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Nico Holdings set to grow profit in 2016—MD

 

Nico Holdings Limited, the Malawi Stock Exchange (MSE)-listed financial services group, says it has put in place strategies to ensure that it grows its profit this year.

Nico Holdings’ after-tax profit dropped by about 25 percent to K5.5 billion in the year ended December 2015 from K7.3 billion the year before.

Kumwenda: Strategies in place
Kumwenda: Strategies in place

The main contributor to the group’s reduced profit was the poor performance of one of its subsidiaries, NBS Bank, which posted a loss of K195.4 million in the year ended December 2015 due to bad loans.

“We are in the process of cleaning up loan books of NBS Bank. As you know, the bank is the largest contributor of the profit and its performance filtered through to the rest of the group,” said Nico Holdings managing director Vizenge Kumwenda on the sidelines of the group’s 46th Annual General Meeting (AGM) in Blantyre on Wednesday.

On March 18 2016, the board of directors of Nico Holdings Limited passed a resolution to support the MSE-listed bank’s recapitalisation plans through a rights issue—issuing of shares offered at a special price to existing shareholders—to reach compliance with minimum tier one ratio of 10 percent by December 31 2016 under Basel II.

Kumwenda said Nico Holdings will engage a consultant to advise on how best to recapitalise NBS Bank, adding that once that is done, shareholders will be called to to approve or otherwise. n

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