The move left the Nairobi Securities Exchange-listed firm’s stake in NIC Bank Tanzania unchanged at 69.84 percent, indicating that minority shareholders in the subsidiary could have also provided their proportionate share of new capital.
NIC’s cumulative investment in the loss-making subsidiary in the review period stood at Sh2 billion, up from Sh1.6 billion in 2017.
The Bank of Tanzania last year published rules requiring lenders to write off any loan that has not performed in four consecutive quarters (one year) instead of the previous 12 consecutive quarters (three years).
NIC Group #ticker:NIC invested an additional Sh350 million in its Tanzanian banking subsidiary last year when the regulator in that market introduced new prudential rules that put a strain on institutions’ capital.
The move left the Nairobi Securities Exchange-listed firm’s stake in NIC Bank Tanzania unchanged at 69.84 percent, indicating that minority shareholders in the subsidiary could have also provided their proportionate share of new capital.
NIC’s cumulative investment in the loss-making subsidiary in the review period stood at Sh2 billion, up from Sh1.6 billion in 2017.
The Bank of Tanzania last year published rules requiring lenders to write off any loan that has not performed in four consecutive quarters (one year) instead of the previous 12 consecutive quarters (three years).
The rule ignored the value of securities held for bad debt written off under the more conservative international accounting standards, IFRS9, putting a strain on banks’ capital.
Besides the Tanzanian subsidiary, NIC also invested Sh100 million in its motor vehicle leasing arm NIC Leasing, bringing its total capital expenditure last year to Sh450 million.
NIC Bank Tanzania’s loan book stood at Sh3.4 billion million last year and the lender made impairment allowances of Sh311.3 million or nine per cent of the total.
The institution met all the capital requirements in the review period when its net losses widened to Sh113.6 million from Sh107.2 million in 2017.
The Tanzanian subsidiary will be merged with CBA Group’s banking unit in that market.
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Note: The results are not exact but very close to the actual.
