FMB profit up 70%, below forecast
FMB has reported a 70 percent jump in after-tax profit to K3.4 billion from the previous year’s K2 billion, but five percentage points below the 75 percent growth projected in the caution statement last year.
In the audited results for the year-ended December 2012, the Malawi Stock Exchange (MSE)—listed bank has reported a slight growth of 0.77 percent in net interest income at K4.3 billion from K4.27 billion.
There has been notable growth in non-interest income to K4.7 billion, a 95.83 percent jump from K2.4 billion, at the back of increased foreign exchange trading volumes.
The bank has acknowledged aggressive competition for customer deposits among banks in the year resulting in the balance sheet registering a slowdown of 12 percent in the growth of total assets (equity and liabilities) at K53 billion from K60 billion the year before.
“Despite intense competition for customer deposits, FMB achieved strong balance sheet growth and maintained its overall net interest margin without compromising its compliance with prudential liquidity and capacity adequacy requirements,” says a statement accompanying the results jointly signed by the bank’s managing director Dheeraj Dikshit, general manager (Finance) Lucas Kondowe and director John O’Neill.
Money market investments dropped 72 percent to K2.9 billion from K10.3 billion the year before, according to the results, with advances and loans to customers slumping 16.8 percent to K20.3 billion from K24.4 billion the year before with amount due to depositors going down by 22.6 percent to K36.4 billion from K47 billion the year before.
The bank’s earnings per share (EPS)—the portion of a company’s profit allocated to each outstanding share of common stock—went up by 82.5 percent to K1.46 from last year’s 80 tambala.
An analysis from FDH Stockbrokers says this is against the stock price of K8.50 per share, the bank’s price earnings ratio (P/E) which closed at a multiple of 5.82X, which is 41 percent down than that of 2011.
The bank has proposed a dividend of five tambala per share to bring the total dividend to 50 tambala per share.
With the current stock price at K8.50 per share, market analysts have calculated this translates into a dividend yield [financial ratio that shows how much a company pays out in dividends each year relative to its share price] of 5.88 percent.
The bank sees inflationary pressure persisting this year, but may ease as a result of the anticipated rebound production of maize, which as part of food now accounts for 50.2 percent in the Consumer Price Index (CPI)—a measure that examines the weighted average of prices of a basket of consumer goods and services.
