United Bank Limited (UBL) is planning to inject US $9.2 million in its subsidiary of Tanzania this year in order to meet the regulatory capital requirement.
According to the financial reports, UBL Bank (Tanzania) Limited (UBTL), a wholly owned subsidiary of UBL, has requested the management of UBL to inject additional capital in its subsidiary.
UBL’s management has approved capital injection of US $9.4 million or Rs. 1.037 billion. The bank has started the regulatory approval process for transfer of funds for capital injection, the financial reports said.
The bank has already invested an amount of Rs. 619.413Â Â million in the subsidiary in Tanzania.
UBL Bank in Tanzania (UBTL) has been operating in losses for the last two years along with the adverse exchange movement in Tanzanian Shilling against Pak Rupee, which has resulted in a significant decline in net asset value of the subsidiary.
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During this year, UBTL incurred a loss mainly as a result of significant provisioning against non-performing loans and lower fee revenues. Foreign exchange earnings remained subdued, declining by 6% year on year, a result of a stable local currency and slowdown in FX volumes. The business model for the location remains challenging and we are in the process of developing a more sustainable scale of business.
UBL Bank (Tanzania) Limited (UBTL) was established in 2012 and is a wholly owned subsidiary of UBL.  It is operating two branches in the city of Dar-es-Salam, which is the former capital as well as the largest and populous city in Tanzania. It is engaged in providing commercial and retail banking services.
In 2017, UBL profits decreased by Rs. 2.3 billion standing at Rs. 25.4 billion mainly because of declining income from interest-based avenues.
