National Bank of Malawi (NBM), which has reported a 2.9 percent profit growth in the year ended December 31 2011, has forecasted a considerable slowdown in gross domestic product (GDP) growth rate this year.
Finance Minister Dr Ken Lipenga last yearÂ put the GDP growth rate for 2011 atÂ six percent but the IMF said on Saturday the economy contracted by 4.5 percent.
The Malawi Stock Exchange (MSE)-listed bank on Monday attributed the economyâ€™s further contraction to the persistent shortages of foreign exchange, fuel and donor conditions.
â€œThis will have unfavourable effects on jobs, manufacturing output and trading generally. The expanding parallel foreign exchange market will continue to crowd-out legitimate foreign exchange business conducted at banks,â€ said the bank in a joint statement signed by NBM chairperson Dr. Matthews Chikaonda and chief executive officer George Partridge.
The statement accompanies the financial results in which the bank has posted a profit after tax of K3.5 billion from K3.4 billion the year before.
â€œThe persistence of the parallel market together with the rise in world oil prices will continue to exert pressure on inflation. However, a strong showing in growth is still expected in the telecommunications and construction sectors,â€ said the statement.
The bank has bemoaned the introduction of Value Added Tax (VAT) on bank charges which came into effect on February this year, saying it will â€œnegatively impact on the bankâ€™s financial inclusion expansion initiatives.â€
Already, said the bank, the measure has had a noticeable adverse effect on the benefiting communities.
But the bank said its performance in the year under review is in spite of it having absorbed a one-off fair value loss of K1.7 billion spent on the new office complex.
During the year, the bank registered a 13 percent growth both total earnings assets and customer deposits. The bankâ€™s asset base went up by 12 percent to K92 billion from K82 billion the year before.
The bankâ€™s board has recommended the payment of a final dividend of K1.26 billion, an equivalent of K2.70 per share.