One of Africa’s Leading commercial bankers, the Malawi Stock Exchange listed National Bank of Malawi (NBM) plc’s profit-after-tax for the first six months of this year has grown by 19 percent to reach K42.1 billion from K35 billion during the same period in 2023.
According to the half-year financial statement which the Bank has released, signed by its Board Chairperson Jimmy Lipunga, Director Macleod Nkhoma, Chief Executive Officer (CEO) Harold Jiya, and Chief Operating Officer (CFO) Masauko Katsala, the impressive performance is attributed to the growth in customer deposits which resulted in increase in the loan book and investments in fixed income securities.
“Customer deposits increased by 30% (2023: 28%) which largely pushed the Bank’s loan book to grow by 42% (2023: 9%).
“Investment in fixed income securities grew by 19% (2023:13%). As a result, net interest and investment income grew by 47%,” reads the statement.
The Bank also indicated that the revision of the policy rate from 24% to 26% in February 2024 which further influenced the reference rate also contributed to growth in interest income.
“In addition, there was a 36% increase in other Income mainly arising from growth in foreign exchange commission from K10.0b to K18.8b. The increase in other income is also explained by inclusion of income from United General Insurance Company Limited (UGI) that was consolidated for the first time during the reporting period. Overall net income grew by 42%.”
“Operating expenses increased by 55% mainly due to consolidation of expenses from UGI. The increase in operating expenses was also due to the rise in net impairment losses and loan book write offs which increased from K1.8b to K8.4b.
“A one-off staff rationalization exercise for Akiba Commercial Bank (ACB) in Tanzania that took place during the period also contributed to the rise in operating expenses,” reads further the statement.
Through the statement, the Bank has also given an update on its equity investments and performance of its subsidiaries, UGI and Akiba.
“The Bank increased its equity in UGI from 47% to 55% during the first half of the year following a successful agreement with other shareholders and its technical partners.”
“All the subsidiaries of the Bank posted profits that contributed positively to the Group performance except for Akiba in Tanzania which posted a loss of K2.6b compared to a profit of K0.13b in the same period last year. The performance of Akiba has been adversely affected by a staff rationalization exercise that took place during the first half of the year. An improved performance is expected in the second half of the year,” reads the statement.
“The Board envisages a continuing challenging operating environment due to the factors enumerated above. This notwithstanding, the Bank is expected to sustain the enviable performance through its ability to leverage on its core strengths, while addressing challenges and exploiting opportunities in the market,” concludes the statement.
Meanwhile, the Bank has declared an interim dividend of K13b (2023: K11b) for the half year ended 30 June 2024 representing K27.84 per share (2023: K23.56 per share) to be paid in September 2024.
During its Annual General meeting (AGM) recently, members of the Minority Shareholders Association hailed NBM plc for its consistency in growing the Brand which has seen them getting good dividends.
At the AGM, the Bank announced a profit-after-tax of K72 billion for the year ending December 31 2023.
“An improved performance is expected in the second half of the year.”
NBM Board of Directors
Half-year financial statement
