NBM H1 profit up 36%, beats forecast
National Bank of Malawi (NBM) has beaten its profit forecast by 16 percentage points to K3.4 billion (about $13.6m at current exchange rates) in the half-year ended June 30 2012.
The bank’s net profit jumped by 36 percent from last year’s K2.5 billion, according to financial results published on Thursday.
This is despite the Malawi Stock Exchange (MSE)-listed financial institution operating in a tough economic environment characterised by the twin shortages of foreign exchange and fuel that crippled operations of most businesses.
In a cautionary statement to its shareholders in June, the bank indicated that its profit will be 20 percent above the same period last year.
But the bank has bemoaned the subdued economic environment which resulted in the underutilisation of some of the bank’s products affecting deposits and loans and advances which grew moderately by 12 percent and 14 percent respectively.
“For a good part of the period under review, the operating economic environment was poor, characterised by low business confidence levels, acute fuel and foreign currency shortages.
“This slowed down business activity, necessitating the scaling down and closure of some client operations,” said a statement accompanying the results jointly signed by chairperson Dr Matthews Chikaonda and chief executive officer George Partridge.
In the period, the bank, whose assets have expanded to K106 billion (about $424m) from K88.3 billion (about $353m), increased its operating expenses to K4.8 billion (about $19.2m), a 77 percent jump from K2.7 billion (about $10.8m) the same period last year.
Going forward, the bank said a number of key political and economic decisions affecting commerce have been taken since the Joyce Banda administration took office in April.
The bank has praised liberalised exchange rate regime which has been supported by an increase in the bank rate to 21 percent, the restoration of relations with the International Monetary Fund (IMF), the World Bank and other bilateral donors which have brought business confidence and will help to restore macroeconomic imbalances.
“The easing of the foreign exchange and fuel challenges should somehow halt the deterioration of business activity during the second half,” said the bank, adding that prospects are that performance of the bank in the year will surpass that of the year before.
The bank’s board has since resolved to pay an interim dividend of K1.135 billion (about $4.5m) up from K840 million (about $3.3m) the same period last year, which is K2.43 per share.
