By Edson Baraukwa | Africa Guardian
The Bank of Tanzania (BoT) has granted CRDB Bank Plc a No Objection Certificate (NOC) to expand its operations outside Africa, marking a historic first for the Central Bank. This milestone acknowledges CRDB’s financial stability and strong performance, setting a new precedent in the region’s banking sector.
A Pioneering Move
BoT Governor Dr. Emmanuel Tutuba confirmed on Wednesday that CRDB Bank has been given approval to invest internationally, a significant achievement in the Central Bank’s history. The decision was based on CRDB’s robust financial standing, as reflected in their 2023 financial reports.
According to Dr. Tutuba, “The Bank of Tanzania’s decision to permit international investment was driven by CRDB’s capital strength and financial performance.”
In 2023, CRDB, listed on the Dar es Salaam Stock Exchange (DSE), reported total assets of 13 trillion TZS (approximately $5.05 billion USD), deposits of 8.9 trillion TZS, loans amounting to 8.5 trillion TZS, and a profit after tax of 424 billion TZS.
Strategic Expansion and Market Diversification
CRDB’s plan to seek new markets is aimed at attracting deposits and capital from new stakeholders while facilitating financial transactions between Tanzania and its trading partners. This move will see CRDB become the first East African bank to establish a subsidiary outside the continent, marking a significant historical milestone for Tanzania.
CRDB Group CEO and Managing Director Abdulmajid Nsekela expressed gratitude for the central bank’s trust, stating, “We appreciate the regulator’s confidence in our performance and look forward to announcing the location of our new subsidiary once the process is complete.”
Domestic Efficiency and Global Ambitions
While the expansion is a notable achievement, President Samia Suluhu Hassan emphasized the importance of prioritizing domestic efficiency. “International investment will be more effective if we first ensure productivity and strong connections within our own institutions,” President Suluhu Hassan noted.
Dr. Hilderbrand Shayo, an economist and investment banker, highlighted that the NOC underscores Tanzania’s growing banking sector stability and capital strength. He noted, “This development indicates that CRDB is well-positioned to diversify its investments beyond Tanzania, facilitating easier trade and transactions for businesses using CRDB.”
Positive Reactions and Future Plans
Lilian Nguma, a small business owner in Dar es Salaam, welcomed the news, saying, “This is excellent news for Tanzania. Seeing banks from other African countries establish branches abroad shows the positive impact of this initiative.”
At a recent forum, Nehemiah Mchechu, Managing Director and CEO of CRDB Bank, outlined his strategy for international expansion. He emphasized the need for institutions to enhance domestic performance through operational reforms to compete effectively on a global scale.
CRDB will join a select group of banks from countries like Nigeria, Ghana, and South Africa (e.g., ABSA) with subsidiaries outside Africa, including locations in Dubai, London, and New York. In August 2016, Moody’s awarded CRDB a B2 rating for solid growth, making it the first Tanzanian bank to receive such a rating.
With its strong financial performance and strategic vision, CRDB Plc continues to be a leading bank in East Africa, poised to make significant strides on the global stage.
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