Standard Bank registers K12bn profit
Standard Bank Malawi, which has posted a 52 percent growth in profit in 2013, says economic prospects this year are more of a “mixed bag” mainly due to the forthcoming elections and the withholding of aid.
Malawi goes to the polls on May 20 to choose a president, parliamentarians and councillors at a time donors under the Common Approach to Budgetary Support (Cabs) are withholding $150 million in budget Support due to revelation of looting of public funds at Capital Hill dubbed Cashgate.
“Pre-election fiscal lapses could trigger more inflationary pressures in the first half of 2014, but consolidation is expected in the post election period,” says a statement accompanying the year- end financial results.
The Malawi Stock Exchange (MSE)-listed bank’s profit leapt to K12 billion from K7.9 billion the year before, and because of the “strong” performance, earnings per share (EPS)—a portion of a company’s profit allocated to each outstanding share of common stock—jumped to K56.66 from K37.39 the year before.
The bank’s interest income has nearly doubled to K21.3 billion from K11.8 billion the year before, while loans and advances have slightly jumped to K53.2 billion from k50.9 billion an indication that customers were constrained to borrow by high interest rate which peaked at over 40 percent in the year.
Standard Bank has admitted that the economy in 2013 was burdened by high interest rates as the Reserve Bank of Malawi (RBM) policy stance remained tight for most of the year which pushed up Treasury Bills (T-bills) yield to the highest levels since the change of government in April 2012.
The bank’s assets have also increased by 41 percent to K166.7 billion from K118.1 billion largely due to a 54 percent growth in customer deposits to K130 billion from K84 billion the year before.
Interestingly, its dividend per share—the sum of declared dividends for every ordinary share issued—has dropped in the year to K9.37 from K23.37 in a period the bank’s profit went up.
Standard Bank, with 213 million shares on issue, is one of the blue chips on MSE and its share price closed at K397.41 on the market.
