One of Africa’s leading commercial bankers, National Bank of Malawi (NBM), popularly known as the Bank of the nation, has hit a staggering K1 billion mark.
The ambitious home-grown financial institution, NBM, has announced an increase of its profit-after-tax to K101.71 billion, marking a 41% increase for the year ending 2024, from the K71.96 billion reported in 2023.
In the just-released financial statement signed by Chief Executive Officer (CEO) Harold Jiya, Board Chairperson Jimmy Lipunga, Director Mcleod Nkhoma, and Chief Financial Officer (CFO) Daniel Jere, NBM plc’s results were largely driven by growth in customer deposits, which fueled an increase in the loan book and fixed-income securities.
Reads the statement: “Net revenue rose by 46% due to growth in fees and commissions, as well as the consolidation of revenue from insurance operations of United General Insurance Company Limited (UGI), which became a subsidiary in 2024 following the Group’s increase in its stake from 47% to 57%.
According to the statement, UGI transitioned from being an associate to a subsidiary company.
“Operating expenses increased by 52% largely due to high inflation in Malawi, consolidation of UGI’s operating expenses, and one-time staff rationalization costs at the Group’s subsidiary in Tanzania, Akiba Commercial Bank plc,” reads the statement in part.
The Bank indicates that growth in 2024 was adversely impacted by other factors like foreign currency scarcity and high interest rates.“
The statement highlighted that the Group’s performance was negatively affected by a 75% increase in net impairment losses in Malawi and Tanzania.
Therefore, this means that all subsidiaries of the Bank reported profits that positively contributed to the Group’s performance, except for Akiba in Tanzania.
The Bank of the nation says the Tanzanian operations incurred a loss of K3.94 billion, largely due to weak revenue performance, staff rationalization costs, and an increase in expected credit loss provisions.
According to the Bank, headline inflation decreased from 33.4% in the first quarter to 29.2% in the fourth quarter.
Interest rates were relatively stable, although still high, with the Reserve Bank of Malawi (RBM) maintaining a policy rate of 26% per annum from February 2024 to December 31, 2024.
The bank said the Malawi Kwacha, which has been devalued by 3% against the US Dollar in March 2024, has caused the official exchange rate per US Dollar to rise from K1,700 to K1,751.
Despite the challenges, NBM plc projects the economy to grow by 3.2% in 2025, up from an estimated 1.8% in 2024, primarily due to continued normal to above-normal rainfall across the country.
Meanwhile, the Bank has announced a total dividend of K59.0 billion in respect of 2024 profits representing K126.35 per ordinary share.In 2023, the Bank paid K102.80 per share to its shareholders.
“Operating expenses increased by 52% largely due to high inflation in Malawi.”
NBM Board statement.
