Banks post good results
Commercial bank, have grown their profits for the year ended December 2019 despite a general decline in interest rates and slowdown in business activities due to political uncertainty.
Published financial statements from some of the banks, namely NBS Bank plc, Standard Bank plc and FDH Bank, show that they posted higher profits than the previous year.
In an interview on Wednsday, Reserve Bank of Malawi (RBM) spokesperson Mbane Ngwira said the performance of the banks, achieved in an environment of inflation, a stable kwacha, a relatively lower policy rate at 13.5 percent and declining Treasury bills rates, is difficult to link to a single factor.
He said: “Banking has evolved quite a lot to encompass a lot of services and not the traditional lending.
“This being the case, banks find a mix that makes the whole business profitable.”
In the review year, Standard Bank plc profit after-tax went up by 50 percent to K15.9 billion from K10.5 billion in 2018 on account of a 12 percent increase in net income, emanating from growth of the customer loan book.
Similarly, FDH Bank’s profit after-tax grew by 32 percent to K7.8 billion from the previous year’s K5.9 billion, which according to the bank, was on account of growth in customer deposits by 20 percent from K111 billion to K133.1 billion.
Profitability of NBS Bank plc grew by 163 percent after tax from K1.69 billion in 2018 to K4.46 billion in 2019 on account of the bank’s turnaround strategy.
However, FMB Capital Holdings plc, the parent company of First Capital Bank, is projecting profit for the year ending December 31 2019 to be 70 percent lower than was achieved during the year before on account of the macroeconomic environment in Zimbabwe and the impact of hyperinflation and devaluation of the local currency.
“Except for Zimbabwe, the performance of the other businesses in the group is in line with expectations,” said a statement signed by FMBCH managing director Deraaj Dikshit.
In 2018, the group recorded a marginal profit tax increase of K10.77 billion from K10.06 billion in 2017.
But in a commentary on the performance of banks issued last week, RBM Governor Dalitso Kabambe indicated that the banking system continues to be well capitalised, liquid and remain profitable, faring relatively well even within the region on account of enhanced credit underwriting and monitoring standards underpinned by generally low interest rates.
