Equity Analysis /
Tanzania

NMB Tanzania: NMB GROUP: A weak Q1, but still our preferred pick in an uninspiring sector

    Faith Mwangi
    Faith Mwangi

    Equity Research Analyst, Financials (East Africa)

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    Tellimer Research
    3 May 2018
    Published byTellimer Research
    NMB’s Q1 18 performance was disappointing, with EPS down 23% yoy to TZS63.37. The weakness reflected: 1) higher than expected operating costs (+16% yoy); and 2) a 116% yoy jump in loan loss provision. These results do nothing to dissuade us from our negative view of the Tanzania banking sector overall, which suffers from a high NPL environment, erratic government reforms which negatively impact the sector and continued delay in government payments. We retain our HOLD rating on NMB, with our unchanged target price of TZS2,440 suggesting an ETR of 7%.