FDH Bank plc has posted a K14.4 billion after-tax profit for the year ended December 31 2020, its financial statement shows.
This represents a 177 percent jump from the K5.3 billion posted in 2019.
The bank, which is a subsidiary of FDH Financial Holdings Limited and listed on the Malawi Stock Exchange (MSE) in August 2020, has also grown its net interest income by 77 percent due to an increase in the loan book and other interest bearing assets.
The summary of the audited financial statement co-signed by chairperson Charity Mseka, managing director Ellias Ngalande, chairperson of finance and audit committee Ulemu Katunga and head of finance Richard Chipezaani shows that the bank’s interest expense increased by 15.8 percent.
But the statement says non-interest income was affected by the Covid-19 pandemic.
Reads the statement in part: “Digital financial services fees were reduced by 40 percent to encourage people to transact more on digital platforms to reduce the spread of Covid-19.
“Total net income could have dropped 34 percent before restatement, but the results of the restatement is that non-interest income grew by 29 percent as a significant portion of this revenue was recognised in 2020 after being restated from 2018 and 2019.”
In the year under review, the FDH Bank plc’s total assets climbed by 30 percent on account of an increase in loans and advances by 40 percent and government securities by 56 percent.
During the same period, customer deposits increased by 16 percent from K137.14 billion to K158.94 billion, but the growth in deposits was subdued by the Covid-19 pandemic.
“The growth in the loan book and the Covid-19 impact resulted in non-performing loans ratio increasing from 0.80 percent in 2019 to 1.03 percent by the close of 2020 against an industry average of 6.2 percent,” reads the statement.
Given the subdued economic outlook in view of the Covid-19 pandmeic, FDH Bank plc says it will continue being competitive and exploit existing and emerging markets and deliver value to its customers and shareholders.
“We will focus on growing revenue and market share, reducing operating cost for sustainable performance and profitability.”
Following the listing on MSE, FDH Financial Holdings Limited holds 74.05 percent stake in FDH Bank plc while the public has 20 percent, Government of Malawi holds 4.75 percent stake and the remaining 1.20percent is held by MSB Esop Limited.
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