DTB firms grip on Tanzania unit with Sh1.1bn injection

Diamond Trust Bank chief executive Nasim Devji (right) with CFO Alkarim Jiwa. PHOTO | FILE
Diamond Trust Bank chief executive Nasim Devji (right) with CFO Alkarim Jiwa. PHOTO | FILE 

Diamond Trust Bank injected Sh1.1 billion in its Tanzanian unit increasing its shareholding in the regional operation last year.

DTB shareholding in the Tanzanian operation rose to 65 per cent from 62 per cent after it took up additional rights in a Sh1.4 billion cash call made last year.

“Tanzania undertook a rights issue last year which we participated in and increased our shareholding to 65 per cent,” said DTB chief financial officer Alkarim Jiwa.

The Tanzanian outfit needed the cash to expand its branch network from the current 24. DTB operates in Kenya, Tanzania, Uganda and Burundi.

Last week, the lender announced a 15.6 per cent increase in profit after tax to Sh6.5 billion.

The bank’s subsidiaries contributed Sh1.8 billion to earnings, being 27.3 per cent of the group profit, up from Sh1.5 billion last year. DTB had made plans to expand to other African markets in the next three years.

The lender has identified Rwanda as its first destination before tapping into South Sudan, Democratic Republic of Congo, Mozambique and Madagascar.

“Entry into a new market may not happen this year but it is still in our medium term plans,” said Mr Jiwa.

Equity Bank has shelved its regional expansion plans opting to consolidate its presence in current markets. Equity which operates in Kenya, Uganda, Tanzania, Rwanda and South Sudan had identified Ethiopia and Burundi as its next destinations.

Kenyan banks have turned to the less competitive neighbouring markets to grow their bottom lines as the local market matures. Equity Bank management disclosed it was making margins of 18 per cent in DRC where loans are issued in the more stable American currency.

South Sudan, which had proven to be a good hunting ground for Kenyan banks, turned sour last year following devaluation of the local currency by 84 per cent.