NBS Bank’s transformation drive has started bearing fruits as evidenced by the Malawi Stock Exchange (MSE) listed bank’s return to profitability.
The bank has reported a K1.7 billion profit after-tax for the year ended December 31 2018.
The profit is a huge leap—a growth of over 250 percent—from a loss of K1.092 billion reported during the same period last year, according to audited financial results for the year ended December 31 2018 published yesterday.
There has been a lot of speculation in the market that NBS Bank would not survive due to a string of heavy losses it has been registering, which were unsustainable.
However, under new chief executive officer Kwanele Ngwenya, NBS Bank has managed to emerge stronger and healthier.
In the year under review, net interest income grew by 35 percent.
On the other hand, non-interest income increased by 52 percent year-on-year, according to the financial statement, supported by record growths from its foreign exchange-related business and transactional income.
“Recoveries of non-performing debt was flat. Operating expenditure was up but only by 14 percent compared to the prior year largely due to investments to support the bank’s transformation and investments in systems,” reads the statement accompanying the financial results.
The financials show that total customer deposits grew by 29 percent from K77 billion in 2017 to K100 billion in 2018.
The bank has attributed this growth to the support received from its customers but also the return of confidence in the bank, following various improvements it has made in its operations such as investments in new online and digital platforms, introduction of new innovative products and services and the launch of a customer call centre.
NBS Bank, with a market capitalisation of K28.8 billion on MSE, says one of its strategic goals and objectives is to become a digitally-driven transactional bank for both retail and corporate customers through a deeper understanding of their needs.
Reads the statement: “This distinction will be embodied in the bank’s entrepreneurial culture, balanced by a strong risk management discipline, client-centric approach and ability to be nimble, flexible and innovative.
“Our products will be designed to be easy to understand, easy to use, easy to access and easy on the pocket. In 2019, the bank will consolidate the gains made over the past two years to provide a platform for further growth.”
Looking into the future, the bank expects stable exchange rates and inflation, currently at 7.9 percent, to trend downwards.
The bank expects interest rates to also follow a similar trend in the next six months and that the reduction of interest rates will result in increased credit to the private sector inthe second half of 2019. n