Standard bank leads, market share at 27.5%

Standard Bank Malawi has been rated the country’s number one bank out of 12 in terms of deposits, commanding a market share of 27.5 percent in the fourth quarter (Q4) of 2013 from 25.6 percent the preceding quarter.

The 2013 Q4 market share report compiled by the Reserve Bank of Malawi (RBM) seen by Business News shows that the Malawi Stock Exchange (MSE)—listed bank surpassed another listed bank, National Bank of Malawi (NBM), whose market share stood at 25.3 percent from 28.1 percent the quarter before.

Standard Bank’s total deposits in the quarter, according to the report, jumped to K129.7 billion from K105 billion the quarter before whereas NBM’s total deposits were recorded at K119.3 billion from K115.5 billion.

Trailing NBM is another listed bank, NBS Bank, whose market share has jumped to 12.6 percent in the quarter under review from 11.8 percent with total deposits slightly going to K47 billion from K47.2 billion.

Yet another listed bank, FMB, is on fourth position and has seen its market share shrinking to 8.5 percent in Q4 from 10 percent with total deposits also dropping to K40.3 billion from K41.2 billion.

FDH Bank, which is five years old on the market, is on position five with its market share slightly dropping to 6.7 percent from 6.8 percent but total deposits rising to K31.5 billion in Q4 from K27.8 billion.

The report indicates that total deposits for all the country’s 12 banks and one leasing and finance company grew by K139.2 billion on a year-on-year basis and K60.4 billion on a quarter-to-quarter basis.

“Loans and advances for all banks have grown by K47. 4 billion on a year-to-year basis and declined by K42.8 billion on a quarter-to-quarter basis. Total deposits for all banks are now at K472 billion as compared to K411.5 billion as of last quarter,” according to the report.

The report shows that total loans and advances for all banks were recorded at K274.7 billion compared to K231.9 billion in the quarter before.

Analysts have said some of the small banks are fast growing, and are eating away the market share of the country’s big banks.

The country’s banks are not immune to risk, with RBM financial stability report for 2013 indicating that generally the biggest risk for the banking sector arises from credit risk—the risk in general and risk related to concentrations on large borrowers.

The RBM report indicates that some banks are more exposed to liquidity risk than other, observing that three banking institutions would have a deposit run for only one day during a major shock and four would have survived deposit run.

It says three banking institutions would have failed a minor shock as their liquidity ratios were 19.5 percent, 23.5 percent and 26.7 percent, which is below the minimum regulatory requirement of 30 percent.