Standard Bank profits after tax for the first half of the year ended June 30 2012 leaped 54 percent to K4.3 billion from K1.6 billion during the same period last year, according to financial results published on Thursday.
The commercial bankâ€™s surge in profit during the period under review comes at a time when the economic growth slowed as a result of the twin shortages of foreign currency and fuel.
The statement jointly signed by the bankâ€™s chairman Alex Chitsulo, one of the directors Rex Harawa, managing director Charles Mudiwa and head of finance Temwani Simwaka said the results of the first half of 2012 reflect the resilience of the bankâ€™s brand and realisation of its strategic goals in spite of the challenging environment in 2012.
In the period, the bank increased its operating expenses to K3.3 billion (about $13.2 million), a 30 percent rise from K2.6 billion (about $10.4 million) the same period last year.
Going forward, the bank sees the cost of doing business continuing to climb despite the measures taken by the Reserve Bank of Malawi (RBM) to manage inflation.
“While the second quarter of the year has seen more promising developments in terms of various decisions made by the new government relating to the operating environment, the economy and the business overall remains in a somewhat uncertain stage. While the resumption of the International Monetary Fund (IMF) Extended Credit Facility (ECF) programme has improved donor confidence, the environment still remains uncertain.
“Liquidity will continue to be tight while the cost of doing business will soar as inflation continues to rise, notwithstanding the measures taken by RBM to manage inflation. As a group, we will position ourselves to exploit opportunities key to the growth and turnaround of the economy while ensuring prudent capital management, superior customer service and competitive pricing while containing costs,” reads the statement.
The bank, however, sees the groupâ€™s performance in the second half getting slower than the first half.
This due to the impact of the devalued kwacha which is likely to result into higher operating costs and tight liquidity which is likely to slow down lending.