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Directorate of Banking Supervision Annual Report 2015 19Th Edition

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Directorate of Banking Supervision Annual Report 2015 19Th Edition ISSN 0856 – 8537 DIRECTORATE OF BANKING SUPERVISION ANNUAL REPORT 2015 19TH EDITION For any enquiries contact: Directorate of Banking Supervision Bank of Tanzania 2 Mirambo Street 11884 Dar es Salaam TANZANIA Tel: +255 22 223 5482/3 Fax: +255 22 223 4194 Website: www.bot.go.tz TABLE OF CONTENTS ....................................................................................................... Page LIST OF TABLES ...................................................................................................................... iv LIST OF CHARTS ..................................................................................................................... v ABBREVIATIONS AND ACRONYMS ....................................................................................... v MESSAGE FROM THE GOVERNOR ....................................................................................... vii FOREWORD BY THE DIRECTOR OF BANKING SUPERVISION .......................................... viii CHAPTER ONE ......................................................................................................................... 1 OVERVIEW OF THE BANKING SECTOR ................................................................................ 1 1.1 Banking Institutions ................................................................................................................. 1 1.2 Branch Network ....................................................................................................................... 1 1.3 Market Share ........................................................................................................................... 2 1.4 Electronic Payment Services .................................................................................................. 2 1.5 Employment in the Banking Sector ......................................................................................... 4 1.6 Bureaux de Change ................................................................................................................ 4 1.7 Credit Reference Bureaux ....................................................................................................... 5 1.8 Mortgage Financing Business ................................................................................................. 5 1.9 Financial Leasing Business ..................................................................................................... 5 1.10 Representative office ............................................................................................................... 5 CHAPTER TWO ........................................................................................................................ 6 PERFORMANCE OF THE BANKING SECTOR ........................................................................ 6 2.1 Overview of the Economy ....................................................................................................... 6 2.2 Balance Sheet Structure of the Banking Sector ..................................................................... 7 2.2.1 Asset Composition .............................................................................................................. 7 2.2.2 Liability Structure .............................................................................................................. 10 2.2.2 Capital Structure and Growth ............................................................................ 11 2.2.3 Composition of Off Balance Sheet Items .......................................................... 13 2.2.4 Growth of the Banking Sector’s Assets, Liabilities and Capital .......................... 16 2.3 Financial Soundness Indicators ............................................................................................ 18 2.3.1 Capital Adequacy ............................................................................................ 18 2.3.2 Asset Quality ................................................................................................... 18 Directorate of Banking Supervision Annual Report, 2015 ii 2.3.3 Earnings .......................................................................................................... 18 2.3.4 Liquidity ........................................................................................................... 20 2.3.5 Sensitivity to Market Risk ................................................................................. 21 2.4 Risk Assessment ............................................................................................. 23 2.5 Stress Testing ................................................................................................. 23 2.6 Performance of Bureau De Change ................................................................. 24 2.7 Performance of Microfinance Banks ................................................................. 24 2.8 Performance of the Pension Sector .................................................................. 25 CHAPTER THREE .................................................................................................................. 27 MAJOR ACTIVITIES OF THE DIRECTORATE OF BANKING SUPERVISION ....................... 27 3.1 Overview ................................................................................................................................ 27 3.2 Licensing................................................................................................................................ 27 3.3 Off-site Surveillance .............................................................................................................. 27 3.4 On-site Examination .............................................................................................................. 28 3.5 Development of Regulatory and Supervisory Frameworks .................................................. 28 3.5.1 Consolidated Supervision ................................................................................................. 28 3.5.2 Mergers and acquisitions .................................................................................................. 29 3.5.3 Financial Leasing .............................................................................................................. 29 3.5.4 Tanzania Mortgage Refinance Company (TMRC) ........................................................... 29 3.5.5 Pension ............................................................................................................................. 29 3.5.6 Mortgage Finance ............................................................................................................. 29 3.5.7 Development Financial Institutions ................................................................................... 30 3.5.8 Automation of Bureau De-change Operations ................................................................. 30 3.6 Capacity Building and Sensitization Programs ..................................................................... 30 3.7 New and Revised Regulations .............................................................................................. 30 CHAPTER FOUR .................................................................................................................... 31 INTERNATIONAL AND REGIONAL COOPERATION ................................................................ 31 4.1 Overview ................................................................................................................................ 31 4.2 Monetary Affairs Committee of East African Community ..................................................... 31 CHAPTER 5 ............................................................................................................................ 32 Directorate of Banking Supervision Annual Report, 2015 iii CREDIT REFERENCE OPERATIONS .................................................................................... 32 5.1 Introduction ............................................................................................................................ 32 5.2 Participants in the Credit Reference System ........................................................................ 32 5.3 Institutions Sharing Credit Information .................................................................................. 33 5.4 Data Submission Statistics .................................................................................................... 34 5.5 Credit Reference Bureaux ..................................................................................................... 36 5.6 Consumers/Borrowers........................................................................................................... 36 5.6.1 Data Quality ...................................................................................................................... 36 5.7 Credit Bureaux Products and Services ................................................................................. 37 5.8 Usage of Credit Reference Bureaux Services ...................................................................... 37 5.9 Customer Complaints and Resolutions ................................................................................ 40 5.10 SUPERVISORY ACTIVITIES................................................................................................ 42 5.11 COLLABORATION WITH OTHER STAKEHOLDERS AND CAPACITY BUILDING .......... 42
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