NBS Bank chairperson Felix Mlusu says the financial institution remains positive that it will break even in the second half of 2012 despite the first five months being tough.
“In the first five months up to May 2012, business has not been as good as we had expected. There have been lots of challenges which started much earlier. The past two or three years, the economy has not been doing very well,” said Mlusu, in an interview on Friday on the sidelines of the bankâ€™s eighth annual general meeting (AGM) in Blantyre.
Malawiâ€™s lucklustre economic performance has been largely on account of poor tobacco marketing season last year and the withdrawal of budget aid which resulted into acute shortage of foreign exchange.
NBS Bank is a subsidiary of financial services group Nico Holdings Limited where Mlusu in the managing director.
Mlusu said figures show that the Malawi Stock Exchange (MSE)-listed bankâ€™s performance in the year to May is below budget and â€˜marginallyâ€™ below last year.
He said the recent 49 percent devaluation of the kwacha has had a negative impact on the bank because of the foreign exposure they have.
But Mlusu said with the initiatives government has put in place and also the steps the Reserve Bank of Malawi (RBM) has instituted to allow tobacco dollars to go through commercial banks, the position going forward looks positive.
“We have revised our strategies to be in line with the current market dynamics,” he said.
Mlusu said the bank will profit from the RBM directive because they support tobacco farmers. He added that since tobacco dollars now go into farmersâ€™ accounts, it will give them a “reasonable flow of foreign exchange”.
In 2011, the bankâ€™s profit went up 20 percent to K1.7 billion (about $6.8m) from K1.4 billion (about $5.6m) the year before.
During the AGM, shareholders approved the declaration of total dividend of K582 million (about $2.3m), an equivalent of 90 tambala per share.
The shareholders also reappointed KPMG, Certified Public Accountants, as their auditors for the year and increased fees and sitting allowances for chairperson and directors.
The fees for the chairperson have gone up to K1.13 million (about $4 520) from K1 million (about $4 000) per annum and that of directors have increased from K847 000 (about $3 388) to K931 700 (about $3 726) per annum.
Sitting allowances for the chairperson and directors have also gone up to K50 000 (about $200) from K36 000 (about $144) and K40 000 (about $160) from K33 000 (about $132), respectively.
Last year, the International Finance Corporation (IFC), the private sector arm of the World Bank Group, acquired stake in the bank.
Following the acquisition by IFC, the shareholding structure of the bank is as follows: Nico 50.1 percent, Public 26.2 percent, IFC 18.1 percent, National Investment Trust Limited (Nitl) 5.2 percent and Esop (employees) 0.4 percent.