of debt securities, use of derivatives for risk management purposes and investing
in liquid assets such as short-term placements and corporate and government debt securities. The
segment includes cash and balances with Bank of Tanzania, placements and balances with other
banks, investments in equity, government and debt securities and public bonds likes of Sukuk Bond
and Shareholders fund;
(iv) UJVC – includes operations of Upanga Joint Venture Company, a subsidiary of the Bank.
Assets and liabilities that don’t fall under these categories are classified as unallocated balances.
Revenue and assets reported to the Bank’s Executive Committee are measured in a manner consistent
with that of the financial statements.
In arriving at segmented net interest income, an internal allocation of interest income and interest
expenses between businesses has been done to recognize and measure how much each source of
funding and each user of funding is contributing to overall profitability of the Bank. Operating expenses
for the Bank have also been allocated to the business using an internally agreed allocation ratio.
All customers are based in Tanzania, except for interbank placements with corresponding banks. There
was no income derived from transactions with a single external customer that amounted to 10% or more
of the Bank’s total income.
he segment information provided to the Bank’s Executive Committee for the reportable segments for the
T
year ended 31 December 2023 is as follows;
GROUP (Elimina-
Whole-
Retail tion)/
Treasury sale UJVC Total
2023 banking Consolida-
banking
tion
Interest income 219,395 126,006 834,191 - - 1,179,592
Interest expense (4,438) (130,623) (111,016) 3,723 (242,354)
The segment information provided to the Group’s Executive Committee for the reportable segments for
the year ended 31 December 2022 is as follows; (all amounts in TZS million):
GROUP (Continued)
(Elimina-
2022 Wholesale Retail tion)/
Treasury UJVC Total
banking banking Consoli-
dation
Interest income 177,780 70,707 705,169 - - 953,656
Interest expense (7,735) (62,128) (97,444) - 3,287 (164,020)
Segment assets,
liabilities and equity
Segment assets 3,719,911 1,078,768 5,194,447 40,741 (86,760) 9,947,107
Unallocated assets - - - - - 287,445
Total assets 3,719,911 1,078,768 5,194,447 40,741 (86,760) 10,234,552
The segment information provided to the Bank’s Executive Committee for the reportable segments for the
year ended 31 December 2023 is as follows;
*Included in net fees and commission, trading, foreign exchange and other income is:
reasury – TZS 28 million from fees and commission income, TZS (364) million from fees and commission
T
expense, TZS 7,527 million from trading income and TZS 65,835 million from foreign exchange income.
Wholesale banking – TZS 70,255 million from fees and commission income and TZS (2,927) from fees
and commission expense.
etail banking – TZS 399,023 million from fees and commission income, TZS (99,528) million from fees
R
and commission expense and TZS 28,531 million (Bank: 28,556 million) from other income.
The segment information provided to the Bank’s Executive Committee for the reportable segments for the
year ended 31 December 2022 is as follows;
The Bank’s subsidiary does not have significant operations (Note 25 (b)). The financial assets and
liabilities of the Bank’s subsidiary mainly consist of loans from related parties that are eliminated on
consolidation and other assets and liabilities that are not material to the Group. Consequently, the financial
risk management information presented below relates only to the Bank.
The Bank’s business involves taking on risks in a targeted manner and managing them professionally.
The core functions of the Bank’s risk management are to identify all key risks for the Bank, measure these
risks, manage the risk positions and determine capital allocations. The Bank regularly reviews its risk
management policies and systems to reflect changes in markets, products and best market practice. The
Bank’s aim is therefore to achieve an appropriate balance between risk and return and minimize potential
adverse effects on the Bank’s financial performance.
NMB Integrated Annual Report 2023 | 316
NMB BANK PLC
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Risk management is carried out by the Risk Department under policies approved by the Board of Directors.
The Board provides written principles for overall risk management, as well as written policies covering
specific areas, such as credit risk, market risk (foreign exchange risk, interest risk and price risk) and
liquidity risk. In addition, internal audit is responsible for the independent review of risk management and
the control environment.
The Bank takes on exposure to credit risk, which is the risk that the counterparty will cause a financial
loss to the Bank by failing to discharge an obligation. Credit risk is the most important risk for the Bank’s
business. Management, therefore, carefully manages its exposure to credit risk. Credit exposures
arise principally in lending activities that lead to loans and advances and investment activities that
bring debt securities and other bills into the Bank’s asset portfolio. There is also credit risk in off-
balance sheet financial instruments, such as loan commitments. The credit risk management and
control are centralised in the credit risk Executive Committee of the Bank and reported to the Board
of Directors and heads of department regularly.
The estimation of credit exposure for risk management purposes is complex and requires the
use of models, as the exposure varies with changes in market conditions, expected cash flows
and the passage of time. The assessment of credit risk of a portfolio of assets entails further
estimations as to the likelihood of defaults occurring, of the associated loss ratios and of default
correlations between counterparties. The Group measures credit risk using Probability of Default
(PD), Exposure at Default (EAD) and Loss Given Default (LGD). This approach is similar to the
one used for the purposes of measuring Expected Credit Loss (ECL) under IFRS 9. The loan
book is split into term loans and overdrafts (secured & unsecured) and off-balance sheet items
(these include letters of credit and guarantees, etc.).
The Bank considers term loans and advances to be in default if the repayment of the loan
instalment (principal and accrued interest) is more than 90 days past due for all product types. A
revolving facility is in default if the facility is drawn above the limit for more than 90 consecutive
days during the lifetime of the facility or if the drawn amount is still outstanding 90 days after
maturity of the facility or if a related term loan is in default.
For regulatory purposes and for internal monitoring of the quality of the loan portfolio, all
customers are segmented into five rating classes as shown below:
For internal monitoring of balances with other banks, banks are rated into three categories
based on their financial position. Additionally, qualitative characteristics are taken into
consideration when scoring a counterparty. Counterparts with a history of default are usually
rated as Medium to High risk and dealing limits are cancelled.
The Bank’s balances with other banks as at 31 December 2023, are all low risk.
The loans and advances to customers portfolio analysed for regulatory purposes is shown below:
Current 2,010,730 4,640,873 574,297 288,136 7,514,036 1,095,587 4,059,865 470,028 229,762 5,855,242
Especially mentioned 131,265 16,560 30,962 16,917 195,704 123,142 10,555 50,200 8,444 192,341
Sub-standard 19,888 10,624 3,107 3,997 37,616 9,457 10,508 17,958 736 38,659
Doubtful 13,310 16,767 52,545 1,638 84,260 12,315 10,661 14,498 4,671 42,145
Loss 32,120 21,001 41,254 23,635 118,010 44,886 22,145 26,095 21,163 114,289
Gross carrying
amount 2,207,313 4,705,825 702,165 334,323 7,949,626 1,285,387 4,113,734 578,779 264,776 6,242,676
Loss allowance (132,879) (40,828) (52,287) (16,707) (242,701) (124,370) (37,248) (43,260) (23,195) (228,073)
Carrying amount 2,074,434 4,664,997 649,878 317,616 7,706,925 1,161,017 4,076,486 535,519 241,581 6,014,603
The Bank manages limits and controls concentrations of credit risk wherever they are
identified to individual counterparties and groups, and to industries. The Bank structures
the levels of credit risk it undertakes by placing limits on the amount of risk accepted in
relation to one borrower, or groups of borrowers, and to industry segments. Such risks are
monitored on a revolving basis and subject to an annual or more frequent review, when
considered necessary.
The exposure to any one borrower, including banks, is further restricted by sub-limits
covering on and off-balance sheet exposures. Actual exposures against limits are monitored
daily. Exposure to credit risk is also managed through regular analysis of the ability of
borrowers and potential borrowers to meet interest and capital repayment obligations and
by changing these lending limits where appropriate.
(b) Collateral
The Bank employs a range of policies and practices to mitigate credit risk. The most
traditional of these is the taking of security for funds advanced, which is common practice.
The Bank implements guidelines on the acceptability of specific classes of collateral or
credit risk mitigation. The principal collateral types for loans and advances are:
Collateral held as security for financial assets other than loans and advances depends on
the nature of the instrument. Debt securities, treasury and other eligible bills are generally
unsecured, with the exception of asset-backed securities and similar instruments, which
are secured by portfolios of financial instruments.
The Bank’s policies regarding obtaining collateral have not significantly changed during
the reporting period and there has been no significant change in the overall quality of the
collateral held by the Bank since the prior period.
Apart from other categories, the Bank has been closely monitoring collateral held for
financial assets considered to be credit-impaired, as it becomes more likely that the Bank
will take possession of collateral to mitigate potential credit losses. Financial assets that
are credit-impaired and related collateral held in order to mitigate potential losses are
shown below:
Credit impaired
assets
Expected
(Amounts in TZS Gross Carrying Market Value
Credit
Millions) exposure amount of Collateral
Losses
At 31 December 2023
Secured 65,318 22,927 42,391 116,157
Unsecured 48,392 25,103 23,289 -
Overdraft 29,270 12,631 16,639 33,610
Agribusiness 96,906 41,620 55,286 218,291
Total 239,886 102,281 137,605 368,058
At 31 December 2022
Secured 66,658 28,039 35,936 63,146
Unsecured 43,314 24,602 18,712 -
Overdraft 26,570 12,932 13,639 22,452
Agribusiness 58,551 36,075 22,823 27,872
The main purpose of these instruments is to ensure that funds are available to a customer
as required. Guarantees and standby letters of credit hold the same credit risk as loans.
Documentary and commercial letters of credit - which are written undertakings by the
Bank on behalf of a customer authorizing a third party to draw drafts on the Bank up to a
stipulated amount under specific terms and conditions - are collateralized by the underlying
shipments of goods to which they relate. Undrawn commitments represent unused portions
of authorizations to extend credit in the form of loans, guarantees or letters of credit. With
respect to credit risk on undrawn commitments, the Bank is potentially exposed to loss in an
amount equal to the total unused commitments. However, the likely amount of loss is less
than the total unused commitments, as most undrawn commitments are contingent upon
customers maintaining specific credit standards. The Bank monitors the term to maturity of
credit commitments because longer-term commitments generally have a greater degree of
credit risk than shorter-term commitments
IFRS 9 outlines a ‘three-stage’ model for impairment based on changes in credit quality
since initial recognition as summarized below:
For expected credit loss provisions modelled on a collective basis, a grouping of exposures
is performed based on shared risk characteristics, such that risk exposures within a group
are homogeneous.
In performing this grouping, there must be sufficient information for the group to be
statistically credible. Where sufficient information is not available internally, the Bank
has considered benchmarking internal/external supplementary data to use for modelling
purposes. The characteristics and any supplementary data used to determine groupings
are outlined below:
The Bank groups its exposures based on product type and has specified the following
default product segments under the ‘product type’ criteria where each product is identified
by a specific product code.
Secured term loans - This group comprises all term loan products secured by collateral
i.e. legal mortgage, guarantee or cash cover. Products in this group consist of Corporate,
MSE, Special Asset Loan, Invoice Financing loans, Personal loans with cash cover, SME,
Staff mortgage and Car loans.
Unsecured term loans - This comprises all unsecured facilities. Products in this group
consist of Staff loans, Salaries Workers’ Loans and salary advance.
Agribusiness loans – This group comprises all term loans and overdraft facility advances
to customers engaged in agriculture operations. It comprises customers classified as SME
and Corporates.
Overdrafts – This group comprises all overdraft advances to customers issued to SME
and Corporate customers other than those included in Agribusiness.
O
ff balance sheet items – This group comprises all financial guarantees, letter of credit
and unutilized loan commitments.
The Bank considers a financial instrument to have experienced a significant increase in
credit risk when one or more of the following quantitative, qualitative or backstop criteria
have been met:
Qualitative criteria
A loan facility is assessed to have significant increase in credit risk if the borrower meets
one or more of the following criteria:
• Direct debit cancellation;
• Extension to the terms granted;
Government securities
Government securities are considered to have experienced a significant increase in credit
risk when at least one of the following factors have occurred:
• The Government has received a low credit rating (“C”) by the international rating
agencies; or
• The Government has initiated debt restructuring process.
Quantitative criteria:
A backstop is applied, and the financial instrument considered to have experienced a
significant increase in credit risk if the borrower is more than 30 days past due on its
contractual payments.
Government securities such as treasury bills and bonds measured at amortized cost and
at fair value through other comprehensive income are classified as low credit risk financial
instruments and impairment will be recorded only if there is evidence of expected default
on Government securities. It is important to note that there is no history of default on the
Tanzanian Government securities.
T
he Bank defines a financial instrument as in default, which is fully aligned with the definition
of credit-impaired, when it meets one or more of the following criteria:
Quantitative
The Bank considers a term loan to be in default if the repayments on the loan are more
than 90 days past due for all product types. The Bank considers Agribusiness loans to be
in default if the bullet repayment on the loan is more than 90 days past due and further
considering a revolving facility in default if the facility is drawn above the loan limit for more
than 90 consecutive days during the lifetime of the facility or if the drawn amount is still
outstanding 90 days after maturity of the facility.
The borrower meets unlikeliness to pay criteria, which indicates the borrower is in significant
financial difficulty. These are instances where: -
• the borrower is in long-term forbearance;
• the borrower is deceased;
• the borrower is insolvent;
• the borrower is in breach of financial covenant(s);
• an active market for that financial asset has disappeared because of financial difficulties;
• concessions have been made by the lender relating to the borrower’s financial difficulty;
• fraudulent activities were conducted in issuance of the loan;
• it is becoming probable that the borrower will enter bankruptcy; and
• financial assets are purchased or originated at a deep discount that reflects incurred
credit losses.
Qualitative (Continued)
The criteria above have been applied to all financial instruments held by the Bank and are
consistent with the definition of default used for internal credit risk management purposes.
The default definition has been applied consistently to model the Probability of Default
(PD), Exposure at Default (EAD) and Loss given Default (LGD) throughout the Bank’s
expected loss calculations.
Government securities
For government securities, below events are considered as default when they occur: -
• When repayments of interest and principal are not made on time as per contractual
schedules to the extent of 30 days delay;
• When the Government is downgraded to below “C” Status by International Rating
Agency such as Moody’s. S&P or Fitch; and
• When the Government is declared default/bankrupt by responsible agencies like World
Bank or IMF.
• EAD is based on the amounts the Bank expects to be owed at the time of default,
over the next 12 months (12M EAD) or over the remaining lifetime (Lifetime EAD). For
example, for a revolving commitment, the Bank includes the current drawn balance
plus any further amount that is expected to be drawn up to the current contractual limit
by the time of default, should it occur.
• The Bank estimates the Loss Given Default for unsecured term loans based on
recoveries on loans that defaulted and were written off and collections from loans that
defaulted but were not written off. On secured term loans and overdraft facilities the
Bank considers collateral value discounted using an effective interest rate. An average
LGD obtained from NPL collections and recoveries of secured segment applied for
few credit facilities under secured segment with no collaterals attachment following
the agreed special arrangement on securities.
• The probability of default for off-balance sheets items has been estimated at 0.05%
based on Basel due to limitation of historical default data and loss given default
estimated using collateral value discounted using an effective interest rate.
The assessment of PDs and the calculation of ECL incorporate forward-looking information.
The Bank has performed historical analysis and identified the key macro-economic
variables affecting credit risk and expected credit losses for each portfolio. These macro-
economic variables and their associated impact on the PD vary between secured and
unsecured loans and off-balance sheet exposure. Expert judgment has also been applied
in this process. Forecasts of these macro-economic variables (the “base scenario”) are
provided by the Bank economists on an annual basis and provide the best estimate view
of the economy over the next five years.
After three years, to project the economic variables out for the full remaining lifetime of
each instrument, a mean reversion approach has been used, which means that economic
variables tend to reflect either a long run average rate (e.g. unemployment) or long run
average growth rate (e.g. GDP, private credit growth) over a period of the past three years.
The impact of these economic variables on the PD has been determined by performing
statistical regression analysis to understand the impact changes in these variables have
had historically on default rates.
In addition to the base economic scenario, the Bank economists also provide other
possible scenarios along with scenario weightings. The number of other scenarios used is
set based on the analysis of each major segment type to ensure non-linearity is captured.
The number of scenarios and their attributes are reassessed at each reporting date. The
Bank concluded that three scenarios appropriately captured non-linearity.
The scenario weightings are determined by a combination of statistical analysis and expert
economic judgement, taking account of the range of possible outcomes each chosen
scenario is representative of. Following this assessment, the Bank measures ECL as
either a probability weighted 12-month ECL (Stage 1), or a probability weighted lifetime
ECL (Stages 2 and 3). These probability weighted ECLs are determined by running each
scenario through the relevant ECL model and multiplying it by the appropriate scenario
weighting (as opposed to weighting the inputs).
As with any economic forecasts, the projections and likelihoods of occurrence are subject
to a high degree of inherent uncertainty and therefore the actual outcomes may be
significantly different to those projected. The Bank considers these forecasts to represent
its best estimate of the possible outcomes and has analyzed the non-linearities and
asymmetries within the Bank’s different portfolios to establish that the chosen scenarios
are appropriately representative of the range of possible scenarios.
The review of economic variables has been done on a regular basis whereby Gross
National Expenditure (GNE) and Credit Growth in Private Sector were applied in 2023.
The most significant period-end assumptions used for the ECL estimate as at 31 December
2023 and 31 December 2022 are set out below.
During the year the Bank’s model incorporated the new assumption of the Gross National
Expenditure (GNE) as shown in the following table.
For the years 2022 and 2023, the weightings assigned to each economic scenario were
80%, 10% and 10% for “base”, “upside” and “downside” respectively.
If the credit growth in private sector changed by 10% and the GNE changed by 10%, the
changes in expected loss allowance would have been as follows:
The following tables contain an analysis of the credit risk exposure of financial instruments for which an ECL allowance is recognized. The gross carrying
amount of financial assets below also represents the Bank’s maximum exposure to credit risk on these assets
2022
Agribusiness 470,028 4,354 50,200 2,831 58,551 36,075 578,779 43,260
Overdraft 229,762 4,294 8,444 5,969 26,570 12,932 264,776 23,195
Secured 1,095,587 6,862 123,142 89,469 66,658 28,039 1,285,387 124,370
Unsecured 4,059,865 12,399 10,555 247 43,314 24,602 4,113,734 37,248
As at 31 December 2022
Current 1,095,587 - - 1,095,587
Especially mentioned - 123,142 - 123,142
Sub-standard - - 9,457 9,457
Doubtful - - 12,315 12,315
Loss - - 44,886 44,886
As at 31 December 2022
Current 4,059,865 - - 4,059,865
Especially mentioned - 10,555 - 10,555
Sub-standard - - 10,508 10,508
Doubtful - - 10,661 10,661
Loss - - 22,145 22,145
As at 31 December 2022
Current 470,028 - - 470,028
Especially mentioned - 50,200 - 50,200
Sub-standard - - 17,958 17,958
Doubtful - - 14,498 14,498
Loss - - 26,095 26,095
As at 31 December 2022
Current 229,762 - - 229,762
Especially mentioned - 8,444 - 8,444
Sub-standard - - 736 736
Doubtful - - 4,671 4,671
Loss - - 21,163 21,163
2023 2022
(e) Off balance sheet exposures TZS’ Millions TZS’ Millions
Guarantees and Indemnities 1,028,592 558,225
Undrawn Commitments 319,530 242,993
Acceptances and letters of credit 1,067,864 1,151,212
Gross carrying amount 2,415,986 1,952,430
Loss allowance (411) (275)
Net carrying amount 2,415,575 1,952,155
Provision for loss allowance relating to off-balance sheet exposures is disclosed under
other liabilities.
The loss allowance recognized in the period is impacted by a variety of factors, as described
below:
• Transfers between Stage 1 and Stages 2 or 3 due to financial instruments experiencing
significant increases (or decreases) of credit risk or becoming credit-impaired in the
period, and the consequent “step up” (or “step down”) between 12-month and Lifetime
ECL;
• Additional allowances for new financial instruments recognised during the period, as
well as credit for financial instruments de-recognised in the period;
• Impact on the measurement of ECL due to changes in PDs, EADs and LGDs in the
period, arising from regular refreshing of inputs to models;
• Discounts unwind within ECL due to the passage of time, as ECL is measured on a
present value basis. This change is incorporated within maintenance stage and other
adjustments category.
• Foreign exchange retranslations for assets denominated in foreign currencies and
other movements, this change is incorporated within maintaining stage and other
adjustments category; and
• Financial assets derecognised during the period and write-offs of allowances related to
assets that were written off during the period.
The following tables explain the changes in the loss allowance between the beginning and the end
of the annual period due to these factors:
Stage 1 Stage 2 Stage 3
Total Loans and advances
12-month Lifetime Lifetime
Amounts in TZS’
ECL ECL ECL Total
As at 1 January 2023 27,909 98,516 101,648 228,073
Segment Reallocation - - - -
Movements
Transfer from stage 1 to stage 2 (117) 117 - -
Transfer from stage 1 to stage 3 (703) - 703 -
Transfer from stage 2 to stage 1 546 (546) - -
Transfer from stage 2 to stage 3 - 149 (149) -
Transfer from stage 3 to stage 1 559 - (559) -
Transfer from stage 3 to stage 2 - 2,912 (2,912) -
Maintained Stage and other movements 22,326 95,572 98,367 216,265
New Financial assets originated or purchased 15,061 134 4,032 19,227
Financial assets that have been de-recognized (26,314) (95,673) (54,545) (176,532)
Net profit or loss charge during the period 11,358 2,665 44,937 58,960
Other movements with no profit or loss impact
Write-offs (10) (18) (44,304) (44,332)
As at 31 December 2023 39,257 101,163 102,281 242,701
S
ignificant changes in the gross carrying amount of financial assets that contributed to
changes in the loss allowance were as follows:
The growth of new Salaried Workers Loans and other consumers’ loans originated during
the period, aligned with the Bank’s organic growth objective, increase the gross carrying
amount of the unsecured book by 14% (2022: 21%) while secured book significantly
increased by 72% (2022: increased by 45%), with a corresponding TZS 3.6 billion increase
in loss allowance for unsecured book (2022: TZS 4.1 billion), and an increase of TZS 8.5
billion (2022: decrease of TZS 37.2 billion) for secured book.
The following table further explains changes in the gross carrying amount and explains their
significance to the changes in the loss allowance for the same portfolio as discussed above.
Segment Reallocation - - - -
Movements
Transfer from stage 1 to stage 2 (2,856) 2,856 - -
Transfer from stage 1 to stage 3 (1,785) - 1,785 -
Transfer from stage 2 to stage 1 8,348 (8,348) - -
Transfer from stage 2 to stage 3 - (455) 455 -
Transfer from stage 3 to stage 1 16,848 - (16,848) -
Transfer from stage 3 to stage 2 - 3,440 (3,440) -
Maintained Stage and other movements 3,098,116 7,772 59,312 3,165,200
New Financial assets originated or purchased 938,252 2,268 4,745 945,265
Financial assets that have been de-recognized (3,221,369) (8,509) (19,956) (3,249,834)
Write-offs (773) (170) (18,344) (19,287)
As at 31 December 2022 4,059,865 10,555 43,313 4,113,733
Movements
Transfer from stage 1 to stage 2 (150) 150 - -
Transfer from stage 1 to stage 3 (3) - 3 -
Transfer from stage 2 to stage 1 36,230 (36,230) - -
Transfer from stage 2 to stage 3 - - - -
Transfer from stage 3 to stage 1 33,926 - (33,926) -
Transfer from stage 3 to stage 2 - 3,227 (3,227) -
Maintained Stage and other movements 234,435 77,886 65,380 377,701
New Financial assets originated or purchased 5,845 34 34 5,913
Financial assets that have been de-recognized (118,201) (4,463) (3,833) (126,497)
Write-offs (60) (22) (11,169) (11,251)
As at 31 December 2022 470,027 50,201 58,551 578,779
Movements
Transfer from stage 1 to stage 2 (595) 595 - -
Transfer from stage 1 to stage 3 (34) - 34 -
Transfer from stage 2 to stage 1 992 (992) - -
Transfer from stage 2 to stage 3 - - - -
Transfer from stage 3 to stage 1 6,874 - (6,874) -
Transfer from stage 3 to stage 2 - 517 (517) -
Maintained Stage and other movements 177,554 (2,405) 34,533 209,682
New Financial assets originated or purchased 126 5 1 132
Financial assets that have been de-recognized (191,167) (1,217) (16,854) (209,238)
Write-offs - - (5,096) (5,096)
As at 31 December 2022 229,762 8,443 26,571 264,776
The Bank writes-off financial assets that have been past due for more than 720 days. Write-
off can be done in whole or in part before the 720 days in arrears when it has consumed all
practical recovery efforts and has concluded there is no reasonable expectation of recovering
the remaining amount, this includes (i) ceasing enforcement activity and (ii) where the Bank’s
recovery method is foreclosing on collateral and the value of the collateral is such that there
is no reasonable expectation of recovering in full.
The Bank has written-off of TZS 74 billion in 2023 (2022: TZS 70 billion) while still working on
recovering the written-off amount.
The following table includes summary information for financial assets with lifetime ECL whose
cash flows were modified during the period as part of the Bank’s restructuring activities and
their respective effect on the Bank’s financial performance:
The net modification gain above represents the changes in the gross carrying amounts (i.e.
before impairment allowance) of the financial assets from immediately before, to immediately
after, modification. In the majority of cases, this gross gain had been anticipated and already
materially reflected within the ECL allowance.
Balances due from other banks are considered to have low credit risk and classified as
stage 1. The Basel Minimum Risk parameters of Probability of Default (PD) and Loss Given
Default (LGD) rates were used to calculate the impairment charge, which is 5.5 million as of
December 31, 2023 (2022: Nil).
The Bank holds investments in Treasury Bills and Treasury Bonds issued by the Government.
These investments are considered to have low credit Risk, at the end of reporting period,
these assets were categorized as Stage 1. The Basel Minimum Risk parameters were used
to calculate ECL. Impairment charge as of December 31, 2023, is 114 million (2022: Nil)
Other assets are categorized as Stage 1 and Stage 3, balances with Bank of Tanzania are
categorized as Stage 1. The simplified model has been used for estimation of ECL. The
impact has been determined to be insignificant.
During the year, the Bank did not obtain assets by taking possession of collateral held as
security. Repossessed properties are usually sold as soon as practicable, with the proceeds
used to reduce the outstanding indebtedness.
The following table breaks down the Bank’s main credit exposure at their carrying
amounts, as categorized by geographical region as of 31 December 2023. For this
table, the Bank has allocated exposures to regions based on the country of domicile
of its counterparties.
9.1.12 Concentration of risks of financial assets with credit risk exposure (continued)
Credit risk exposures relating to on-balance sheet assets are Tanzania Europe America Others Tota
as follows: TZS Millions TZS Millions TZS Millions TZS Millions TZS Millions
31 December 2023
Cash and balances with the Bank of Tanzania 1,327,789 6,885 - 6,260 1,340,934
Placement and balances with other banks 288,263 34,023 - 14,473 336,759
Investment in Government securities
• Amortised cost 2,245,260 - - - 2,245,260
• Fair value through Other Comprehensive Income 28,345 - - - 28,345
Loans and advances to customers 7,706,925 - - - 7,706,925
Other assets (excluding non-financial assets) 103,522 - - - 103,522
As at 31 December 2023 11,700,104 40,908 - 20,733 11,761,745
9.1.12 Concentration of risks of financial assets with credit risk exposure (continued)
31 December 2022
Cash and balances with the Bank of Tanzania 622,350 - - - 622,350
Placement and balances with other banks 139,492 46,056 - 1,393 186,941
Investment in Government securities
• Amortised cost 1,915,254 - - - 1,915,254
• Fair value through Other Comprehensive Income 28,778 28,778
Loans and advances to customers 6,242,676 - - - 6,242,676
Other assets (excluding non-financial assets) 171,467 - - - 171,467
As at 31 December 2022 9,120,017 46,056 - 1,393 9,167,466
9.1.12 Concentration of risks of financial assets with credit risk exposure (continued)
The following table breaks down the Bank’s main credit exposure at their carrying amounts, as categorized by the industry sectors of its counterparties.
(Amounts are in TZS’ Millions):
Financial Trading Transport & Whole-
institu- Manu-fac- and com- communi- sale & Agricul- Individu-
31 December 2023 tions turing mercial cation retail ture als Others Total
Cash and balances with the Bank of
Tanzania 791,826 - - - - - - - 791,826
Placement and balances with other
banks 336,759 - - - - - - - 336,759
Loans and advances to customers - 412,150 92,065 169,546 767,998 728,446 4,777,537 1,001,884 7,949,626
Other assets (excluding non-financial
assets) 103,522 - - - - - - - 103,522
As at 31 December 2023 3,505,712 412,150 92,065 169,546 767,998 728,446 4,777,537 1,001,884 11,455,338
9.1.12 Concentration of risks of financial assets with credit risk exposure (continued)
9.1.12 Concentration of risks of financial assets with credit risk exposure (continued)
The following table breaks down the Bank’s main credit exposure at their carrying amounts, as categorized by the industry sectors of its
counterparties. (Amounts are in TZS’ Millions):
Trans-
Financial Manu- Trading port and Whole-
institu- factur- and com- commu- sale and Agricul- Individu-
31 December 2022 tions ing mercial nication retail ture als Others Total
Cash and balances with the Bank of
Tanzania 1,076,453 - - - - - - - 1,076,453
Placement and balances with other
banks 186,941 - - - - - - - 186,941
Investment in Government securities
- Amortised cost 1,915,254 - - - - - - - 1,915,254
- Fair value through Other compre-
hensive income 28,778 - - - - - - - 28,778
Loans and advances to customers - 264,208 812,496 123,976 347,812 520,514 3,732,399 441,271 6,242,676
Other assets (excluding non-finan-
cial assets) - - - - - - - 171,467 171,467
As at 31 December 2022 3,207,426 264,208 812,496 123,976 347,812 520,514 3,732,399 612,738 9,621,569
Credit risk exposures relating to off-balance sheet assets are as follows:
Guarantees and indemnities - (Note
41(a)) 400 46,604 146,854 38,614 321,664 3,835 9 245 558,225
Undrawn commitments (Note 41(a)) - 41,442 103,511 593 34,879 61,564 4 1000 242,993
Acceptances & letters of credit (Note
41(a)) 145,766 119,732 34,498 61,823 771,337 13,752 - 4,304 1,151,212
As at 31 December 2022 146,166 207,778 284,863 101,030 1,127,880 79,151 13 5,549 1,952,430
The Bank is subject to market risks, signifying the potential variation in the fair value or future cash
flows of a financial instrument due to changes in market prices. Such risks predominantly emanate
from positions in interest rates and currencies, making them susceptible to both general market
dynamics and specific shifts in market rate volatility, including interest rates, credit spreads, and
foreign exchange rates. The Bank categorizes its market risk exposures into trading or non-trading
portfolios.
Our trading portfolios comprise positions derived from market-making activities, where the Bank
engages as a principal with clients or the market. On the other hand, non-trading portfolios are
largely a result of managing the interest rates tied to the Bank’s retail and corporate banking assets
and liabilities.
The Bank’s Treasury Department is the focal point for managing and monitoring risks arising from
both trading and non-trading activities.
Trading portfolios include those positions arising from market-making transactions where the Bank
acts as principal with clients or with the market.
Non-trading portfolios primarily arise from the interest rate management of the Bank’s retail and
corporate banking assets and liabilities.
The Bank’s approach to market risk is strategic, operating within the boundaries of board-approved
tolerances. The Asset-Liability Committee (ALCO) plays a pivotal role in this framework, not only
monitoring these tolerances but also implementing escalation procedures as needed. ALCO
convenes monthly, providing a platform for comprehensive deliberations on the Bank’s Market Risk
profile. These meetings are instrumental, as they encompass the examination of management’s
analytical insights on interest rate impacts on the bank, inclusive of, but not limited to, the outcomes
derived from various modeling techniques.
The Bank actively manages its exposure to the potential effects of fluctuations in current
foreign currency exchange rates, which can significantly impact its financial position and cash
flows. This risk management is overseen by the ALCO, which establishes strict limits on the
level of exposure to foreign exchange risk. These limits are meticulously set for each currency
and in aggregate terms, covering both overnight and intra-day positions, and are subject to
daily monitoring to ensure ongoing compliance and risk mitigation.
The Bank maintains a conservative stance towards its net open foreign currency positions.
These limits are deliberately kept well below the maximum thresholds permitted by the Central
Bank of Tanzania, reflecting the Bank’s prudent approach to managing currency risk.
The table below summarises the Bank’s exposure to foreign currency exchange rate risk at
31 December 2023 and 31 December 2022. Included in the table are the Bank’s financial
instruments at carrying amounts, categorised by currency.
Liabilities
Deposits from customers (843,178) (42,637) (3,283) (5,436) (894,534)
Long term borrowing (743,517) - - - (743,517)
Lease liabilities (2,966) - - - (2,966)
Other liabilities (excluding
non-financial other liabilities) (16,492) (297) - - (16,789)
Cash and balances with Bank 334,297 3,066 744 1,260 339,367
of Tanzania
Placement and balances with 40,718 12,920 2,162 1,828 57,628
other banks
Loans and advances to cus- 558,636 - 5 - 558,641
tomers
Other assets (excluding non-fi- 2,425 - - (3) 2,422
nancial assets)
Total financial assets 936,076 15,986 2,911 3,085 958,058
Liabilities
The Bank conducts a comprehensive analysis to evaluate the impact of foreign exchange
rate fluctuations on its pre-tax profit for the year. This sensitivity analysis is premised on the
assumption that all other variables remain constant. It specifically focuses on how changes in
foreign exchange rates affect the translation of various foreign currency-denominated items.
These items include cash and balances with the Bank of Tanzania, placements and balances
with other banks, as well as loans and deposits from customers and other banks. Additionally,
the analysis encompasses the impact on borrowings, lease liabilities, other assets, and other
liabilities.
The results of this foreign exchange sensitivity analysis are presented in the table below:
% change in 2023 2022
exchange rate TZS’ Millions TZS’ Millions
USD 10% (1,101) 17,934
EURO 10% (202) 1,653
GBP 10% 173 21
The translation impact of placements and balances with other banks in various currencies,
including Kenyan Shillings, Ugandan Shillings, Japanese Yen, Swiss Francs, Canadian
Dollars, Indian Rupees, Rwandese Francs, Australian Dollars, Norwegian Krona, Swedish
Krona, and South African Rand, is assessed to be minimal and not of significant concern.
The Board is responsible for establishing market risk limits, ensuring they are appropriately
reviewed at least annually or more frequently in response to prevailing market conditions.
The responsibility for regular reviews and the monitoring of these limits has been delegated
to the Bank’s Asset and Liability Committee (ALCO).
Currently, the Bank refrains from engaging in proprietary trading activities, resulting in minimal
exposure to market risk. The primary risk associated with the Bank’s non-trading portfolio is
the potential loss stemming from fluctuations in the future cash flows or fair values of financial
instruments due to variations in market interest rates.
The Bank recognizes its exposure to the impact of fluctuations in prevailing market interest
rates, affecting both its fair value and cash flow risks. The management of interest rate risk
is primarily conducted through the careful monitoring of the interest rate repricing impact on
the static balances presented in the statement of financial position. This monitoring includes
assessing the implications of a 200-basis point interest rate shock over a 12-month period.
Items sensitive to variable rates would experience immediate effects from such an interest
rate shock. The subsequent table delineates the Bank’s Interest Gap position for the non-
trading portfolio. It is important to note that the Bank does not carry interest rate risk on off-
balance-sheet items. The presentation of the Bank’s assets and liabilities is at their carrying
amount, categorized according to the earliest of contractual repricing or maturity dates.
The Bank has conducted a comprehensive analysis to assess the impact of a scenario
of 1% fluctuation in market interest rates. This analysis assumes a uniform movement in
yield curves and the Bank’s financial position remains constant. Under these conditions, the
following are the projected effects on the Bank’s profit or loss, expressed in (TZS) million.
As at 31 December 2023
Net Interest-
Weighted Net
Sensitivity Period Bearing Fund- Impact
Average Position
ing
Less than 30 days 2,647 264,617 (261,970) 5,239
30days to 1 Year 137,050 3,798,404 (3,661,354) 73,227
As at 31 December 2022
Net Interest-
Weighted Net
Sensitivity Period Bearing Fund- Impact
Average Position
ing
Less than 30 days 2,128 212,782 (210,655) 2,107
30days to 1 Year 127,143 3,492,269 (3,365,126) 33,651
Both the Group and the Bank hold are subject to price risk, primarily due to investments in
shares of Tanzania Mortgage Refinance Company (TMRC) and in government securities.
These investments are valued at fair value through other comprehensive income (FVOCI).
To mitigate the risks associated with price volatility in debt securities, the Group employs a
diversification strategy, spreading exposure across its investment portfolio.
Price sensitivity
Under a scenario of increase in the yield rate by 1 basis points, the directors estimate that
the fair values of assets would be TZS 28,392 million (2022: TZS 22,799 million), compared
to the reported fair value of TZS 28,345 million at 31st December 2023 (2022: TZS 28,412
million). Conversely, a decrease of 1 basis point in the yield rate would result in an estimated
fair value of TZS 28,298 million (2022: TZS 22,799 million).
In determining the fair value of the unquoted equity investment in Tanzania Mortgage
Refinance Company (TMRC), the Bank utilized the pricing from the most recent share
transactions of the Company. It is projected that a 10% rise or fall in the share prices would
correspondingly increase or decrease the fair value of these investments by TZS 292 million
(2022: TZS 292 million).
Post the reform of the interest rate benchmark, the Group successfully mitigated all exposure
to the USD LIBOR (London Interbank Offered Rate) benchmark.
Throughout the financial year, a comprehensive transition was undertaken, shifting the
Group’s benchmarking standard from the USD LIBOR to the Term Secured Overnight
Financing Rate (SOFR), as established by the Chicago Mercantile Exchange (CME).
Liquidity risk refers to the scenario where the Bank may potentially faces challenges in meeting its
immediate financial liabilities as they mature, or encounters difficulties in obtaining funds to replace
those that have been withdrawn. Such a risk can manifest in the inability to return funds to depositors
in a timely manner or to honor commitments in lending agreements.
The Bank ensures its liquidity is maintained at optimal levels through a comprehensive risk
management process, overseen by the Asset and Liability Committee (ALCO). This process
encompasses:
• Daily Funding Management: This involves continuous monitoring of upcoming cash flow
requirements to ensure the Bank can meet its daily obligations. It includes replenishing
funds as they mature or are borrowed by customers. The Bank actively participates in
money markets to facilitate this process.
• Portfolio of Liquid Assets: The Bank maintains a portfolio of highly liquid and marketable
securities, that can easily be liquidated as protection against any unforeseen interruption
to cash flows;
• Liquidity Ratios: The Bank closely monitors key balance sheet liquidity ratios, including
the Liquid Asset Ratio (LAR), Loan to Deposit Ratio (LDR), and Long-term Funding
Ratio (LTFR), to comply with both internal standards and regulatory requirements.
• Debt Maturity Management: Attention is given to managing the maturity profiles and
concentrations of debts to avoid significant maturity clusters that could strain liquidity.
• Depositor Base Diversification: The Bank strives to diversify its depositor base, reducing
reliance on any single depositor or group, thereby spreading its liquidity risk.
• Liquidity Stress Testing: Regular liquidity stress tests and scenario analyses are
conducted to prepare for potential liquidity challenges.
• Contingency Funding Plan: The Bank maintains a comprehensive and actionable
contingency funding plan, ready to be activated should a severe liquidity event occur
The effectiveness of the liquidity management is continuously assessed through the measurement
and projection of cash flows on a daily, weekly, and monthly basis, critical periods for liquidity
monitoring. These projections are informed by a detailed analysis of the contractual maturity dates of
financial liabilities and the anticipated collection dates of financial assets, as outlined in Notes 9.3.3.
In its commitment to ensuring robust liquidity, the Bank’s ALCO regularly evaluates the sources
of liquidity. This involves a thorough review aimed at maintaining broad diversification across
various dimensions including currency, geographic location, provider, financial product, and
maturity term.
The table provided below presents a detailed analysis of the Bank’s assets and liabilities,
classified according to their maturity groupings. This classification is based on the remaining
duration from the date of the financial position statement to their respective contractual
maturity dates.
As at 31 December 2022
Liabilities
Deposits from customers 2,728,243 2,387,661 2,289,563 194,680 7,600,147
The Bank strategically holds certain assets to effectively manage and mitigate liquidity risk.
These assets include:
In routine operations, a segment of customer loans that are contractually due within one
year is often extended.
Furthermore, the Bank is equipped to manage unforeseen net cash outflows by liquidating
securities and tapping into alternate funding avenues, such as asset-backed markets.
he table provided below summarizes the contractual dates and amounts related to the Bank’s
T
off-balance sheet financial instruments. These instruments include commitments to extend credit
to customers, as well as outstanding letters of credit, guarantees, and indemnities (Note 41).
Included in the following section are the Bank’s financial guarantees, as detailed in Note 41.
These are presented according to their earliest contractual maturity dates
No later 1-5
then 1 year years Total
TZS’ TZS’ TZS’
Millions Millions Millions
As at 31 December 2023
Guarantee and indemnities 824,388 204,204 1,028,592
Undrawn commitments 319,530 - 319,530
Acceptance and letter of credit 1,067,864 - 1,067,864
As at 31 December 2022
Guarantee and indemnities 498,593 59,632 558,225
Undrawn commitments 242,993 - 242,993
Acceptance and letter of credit 1,150,525 687 1,151,212
In compliance with IFRS 13, the Bank is required to categorize its fair value measurements
within a structured hierarchy. This hierarchy is fundamentally based on the nature and
significance of the inputs used in making the measurements.
To align with these requirements, the Bank has established a hierarchy for valuation
techniques that is differentiated by the observability of the inputs. Observable inputs are
those that are based on market data sourced from independent and reliable entities, while
unobservable inputs are derived from the Bank’s own market assessments and assumptions.
This distinction between observable and unobservable inputs forms the basis of the Bank’s
fair value hierarchy as follows:
• L
evel 1 fair value measurements are those derived from quoted prices (unadjusted) in
active markets for identical assets or liabilities.
• L
evel 2 fair value measurements are those derived from inputs other than quoted prices
included within Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
• L
evel 3 fair value measurements are those derived from valuation techniques that include
inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
This hierarchy requires the use of observable market data when available. The Bank considers
relevant and observable market prices in its valuations where possible.
i) F
air value of the Group financial assets and financial liabilities that are measured at
fair value on recurring basis
The following table gives information about how the fair value of these financial assets and
liabilities are determined:
Relationship
Valuation
Significant of
technique
Fair value at unobservable unobservable
and key
inputs input to fair
inputs
2023 2022 Hierarchy value
TZS TZS Market
Type
Millions Millions observable N/A N/A
inputs
Investment in
government 28,345 28,778 Level 2 Latest
securities transaction
Market
offers the
Equity observable N/A
2,920 2,920 Level 2 equity
instruments inputs
instrument by
TMRC
ii) Fair value of financial assets and liabilities that are not measured at fair value
The Bank assesses the fair value of all financial assets and liabilities.
ii) F
air value of financial assets and liabilities that are not measured at fair value
(continued)
For cash and cash equivalents, loans and advances, customer deposits and borrowed
funds, are evaluated by the Bank based on parameters that takes into account various
factors such as prevailing interest rates and the specific creditworthiness of each
customer. The determination of fair value for these assets and liabilities is conducted
using a discounted cash flow method.
The carrying amount of cash and balances with Bank of Tanzania is a reasonable
approximation of fair value.
Investment in government securities include treasury bonds and treasury bills. The fair
value of government securities held at amortized cost are estimated by discounting
future cash flows using rates currently available for debt on similar terms, credit risk and
remaining maturities, as traded in the primary market by the Bank of Tanzania.
Loans and advances to banks include inter-bank placements and items in the course of
collection. The carrying amount of floating rate placements and overnight advances is a
reasonable approximation of fair value. The estimated fair value of fixed interest-bearing
advances is based on discounted cash flows using prevailing money-market interest
rates for debts with similar credit risk and remaining maturity.
Loans and advances to customers are net of charges for impairment. The estimated fair
value of loans and advances represents the discounted amount of estimated future cash
flows expected to be received. Expected cash flows are discounted at original effective
interest rate to determine fair value.
The estimated fair value of deposits with no stated maturity, which includes non-interest-
bearing deposits, is the amount repayable on demand. The estimated fair value of fixed
interest-bearing deposits not quoted in an active market is based on discounted cash
flows using interest rates for new debts with similar remaining maturity.
Borrowings
ii) Fair value of financial assets and liabilities that are not measured at fair value (continued)
Carrying amount Fair value
Financial assets
Cash and balances
with Bank of Tanzania Level 3 1,340,935 1,551,341 1,333,092 1,551,341
Government securities
at amortized cost
(Treasury bonds) Level 2 1,868,106 1,580,143 1,781,477 1,581,770
Government securities
at amortized cost
(Treasury bills) Level 2 377,154 335,111 374,701 336,598
Placement and
balances with other
banks Level 2 336,759 186,941 355,885 186,941
Loans and advances
to customers Level 2 7,706,924 6,014,603 7,706,925 6,014,603
Other assets
(excluding non-
financial assets) * Level 3 103,521 173,196 298,780 173,196
Financial liabilities
Deposits from
customers Level 3 8,474,683 7,594,832 8,451,959 7,594,832
Deposits from banks Level 2 15,008 12,445 15,158 12,445
Cash and balances with Bank of Tanzania has been transferred between the fair value hierarchy
levels from level 2 to level 3.
*Prepayments, inventory, provision for other assets and stationery are excluded from other assets’
balance, as this analysis is for financial instruments only.
**Non-financial liabilities such as provision and statutory liabilities are excluded from other liabilities
balance, as this analysis is for financial instruments only.
The Bank’s objectives when managing capital, which is a broader concept than the ‘equity’ on the
face of statement of financial positions, are:
• To comply with the capital requirements set by the Bank of Tanzania (BoT);
• To safeguard the Bank’s ability to continue as a going concern so that it can continue to provide
returns for shareholders and benefits for other stakeholders; and
• To maintain a strong capital base to support the development of its business.
Capital adequacy and the use of regulatory capital are monitored daily by the Bank’s management,
employing techniques based on the guidelines developed by the Basel Committee, as implemented
by the Bank of Tanzania (BoT), for supervisory purposes. The required information is filed with the
BoT on a quarterly basis.
When a bank is holding capital conservation buffer of less than 2.5% of risk-weighted assets and
off-balance sheet exposures but is meeting its minimum capital requirements, that bank:
• Shall not distribute dividends to shareholders or bonuses to senior management and other staff
members until the buffer is restored to at least 2.5%;
• Shall submit a capital restoration plan to the Bank of Tanzania within a period specified by BoT,
indicating how the bank is going to raise capital to meet its minimum requirement including
capital conservation buffer within a specified period of time; and
• In the event that BoT does not approve the capital restoration plan, it may direct the bank to raise
additional capital within a specified time period in order to restore its capital conservation buffer.
The Bank’s regulatory capital as managed by its Treasury Department is divided into two tiers:
• ier 1 capital: means permanent shareholders’ equity in the form of issued and fully paid ordinary
T
shares, and perpetual non-cumulative preference shares, capital grants and disclosed reserves
less year to date losses, goodwill organization, pre-operating expenses, prepaid expenses,
deferred charges, leasehold rights and any other intangible assets.
Tier 2 capital: means general provisions which are held against future, presently unidentified
•
losses and are freely available to meet losses which subsequently materialize, subordinated
debts, cumulative redeemable preferred stocks and any other form of capital as may be
determined and announced from time to time by the Bank of Tanzania.
The risk-weighted assets are measured by means of a hierarchy of five risk weights classified
according to the nature of and reflecting an estimate of credit, market and other risks associated
with each asset and counterparty, taking into account any eligible collateral or guarantees. A similar
treatment is adopted for off-balance sheet exposure, with some adjustments to reflect the more
contingent nature of the potential losses.
The table below summarizes the composition of regulatory capital and the ratios of the Bank for the
year ended 31 December 2023 and year ended 31 December 2022. During those two periods, the
Bank complied with all the externally imposed capital requirements to which it is subject.
2023 2022
Note TZS’ Millions TZS’ Millions
Tier 1 capital
Share capital 20,000 20,000
Retained earnings 2,062,118 1,663,475
Less: Prepaid expenses 26(b) (31,807) (25,941)
Less: Deferred tax assets 30(a) (118,324) (109,475)
Total qualifying Tier 1 capital (A) 1,931,987 1,548,059
Tier 2 capital
Subordinated debt - -
Fair valuation reserve 1,550 1,086
Total regulatory capital (D) = [(A) + Lower of (B) or (C)] 1,933,537 1,549,145
2023 2022
Risk-weighted assets
TZS’ Millions TZS’ Millions
On-balance sheet 5,844,312 4,716,207
Off-balance sheet 1,715,637 1,403,908
Market risk 46,136 14,105
Operational risk (b) 705,050 574,404
Total risk-weighted assets (E) 8,311,135 6,708,624
2023
Required 2022
Bank’s ratio
ratio (%) Bank’s ratio (%)
(%)
Tier 1 capital 12.5 23.25 23.08
Tier 1 + Tier 2 capital 14.5 23.26 23.09
The increase in the total regulatory capital in the 2023 is mainly due to the increase of the current-year
profit despite the increase of the off-balance sheet exposure and operational risk capital charge during the
year.
(a) As per Bank of Tanzania requirement, Tier 2 Capital should not exceed 2% of the total risk weighted
assets and off-balance sheet exposure.
(b) Capital charge for operational risk is calculated using Basic Indicator approach (BIA) prescribed
under Basel II by capping net interest income to 3.5% of interest earning assets.
2023 2022
11. INTEREST EXPENSE
TZS’ Millions TZS’ Millions
(a) GROUP
Deposits from customers
- Time deposits 101,841 78,346
- Current accounts 48,500 32,958
- Saving deposits 12,904 11,843
Deposits due to other banks 3,194 404
Borrowings from financial institutions 63,281 29,171
Debt securities in issue 10,416 9,192
Lease liabilities 2,218 2,106
242,354 164,020
(b) BANK
Deposits from customers
- Time deposits 102,441 78,346
- Current accounts 48,500 32,958
- Saving deposits 12,904 11,843
Deposits due to other banks 3,194 404
Borrowings from financial institutions 63,281 31,911
Debt securities in issue 10,416 6,452
Lease liabilities 5,341 5,393
246,077 167,307
(b) Others:
Off-balance sheet items 135 113
Placements and balances with other banks 17 -
Government securities 114 -
Other assets (Note 26) (181) -
85 113
84,435 81,180
(b) BANK
Bad debts recovery 27,659 22,545
Miscellaneous income 542 612
Profit on disposal of property and equipment 294 590
Rental income 6 7
Dividend on TMRC equity investments 55 50
28,556 23,804
2023 2022
16. OTHER OPERATING EXPENSES
TZS’ Millions TZS’ Millions
(a) GROUP
Administrative expenses 55,304 51,276
Cash trip expenses 7,028 9,890
Depositor's Protection Fund Insurance 10,121 8,691
Operating lease rent 561 507
Utilities 19,177 15,719
Security expenses 12,841 10,422
Marketing and advertising expenses 12,015 12,971
Repairs and maintenance 52,083 45,693
Travelling expenses 20,490 13,564
Management contract expenses 2,142 1,564
Other expenses 5,020 1,261
Auditors' remuneration 742 503
Directors' remuneration:
- Fees 360 104
- Others 1,131 363
Impairment charge of other assets (Note 12(b)) - 2,961
199,015 175,499
(b) BANK
Administrative expenses 55,169 50,697
Cash trip expenses 7,028 9,890
Depositor's Protection Fund Insurance 10,121 8,691
Operating lease rent 561 507
Utilities 19,177 15,719
Security expenses 12,841 10,422
Marketing and advertising expenses 12,015 12,971
Repairs and maintenance 52,083 45,693
Travelling expenses 20,490 13,564
Management contract expenses 2,142 1,564
Other expenses 5,020 1,261
Auditors' remuneration 728 503
Directors' remuneration:
- Fees 360 104
- Others 1,131 363
Impairment charge of other assets (Note 12(b)) - 2,961
198,866 174,910
2023 2022
17. DEPRECIATION AND AMORTISATION
TZS’ Millions TZS’ Millions
(a) GROUP
Depreciation of property and equipment (Note 27(a)) 34,935 38,441
Amortization of right-of-use assets (Note 29(a)) 10,663 10,205
Amortization of intangible assets (Note 28) 3,846 4,992
49,444 53,638
(b) BANK
Depreciation of property and equipment (Note 27(b)) 32,904 36,410
Amortization of right of use assets (Note 29(b)) 13,579 13,107
Amortization of intangible assets (Note 28) 3,846 4,992
50,329 54,509
a) GROUP (Continued)
The tax on the Group’s profit differs from the theoretical amount that would arise using the statutory
income tax rate as follows:
2023 2022
Reconciliation of accounting profit to income tax expense:
TZS’ Millions TZS’ Millions
b) BANK
Deferred tax:
In respect of current year (Note 30(b)) (4,038) (15,464)
In respect of prior year (Note 30(b)) (5,010) (512)
(9,047) (15,976)
Income tax expense 228,599 182,235
b) Bank (Continued)
The tax on the Bank’s profit differs from the theoretical amount that would arise using the statutory
income tax rate as follows:
2023 2022
Reconciliation of accounting profit to income tax expense:
TZS’ Millions TZS’ Millions
Profit before income tax 770,367 611,611
Tax calculated at the statutory income tax rate of 30% (2022: 30%) 231,110 183,486
Tax effect of:
Depreciation on non-qualifying assets 272 171
Net under provision of deferred tax and current tax in prior year 5,476 3,704
Current income tax - Under provision in prior year 6,384 -
Expenses not deductible for tax purposes (5,010) (512)
Non-taxable commission income (9,617) (4,599)
Dividend on equity instrument (16) (15)
Income tax expense 228,599 182,235
2023 2022
TZS’ Millions TZS’ Millions
At start of the year (1,720) 20,678
Current tax expense (Note 18(a)) (238,641) (198,908)
Tax refund - (11,746)
Tax paid 251,330 188,256
Tax receivable/(payable)* - net 10,969 (1,720)
*Group current tax receivable/(payable) at the reporting date was current tax asset of TZS 10,969
million (2022: 3,882 million) and nil current tax liabilities (2022: TZS 5,602 million).
2023 2022
TZS’ Millions TZS’ Millions
At start of the year (5,602) 17,634
Current tax expense (Note 18(b)) (237,646) (198,211)
Tax refund - (11,746)
Tax paid 251,031 186,721
Tax receivable/(payable) 7,783 (5,602)
There being no dilutive or dilutive potential share options, the basic and diluted earnings per share are the
same.
The calculation of the basic earnings per share was based on the net profit attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding during the year, calculated
as follows:
(a) GROUP
2023 2022
(b) BANK
Dividends are not recognised as a liability until they have been ratified at the Annual General Meeting. The
Directors propose payment of a dividend of TZS 361.18 per share, amounting to TZS 180,589 million out
of 2023 profit. In 2023, dividend of TZS 286.25 per share, amounting to TZS 143,125 million was approved
and paid in respect of the year ended 31 December 2022.
21. CASH AND BALANCES WITH BANK OF TANZANIA (GROUP AND BANK)
2023 2022
TZS’ Millions TZS’ Millions
Cash in hand 549,108 474,888
- Local currency 439,034 382,228
- Foreign currency 110,074 92,660
Balances with Bank of Tanzania 286,335 615,713
- Local currency 61,982 369,006
- Foreign currency 224,353 246,707
Statutory Minimum Reserves (SMR)* 505,491 460,740
1,340,934 1,551,341
Current 1,340,934 1,551,341
*The SMR deposit is not available to finance the Bank’s day-to-day operations and hence excluded
from cash and cash equivalents for the purpose of the cash flow statement (Note 38). Cash in hand and
balances with Bank of Tanzania are non-interest bearing.
22. PLACEMENTS AND BALANCES WITH OTHER BANKS (GROUP AND BANK)
2023 2022
TZS’ Millions TZS’ Millions
Balances with banks abroad 220,936 15,834
Placement with local banks
- Local currency 10,082 129,313
- Foreign currency - 4,728
Placements with banks abroad 100,520 -
Letter of credit discounting arrangements 5,221 37,066
336,759 186,941
Current 336,759 186,941
Using prevailing market interest rate for staff loans with a carrying amount of TZS 302,170 million (2022:
*1
TZS 258,018 million), the fair value is estimated to be TZS 257,617 million (2022: TZS 224,453 million).
Prepaid staff benefit is the difference between the gross carrying amount and the fair value of staff loans
*2
issued below market rate. It is deferred and amortized to profit and loss on a straight-line basis over the
tenure of the facility. The unwinding of the benefit is the difference between cumulative interest income
using market rate and staff rate.
*The gross loans and advances to customers consists of outstanding principal, interest receivable and it
is net of interest in suspense amounting to TZS 21,248 million (2022: TZS 23,115 million).
Maturity analysis is based on the remaining periods to contractual maturity from year-end
2023 2022
TZS’ Millions TZS’ Millions
Maturing:
Within 1 year 2,045,003 1,592,624
Between 1 year and 5 years 2,227,578 2,722,626
Over 5 years 3,434,344 1,927,426
7,706,925 6,242,676
The following table shows the movement in expected credit losses that has been recognized for loans and
advances to customers
2023 2022
TZS’ Millions TZS’ Millions
At 1 January 228,073 209,986
Increase in expected credit loss recognised in the year (Note 12(a)) 84,350 81,067
Decrease in expected credit loss from derecognition of financial assets in
(69,722) (62,980)
the year
Gross loans and advances to customers* 242,701 228,073
2023 2022
TZS’ Millions TZS’ Millions
Treasury bills 377,154 335,111
Treasury bonds 1,861,520 1,576,624
Corporate bonds 6,586 3,519
2,245,260 1,915,254
Current 573,000 452,574
Non-current 1,672,260 1,462,680
2,245,260 1,915,254
Treasury bills and bonds are debt securities issued by the Government of the United Republic
of Tanzania. In the current year, the effective interest rate stood at 9.2% (2022: 8.6%). As at 31
December 2023, there were no treasury bills which were pledged as collateral. However, treasury
bonds with a face value of TZS 158,655 million (2022: TZS 67,677 million) were pledged as security
for borrowings from Bank of Tanzania under the Agribusiness special loan program. Corporate bonds
include Sukuk bonds which are sharia-compliant bonds which are measured at amortized cost.
2023 2022
The movement in investment securities is summarized as follows:
TZS’ Millions TZS’ Millions
At 1 January 1,915,254 1,683,950
Interest income (Note 10) 206,092 162,816
Additions 932,548 721,384
Interest received (203,103) (147,162)
Proceeds from disposal (37,999) -
Matured securities (569,279) (505,734)
Realized gain on disposal credited to profit or loss 1,747 -
At 31 December 2,245,260 1,915,254
2023 2022
TZS’ Millions TZS’ Millions
At 1 January 28,778 55,330
Interest income (Note 10) 2,705 4,674
Realized gain on fair valuation credited to profit or loss 5,780 5,353
Unrealized fair valuation gain/(loss) to OCI (Note 37 (iv)) 663 821
Additions 568,500 133,443
Interest received (8,990) (9,954)
Proceeds from disposal (569,090) (160,889)
At 31 December 28,345 28,778
Non-current 28,345 28,778
(a) GROUP
TMRC is a private company and there is no quoted market price available for the shares. On
adoption of IFRS 9 the investment was re-measured at fair value through other comprehensive
income. Fair value was determined by observing a recent transaction in the market. As at 31
December 2023, the Bank had 1,800,000 shares (2022: 1,800,000) in TMRC. The dividend that
was declared during the year amounted to TZS 55 million (2022: TZS 50 million).
(b) BANK
The Bank has equity investments in TMRC, and a subsidiary named Upanga Joint Venture
Company Limited (UJVC).
2023 % 2022 %
Company name TZS’ Share- TZS’ Share-
Millions holding Millions holding
Upanga Joint Venture Company Limited 39,639 88 39,639 88
b) Bank (Continued)
There are no contingent liabilities relating to the Bank’s interest in the subsidiary.
There are no restrictions to the Bank in gaining access or use of assets of the subsidiary and settling
liabilities of the Group.
The subsidiary (UJCV) listed above has share capital consisting solely of ordinary shares. The
country of incorporation; the United Republic of Tanzania is also their principal place of business.
There were no significant judgements and assumptions made in determining the Bank’s interest in
the subsidiary.
Set out below is the summarized financial information of Upanga Joint Venture Company Limited
(UJVC).
2023 2022
TZS’ Millions TZS’ Millions
Summarized statement of financial position
Current
Assets 15,305 10,781
Liabilities (1,658) (2,040)
Total net current assets 13,647 8,741
Non-current
Assets 27,790 29,821
Total non-current net assets 27,790 29,821
Total net assets 41,437 38,562
b) Bank (Continued)
2023 % 2022 %
Company name TZS’ Share- TZS’ Share-
Millions holding Millions holding
Tanzania Mortgage Refinance Company Ltd 2,920 7.81 2,920 7.81
(a) GROUP
2023 2022
TZS’ Millions TZS’ Millions
Service fees receivable 6,377 5,577
Prepayments 31,886 26,019
Other receivables 80,700 107,738
Staff imprests 111 103
Stationery Stock 1,859 1,262
Bank card inventory 6,208 2,988
Balances due to related parties 1,534 1,534
Cheques and items for clearance (1,432) 34,392
Balances with Mobile Network Operators 18,593 23,852
Less: Expected Credit Losses (135) (2,597)
145,701 200,868
Current 134,471 200,260
Non-current 11,230 608
145,701 200,868
(a) GROUP
Computers,
Leasehold Motor furniture and Capital work in
Own building improvement vehicles equipment progress* Total
TZS’ TZS’ TZS’ TZS’ TZS’ TZS’
Year ended 31 December 2023 Millions Millions Millions Millions Millions Millions
COST
At 1 January 2023 134,139 102,161 21,392 257,815 4,107 519,614
Additions 71 357 4,627 18,055 10,524 33,634
Transfers from WIP 2,600 5,914 76 1,100 (9,722) (32)
Transfer from prepayments - - 2,035 5,492 (88) 7,439
Disposal - (199) (272) (27,629) - (28,100)
At 31 December 2023 136,810 108,233 27,858 254,833 4,821 532,555
DEPRECIATION
At 1 January 2023 52,893 60,272 18,596 212,716 - 344,477
Charge for the year 6,204 7,785 1,538 19,408 - 34,935
Disposal - (162) (104) (27,437) - (27,703)
At 31 December 2023 59,097 67,895 20,030 204,687 - 351,709
NET BOOK VALUE
At 31 December 2023 77,713 40,338 7,828 50,146 4,821 180,846
*The capital work in progress relates to the ongoing projects of branch renovations, network equipment and ongoing security system projects. No property
and equipment of the Group and Bank has been pledged as security for liabilities.
*The capital work in progress relates to the ongoing projects of branch remodelling. No property and equipment of the Group and Bank has been pledged
as security for liabilities.
*The capital work in progress relates to the ongoing projects of branch renovations, network equipment and ongoing security system projects. No property
and equipment of the Group and Bank has been pledged as security for liabilities.
DEPRECIATION
*The capital work in progress relates to the ongoing projects of branch re-modelling. No property and equipment of the Group and Bank has been pledged
as security for liabilities.
Amortization
At 1 January 77,603 - 77,603
Charge for the year 3,846 - 3,846
At 31 December 81,449 - 81,449
Net book value 20,334 17,013 37,347
2022
Cost:
At 1 January 79,740 6,759 86,499
Additions 847 8,547 9,394
Transfers (34) 34 -
Amortization
At 1 January 72,611 - 72,611
Charge for the year 4,992 - 4,992
The software work in progress relates to costs towards development of new agency banking system,
internet banking, Mkononi revamp, Micro lending and other small systems
29. LEASES
2023 2022
(a) RIGHT TO USE ASSETS GROUP
TZS’ Millions TZS’ Millions
At 1 January 27,063 26,754
Additions 939 10,514
Modification 7,893 -
Amortisation charge (10,663) (10,205)
At 31 December 25,232 27,063
All leases relate to properties used as office, branch or ATM outlets. Total cash out flow for leases in 2023
for Group and Bank amounted to TZS 13,228 million (2022: TZS 8,532 million) and TZS 18,149 million
(2022: TZS 13,454 million) respectively. During the year there was an addition of TZS 939 million for the
Group and Bank respectively.
Deferred income tax is calculated on all temporary differences under the liability method using a
principal tax rate of 30%. The movement on the deferred income tax account is as follows:
2023 2022
TZS’ Millions TZS’ Millions
At start of year 109,475 93,799
Credit to profit or loss:
In respect to current year (Note 18(b)) 4,038 15,463
In respect of prior year: (Under)/Over provision (Note 18(b)) 5,010 512
Debit to OCI:
In respect of current year (199) (299)
At the end of year 118,324 109,475
Deferred income tax asset and deferred income tax credit to the profit or loss are attributed to the
following items:
(Charged)/credited to
Year ended 31 December 2023
profit or loss in respect of
Current Charged 31
1 January year Prior years to OCI December
TZS’ TZS’ TZS’ TZS’ TZS’
Deferred income tax asset Millions Millions Millions Millions Millions
Impact to profit and loss
Property and equipment 14,137 (3,424) - - 10,713
Provisions for loan impairment 68,381 9,481 - - 77,862
Other provisions 22,484 (2,019) 5,010 - 25,475
Other temporary differences 4,938 - - - 4,938
Impact to reserve
Fair valuation gain – equity (354) - - - (354)
Fair valuation gain – debt (111) - - (199) (310)
109,475 4,038 5,010 (199) 118,324
(Charged)/credited to
Year ended 31 December 2022
profit or loss in respect of
Current Charged 31
1 January year Prior years to OCI December
TZS’ TZS’ TZS’ TZS’ TZS’
Deferred income tax asset Millions Millions Millions Millions Millions
Impact to profit and loss
Property and equipment 12,812 1,325 - - 14,137
Provisions for loan impairment 62,992 5,389 - - 68,381
Other provisions 17,849 4,635 - - 22,484
Other temporary differences 312 4,114 512 - 4,938
Impact to reserve
Fair valuation gain – equity (354) - - - (354)
Fair valuation gain – debt 188 - - (299) (111)
93,799 15,463 512 (299) 109,475
Deferred income tax is calculated on all temporary differences under the liability method using a
principal tax rate of 30%. The movement on the deferred income tax account is as follows:
(Charged) /
As 1 credited to At 31
January profit or loss December
Year ended 31 December 2023 1,418 (561) 857
Investment property
Total 1,418 (561) 857
Year ended 31 December 2022
Investment property 858 560 1,418
Total 858 560 1,418
Deferred income tax liability and deferred income tax charge/credit to the profit or loss are attributed
to the following items:
2023 2022
TZS’ TZS’
Millions |Millions
Investment property 857 1,418
Deferred tax liability recognized 857 1,418
(a) GROUP
8,465,608 7,594,832
(b) BANK
Accrued expenses 15,666 14,118
Bonus payable 18,242 15,536
Deferred processing fees 59,273 49,902
Bills payable 1,983 2,178
Statutory liabilities 36,296 32,539
Provisions for TRA assessments 13,693 9,021
Insurance premium payable 11,616 7,804
Commission payable to NMB agents 4,902 4,608
Cheques and items for clearance 7,380 5,665
Provisions 45 294
Commission received in advance; LCs and Guarantees 1,715 1,765
Sundry liabilities 28,484 10,063
Expected credit losses for off-balance sheet items (Note 9.1.5 e) 411 276
Total 199,706 153,769
Current 150,126 112,734
Non-current 49,580 41,035
199,706 153,769
The amounts represent provision for certain legal claims brought against the Bank by third parties in the
course of business. In the directors’ opinion, after taking appropriate legal advice, the outcome of these
legal claims will not give rise to any significant loss beyond the amounts provided as at 31 December
2023.
As at 31 December 2023, the Group had no borrowing at default and was in compliance with all covenants.
As at 31 December 2023, the Bank had outstanding balance of TZS 33 billion (2022: TZS 525
million). The loan is payable semi- annually for seven years in equal installments starting in April
2025 at an effective rate of 14.19% (2022:9.31%)
The loan is part of EUR 100 million Gender and Blue Economy financing that can be drawn down in
either EUR, USD, or TZS. As of 31 December 2023, the remaining portion of the loan amount was
yet to be drawn.
As at 31 December 2023, the Bank had unsecured loan of USD 125 million repayable semi-annually
within six years and carries a floating rate based on six months Term SOFR plus a margin of 2.85%.
The first installment of this loan is due for repayment in June 2024 while the last installment is due
for repayment in December 2028. The outstanding balance as at 31 December 2023 was USD 125
million equivalent to TZS 314,375 million (2022: USD 125 million equivalent to TZS 314,375 million
equivalent to TZS 295,600 million)
Jamii Bond
On 25 September 2023 the Bank issued the first tranche of NMB Multicurrency Medium Term Note
(MTN) Programme worth Tanzanian Shillings One Trillion (TZS 1,000,000,000,000) dubbed JAMII
Bond. The Bank issued two series of notes denominated in TZS and USD;
• TZS: The Bank issued a TZS 75 billion 3-year bond targeted towards the retail and institutional
investor segment; offering a gross coupon rate of 9.5% and issued at par. The coupon on the bond
is paid quarterly. The offer period closed on 27 October 2023 with market demand exceeding
expectations. The bond subscription rate was 284% with the Bank receiving applications from
investors amounting to TZS 212.94 billion;
• USD: The Bank issued a USD 10 million 3-year bond targeted towards the off shore institutional
investor segment; offering a gross coupon rate of 6 Month TERM SOFR +2.50% and issued at
par. The coupon on the bond is semi-annually. The offer period closed on 8 December 2023 with
market demand exceeding expectations. The bond subscription rate was 730% with the Bank
receiving applications from investors amounting to USD 73 million;
• The bond is unsecured and the two notes series are tradable on the Dar es Salaam Stock
Exchange (DSE);
• Jamii Bond is a Sustainability Bond issued under the Bank Sustainable Financing Framework
that is in alignment with International Capital Markets Association (ICMA) and Multilateral
Development Bank (MDB) principles. The framework secured Second Party Opinion (SPO) from
Sustainalytics;
• Use of Proceeds: The Bank intends to allocate an amount of funding equivalent to the net
proceeds of this tranche of Notes to finance new eligible loans/assets and/or refinance existing
eligible loans/assets, in whole or in part, that meet the eligibility criteria detailed in the green and
social categories as defined in the NMB Sustainable Finance Framework.
Sustainable Bond
On 7 February 2022, the Bank issued the fourth and final tranche of the 2016 MTN program
dubbed Jasiri Bond. The Bank issued a TZS 25 billion 3-year bond targeted towards the retail and
institutional investor segment; offering a gross coupon rate of 8.5% and issued at par. The coupon on
the bond is paid quarterly. The offer period closed on 21 March 2022 with market demand exceeding
expectations. The bond was oversubscribed by 197% with the Bank receiving applications from
investors amounting to TZS 74.3 billion.
Jasiri Bond is the Bank first Gender Bond in the whole of Sub-Saharan Africa (SSA) whose framework
aligns with Social Bond Principles administered by the International Capital Market Association. The
debut issuance under the bank Social Bond Framework focuses exclusively on gender equality and
economic empowerment of women (SDG-5 specifically) by channelling its proceeds to women-owned
or led businesses and those businesses whose products and services directly benefit a woman. The
Bond will also have impact on other broad-based SDGs impacted through financing of economic
activities under SMEs.
The bond is unsecured and is tradable on the Dar es Salaam Stock Exchange (DSE).
As at 31 December 2023, the NMB 2016 MTN program was fully exhausted after the issuance of
fourth tranche.
The issuance of the bonds is part of the Bank’s strategy to diversify its funding sources.
As at 31 December 2023 the balance was TZS 16.7 billion (2022: TZS 11.7 billion). The balance
was made up of three tranches which were taken to finance the portfolio of mortgage loans and all
tranches were renewable.
At the end of 2017, the Bank had borrowed from Tanzania Mortgage Refinance Company Limited
(TMRC) a renewable loan of TZS 1.7 billion maturing in 48 months and carrying a fixed rate of 11.5%
p.a. The loan is secured by specific debenture over the portfolio of mortgage loans covering at least
125% of the loan amount. The loan was renewable in 2020 at a fixed price of 7.5%.
In 2018, the Bank secured an additional TZS 5 billion loan with a 3-year tenor at a fixed interest rate
of 11.5%. The loan is secured by a portfolio of treasury bonds with a coverage ratio of at least 105.3%
and minimum remaining tenor of 3 years from the date of disbursement. The loan was renewable in
2021 at a fixed price of 7.5%.
In 2019 the Bank secured additional TZS 5 billion loan with a 3-year tenor at a fixed interest rate of
9%. The loan is secured by a portfolio of treasury bonds with a coverage ratio of at least 105.3% The
loan was renewable in 2023 at a fixed price of 7.5%.
In 2020, the Bank obtained an unsecured loan of TZS 50 billion repayable semi-annually within five
to six years and carries a fixed rate of 10.50%. The outstanding balance as at 31 December 2023
was TZS 21,428 million (2022: TZS 35,714 million).
During the year 2022, the Bank converted the subordinate loan of TZS 68.19 billion to a senior loan
which carried a reduced interest rate. As at 31 December 2023 the balance was TZS 51,142 million
(2022: TZS 68,190 million). The effective interest rate was 11.93%. The loans were taken for better
Assets Liability management. The loan is unsecured.
During the year 2023, the Bank obtained an unsecured loan of USD 100 million being a COVID- 19
Working Capital Solution Facility. The loan is repayable in 2 years as a bullet and was drawn down
in both USD and TZS. The USD portion is based on six months Term SOFR plus a margin of 1.95%
while the TZS portion carries a fixed interest rate of 13.70%. As at 31 December 2023, the Bank had
outstanding amounts of USD 70 million and TZS 62,875 million of this loan
Moreover, during the year 2023 the Bank rolled over USD 20 million of the IFC GWFP facility for 1
year. The loan has a bullet maturity and carries an interest rate of 6 months term SORF plus a margin
of 1.50%
In September 2022, the Bank borrowed from BOT an amount of TZS 57.9 billion repayable in 3
months carrying a fixed rate with an option to renew. Furthermore in 2023, the Bank borrowed from
BOT two more loans with amounts of TZS 70 billion and TZS 30 billion repayable in 3 months with
an option for renewal. The effective interest rate for all these loans is 3%. The loans were taken for
the purpose of promoting credit to private sector particularly small-scale farmers. These loans are
secured by treasury bonds.
The movement of the individual components is available in Note 29, Note 35 and the statement of cash
flows.
2023 2022
37. CAPITAL AND RESERVES TZS’ TZS’
Millions Millions
(i) Share capital
Authorized
625,000,000 ordinary shares of TZS 40 each 25,000 25,000
Called up and fully paid
500,000,000 ordinary shares of TZS 40 each 20,000 20,000
There was no reclassification adjustment made in respect to components of other comprehensive income.
38. CASH AND CASH EQUIVALENTS (GROUP AND BANK) 2023 2022
TZS’ TZS’
Millions Millions
Cash and balances with Bank of Tanzania (Note 21) 1,340,934 1,551,341
Less: Statutory Minimum Reserves (Note 21) (505,491) (460,740)
Placement and balances with other banks (Note 22) 336,759 186,941
1,172,202 1,277,542
For the purposes of the cash flow statement, cash and cash equivalents comprise balances with less than
91 days maturity from the date of acquisition including: cash and balances with Bank of Tanzania and
Placement with other banks. Cash and cash equivalents exclude the cash reserve requirement (SMR)
held with the Bank of Tanzania.
2023 2022
Note TZS’ TZS’
Millions Millions
(b) BANK
Operating activities
Profit before tax 770,367 611,611
Adjustment for:
Depreciation and amortization 17 50,329 54,509
Gain on modification of lease 29 284 (5)
Profit on disposal of property and equipment 14 (294) (590)
Realised gain on government security - FVOCI 24(b) (5,780) (5,353)
Realised gain on disposal of government securities at
24(a) (1,747) -
amortized cost
Interest income from government security - FVOCI 24(b) (2,705) (4,674)
Interest income from government security amortised
24(a) (206,092) (162,816)
at cost
Interest expense on lease 11(b) 5,341 5,393
Interest expense on borrowings 35 73,697 38,362
Foreign exchange loss on borrowings 35 26,574 4,073
Foreign exchange loss on lease liability 152 118
Credit impairment charge 84,435 81,067
Dividend income 14 (55) (50)
794,506 621,645
Movement in operating assets:
Statutory Minimum Reserve (44,751) (23,987)
Net investment in securities at FVOCI 591 27,466
Loans and advances to customers (1,776,672) (1,441,737)
Other assets 55,801 (85,322)
Deposits from customers 874,531 935,886
Deposits due to other banks 2,563 12,037
Other liabilities 45,851 10,167
Provisions 34 352 770
Cash (used in)/generated from operations (47,228) 56,905
*The cash flow statement for the comparative period ended 31 December 2022 has been updated to make
the following enhancement as required by IAS 7:31 and has a nil impact.
• Investment and proceeds from investment securities at FVOCI have been reclassified from cash
flows from investing activities to operating activities which amounts to TZS 133,443 million and TZS
160,889 million respectively.
• Interest received from investments in securities held at FVOCI and HTM amounting to TZS 9,954
million and TZS 147,162 million and interest paid on borrowings and leases amounting to TZS 40,673
million and TZS 5,247 million have been reclassified from cash flows from investing activities and
financing activities to operating activities.
As at 31 December 2022
Financial assets
Cash and balances with Bank of Tanzania 1,551,341 - 1,551,341
Investment securities – at amortised cost 1,915,254 - 1,915,254
Investment securities – FVOCI - 28,778 28,778
Placement and balances with other banks 186,941 - 186,941
Loans and advances to customers 6,014,603 - 6,014,603
Equity investments - 2,920 2,920
Other assets (excluding non-financial assets) * 171,467 - 171,467
9,839,606 31,698 9,871,304
2023 2022
Financial liabilities at amortised cost TZS’ TZS’
Millions Millions
Deposits from customers 8,465,608 7,594,741
Deposits due to other banks 15,008 12,445
Borrowings 1,380,193 749,354
Lease liabilities 28,844 28,172
Other liabilities (excluding non-financial liabilities) ** 143,599 120,954
10,033,252 8,505,666
*Prepayments, inventory, provision for other assets and stationery are excluded from other assets
balance, as this analysis is for financial instruments only.
**Non-financial liabilities such as provision and statutory liabilities are excluded from other liabilities
balance, as this analysis is for financial instruments only.
As at 31 December 2022
Financial assets
Cash and balances with Bank of Tanzania 1,551,341 - 1,551,341
Investment securities – at amortised cost 1,915,254 - 1,915,254
Investment securities – FVOCI - 28,778 28,778
Placement and balances with other banks 186,941 - 186,941
Loans and advances to customers 6,014,603 - 6,014,603
Equity investments - 2,920 2,920
Other assets (excluding non-financial assets) * 171,467 - 171,467
9,839,606 31,698 9,871,304
2023 2022
Financial liabilities at amortised cost TZS’ TZS’
Millions Millions
Deposits from customers 8,474,678 7,600,149
Deposits due to other banks 15,008 12,445
Borrowings 1,380,193 749,354
Lease liabilities 65,193 68,733
Other liabilities (excluding non-financial liabilities) ** 147,606 120,954
10,082,678 8,551,635
*Prepayments, inventory, provision for other assets and stationery are excluded from other assets
balance, as this analysis is for financial instruments only.
**Non-financial liabilities such as provision and statutory liabilities are excluded from other liabilities
balance, as this analysis is for financial instruments only.
In common with other banks, the Bank conducts business involving acceptances, letters of credit,
guarantees, performance bonds and indemnities. The majority of these facilities are offset by
corresponding obligations of third parties.
As at 31 December 2023, the Bank had the contractual amounts of off-balance sheet financial
instruments that commit it to extend credit to customers, guarantee and other facilities, as follows: -
2023 2022
Commitments TZS’ TZS’
Millions Millions
Guarantees and indemnities 1,028,592 558,225
Undrawn commitments 319,530 242,993
Acceptances and letters of credit 1,067,864 1,151,212
2,415,986 1,952,430
An acceptance is an undertaking by a bank to pay a bill of exchange drawn on a customer. The
Bank expects most acceptances to be presented, and reimbursement by the customer is normally
immediate. Letters of credit commit the Bank to make payments to third parties, on production of
documents, which are subsequently reimbursed by customers.
Some previous loan customers and ex-employees are suing the Bank for various reasons. With the
exception of amounts disclosed in Note 34, the amounts claimed in both situations are not material
and professional advice indicates that it is unlikely that any significant loss will arise.
As at 31 December 2023, the Bank had capital commitments of TZS 111,721 million (2022: TZS
79,956 million) The expenditure contracted as at the end of reporting period but not yet incurred is as
follows:
The Bank’s management is confident that future net revenues and funding will be sufficient to cover
these commitments.
As of 31 December 2023, the Group and Bank had short term lease commitments of TZS 291 million
(2022: TZS 474 million).
42. EFFECTIVE INTEREST RATES OF FINANCIAL ASSETS AND LIABILITIES (GROUP AND BANK)
The effective interest rates for the principal financial assets and liabilities at 31 December 2023 were as
follows:
2023 2022
% %
Investment securities 9.28 8.75
Placements and balances with other banks 3.55 5.50
Loans and advances to customers 12.44 12.90
Deposits from customers 1.93 1.62
Deposits due to other banks 21.28 3.25
Borrowings 5.34 5.12
number of banking transactions are entered into with related parties in the normal course of business.
A
These include loans, deposits and foreign currency transactions.
The volumes of related party transactions, outstanding balances at year-end, and related expense and
income for the year are as follows:
At 31 December 2023 there were no loans issued to companies controlled by the Directors or
their families. Advances to customers as of 31 December 2023 include loans to key management
personnel and Directors as follows:
Provision recognized in respect of loans given by the Group and Bank to key management personnel
amounted to TZS 46 million (2022: TZS 27 million) in line with IFRS 9 requirements. Mortgage loans
issued to key management were secured and the rest were unsecured. These loans carry off-market
interest rates ranging between 5% and 9%. As of 31 December 2023, the Group and Bank held
collateral valued at TZS 2,892 million (2022: TZS 2,258 million) with respect to loans and advances
to senior management and Directors.
The Lending to key management personnel includes lending to the Directors amounting to TZS 269
million as at 31 December 2023 (2022: TZS 208 million), which were charged at market (commercial)
interest rate.
The above deposits are unsecured, carry variable interest rate and are repayable on demand.
Related companies included in this disclosure is Upanga Joint Venture Company Limited.
Based on the management service contract approved by the Board, a total of TZS 450 million (2022:
TZS 476 million) was paid to Rabobank during the year as management and technical assistance
expenses. Management fees payable as at year-end was TZS 344 million (2022: TZS 142 million).
Nostro balances with Rabobank at year-end amounted to TZS 31,818 million (2022: TZS 16,744
million). There was no inter-bank balance due to Rabobank as at year-end. The Bank did not incur
any expenses which were refundable from Rabobank (2022: Nil).
During the year, the Bank made lease payments of TZS 5 billion to Upanga Joint Venture Limited
(2022: TZS 5 billion). The Bank charged UJVC management fee in the sum of TZS 27.65 million
(2022: 27.65 million). As at 31 December the balance payable to the Bank for the management fee
amounted to TZS 165.9 million (2022: TZS 138.2 million).
The Bank occasionally settles expenses on behalf of UJVC. As of December 31, 2023, the Bank’s
receivables from UJVC was TZS 1.53 billion (2022: TZS 1.53 billion), whereas ECL was TZS 157
million (2022: TZS 490 million).
Key management personnel are described as those persons having authority and responsibility for
planning, directing and controlling the activities of the Bank, directly or indirectly. The compensation
made to expatriates from Rabobank is included in the management service contract highlighted in
part (c) above and therefore excluded in the above benefits.
(f) Transactions and balances with Government of Tanzania (GROUP AND BANK)
The Government of Tanzania owns 31.8% (2022: 31.8%) of the equity of the Bank. The Bank
invested in government securities during the year and at the year-end the amount receivable from
the Government of Tanzania in the form of treasury bills and bonds amounted to TZS 2,273,605
million (2022: TZS 1,940,532 million). Interest earned from investment in government securities
during the year was TZS 208,383 million (2022: TZS 167,489 million), Service fee earned from the
government due to transactional services performed amounted to TZS 469 million (2021: TZS 2,177
million). For balances outstanding as at 31 December 2023 and 31 December 2022, expected credit
loss provided stood at TZS 114 million (2022: TZS 882million). The Bank also accepts deposits from
various government institutions and agencies which do not attract interest.
Fees and other emoluments paid to Directors of the Bank during the period amounted to TZS 1,447
million (2022: TZS 752 million). Details of payment to individual Directors will be tabled at the Annual
General Meeting.
44. BANCASSURANCE
The revenue generated from bancassurance services for the year ended 31 December 2023 amounted to
TZS 14,070 million (2022: TZS 8,280 million) while costs incurred amounted to TZS 1,789 million (2022:
TZS 862 million) resulting to the net income of TZS 12,227 million (2022: TZS 7,361 million). The income
from of bancassurance for the Group and Bank has been disclosed as part of net fees and commission
income in note 13.
There were no events after the reporting period, not otherwise dealt with in these financial statements, that
had material impact to the consolidated and Bank financial statements.
Notice is hereby given that the 24th Annual General Meeting of NMB Bank Plc
Shareholders will be held Virtually on Friday, 7th June 2024 at 10.00 a.m.
The agenda will be as follows:
24.5 TO RECEIVE, CONSIDER AND ADOPT THE DIRECTORS’ REPORT AND AUDITED
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2023
Network
Distribution
DSM Zone
Branch Name Region District Street/ Road Telephone
Airport Dar es Salaam Ilala Nyerere road 022-232-4200
Bank House Dar es Salaam Ilala Samora ave/Pamba road 022-232-4128
Congo Street Dar es Salaam Ilala Congo street 022-232-4154
Gongo la Mboto Dar es Salaam Ilala Nyerere Rd 022-232-4160
Ilala Dar es Salaam Ilala Uhuru road 022-232-4116
Kariakoo Dar es Salaam Ilala Livingstone St 022-232-4112
Kariakoo Business Center Dar es Salaam Ilala Mafia/Swahili street 022-232-4205
Mandela Road Dar es Salaam Ilala Mandela Rd, TOT Tabata area 022-232-4157
Morogoro Road Dar es Salaam Ilala Morogoro road/ Mshihiri 022-232-4104
Muhimbili Dar es Salaam Ilala Kalenga 022-232-4141
Ohio Dar es Salaam Ilala Ohio/Ali Hassan Mwinyi 022-232-2726
Kigamboni Dar es Salaam Kigamboni Ferry street 022-232-4174
Magomeni Dar es Salaam Kinondoni Morogoro road 022-232-4108
Mbezi Dar es Salaam Kinondoni Bagamoyo Road 022-232-4163
Mlimani City Dar es Salaam Kinondoni Sam Nujoma road 022-232-4120
Msasani Dar es Salaam Kinondoni Kimweri Avenue 022-232-4190
Bagamoyo Pwani Bagamoyo Bank street 022-232-4267
Chalinze Pwani Bagamoyo Chalinze-Dar RD, Chalinze area 022-232-4227
Kibaha Pwani Kibaha Maili moja- mkoani 022-232-4261
Mlandizi Pwani Kibaha Morogoro road, Mlandizi stand 022-232-4276
Kisarawe Pwani kisarawe Sokoni 022-232-4264
Mafia Pwani Mafia Kilindoni 022-232-4197
Mkuranga Pwani Mkuranga Bank street 022-232-4270
Kibiti Pwani Rufiji Lindi-kibiti rd 022-232-4273
Tandika Dar es Salaam Temeke Bus stand, Ugweno Street 022-232-4194
Temeke Dar es Salaam Temeke Temeke street/Mbagala road 022-232-4100
TPA Bandari Dar es Salaam Temeke TPA, Mandela Rd 022-232-4126
Mbezi Louis area opp. Old
Mbezi Louis Dar es Salaam Ubungo 022-232-4212
Morogoro road
Bagamoyo Pwani Bagamoyo Bank street 022-232-4267
Chalinze Pwani Bagamoyo Chalinze-Dar RD, Chalinze area 022-232-4227
Kibaha Pwani Kibaha Maili moja- mkoani 022-232-4261
Mlandizi Pwani Kibaha Morogoro road, Mlandizi stand 022-232-4276
Kisarawe Pwani kisarawe Sokoni 022-232-4264
Mafia Pwani Mafia Kilindoni 022-232-4197
Mkuranga Pwani Mkuranga Bank street 022-232-4270
Kibiti Pwani Rufiji Lindi-kibiti rd 022-232-4273
Central Zone
Branch Name Region District Street/ Road Telephone
Mission street/Bahi Distr.
Bahi Dodoma Bahi 022-232-4054
Building
Chamwino Ikulu/Chamwino
Chamwino Dodoma Chamwino 022-232-4051
Distr. Building
Bunge Dodoma Dodoma Parliament Grounds, Uzunguni 022-232-4009
Dodoma Dodoma Dodoma One Way / Kuu Street 022-232-4060
PSPF building, 18 Jakaya
Kambarage Dodoma Dodoma 022-232-4072
Kikwete rd, adjacent to BOT
Makole Business Center Dodoma Dodoma Kuu Street / Nyerere rd 022-232-4066
Mazengo Dodoma Dodoma Kuu Street 022-232-4063
UDOM Dodoma Dodoma Nyerere 022-232-4006
Kondoa Dodoma Kondoa Chem Chem 022-232-4024
Kibaigwa Dodoma Kongwa Dodoma Highway 022-232-4018
Kongwa Dodoma Kongwa Dodoma Road 022-232-4012
Mpwapwa Dodoma Mpwapwa Post Offfice Area 022-232-4015
Northern Zone
Branch Name Region District Street/ Road Telephone
Arusha Business Center Arusha Arusha Makongoro Road 022-232-4942
Arusha Market Arusha Arusha Martin Road 022-232-4945
Clock Tower Arusha Arusha Sokoine road/Joel Maeda Street 022-232-4948
Kwa Mrombo market - mwisho
Kwa Mrombo Arusha Arusha 022 232 2997
wa Lami
Ngarenaro Arusha Arusha Sokoine Road 022-232-4990
Karatu Arusha Karatu Ngorongoro Road 022-232-4724
Namanga Arusha Longido Eworendeke 022-232-4784
Ngaramtoni town - along
Ngaramtoni Arusha Meru 022-232-4987
Namanga/Nairobi rd
Usa River Arusha Meru Arusha/Himo Road 022-232-4939
Monduli Arusha Monduli Boma Road 022-232-4718
Along ngorongoro road/mto wa
Mto wa Mbu Arusha Monduli 022-232-4790
mbu
Loliondo Arusha Ngorongoro Wasso 022-232-4721
Highland Zone
Branch Name Region District Street/ Road Telephone
Busokelo Mbeya Busokelo Busokelo district council 025 232 4414
Chunya Mbeya Chunya Mbeya -Tabora 022-232-4325
Makongorosi Mbeya Chunya Mkwajuni road 022-232-4050
Highway road to Malawi/Ngisi
Kasumulu Mbeya Kyela 022-232-4374
str.
Kyela Mbeya Kyela Mbondeni A 022-232-4344
Mbarali Mbeya Mbarali Ihanga 022-232-4322
Mwanjelwa Mbeya Mbeya CC Tunduma Road 022-232-4341
Mbeya City
Mbalizi Road Mbeya Mbalizi Road 022-232-4334
Council
Uyole Mbeya Mbeya DC Uyole Industrial / Uyole stand 022-232-4359
Tukuyu Mbeya Rungwe Bomani 022-232-4395
Lake Zone
Branch Name Region District Street/ Road Telephone
Rock City Mwanza Ilemela Ghana street/Airport road 022-232-4469
Ngudu Mwanza Kwimba Kakola 022-232-4532
Magu Mwanza Magu Bank Street 022-232-4523
Misungwi Mwanza Misungwi Shinyanga Road 022-232-4526
Mwanza
Buzuruga Mwanza Musoma rd 022-232-4440
Nyamagana
Buhongwa Mwanza Nyamagana Buhongwa 022-232-4573
Igoma Mwanza Nyamagana Musoma rd / Kwa Gachuma 022-232-4555
Kenyatta Road Mwanza Nyamagana Kenyatta Road 022-232-4513
Mwanza Business Center Mwanza Nyamagana Kenyatta Road 022-232-4455
Pamba Mwanza Nyamagana Pamba road 022-232-4466
Sengerema Mwanza Sengerema Bank Street 022-232-4540
Nansio Mwanza Ukerewe Boma Road 022-232-4529
Western Zone
Branch Name Region District Street/ Road Telephone
Igunga Tabora Igunga Bank 022-232-4618
Nkinga Tabora Igunga Nkinga bus stand 022-232-4666
Kaliua Tabora Kaliua Ushokora, Kigoma highway 022-232-4609
Nzega Tabora Nzega Bank st 022-232-4645
Sikonge Tabora Sikonge Police Line Mbeya -Tabora Rd 022-232-4654
Mihayo Tabora Tabora Jamhuri 022-232-4651
Urambo Tabora Urambo Boma Village 022-232-4657