NBS Bank 6 months profit increase by 703%

Malawi’s third largest bank, NBS Bank has said it registered a net profit jump of K514 million during the six months review period ended June 30, 2013, up from K63.7 million which it registered during same time last year.

This represents a 703% profit jump by the bank whose total assets amount to K62.8 billion.

In its summary of unaudited interim consolidated results for the period, signed by chairman Felix Mlusu and director Estelle Nuka, NBS Bank said despite the magnitude of the profit results the economy remained depressed with interest yield on government securities soaring up to 44%.

“Liquidity in the banking system remained a challenge as the monetary authorities continued to control the growth of money supply. The situation eased with the tobacco sales proceeds which enhanced the available deposits in the banking system.

Mlusu: NBS Band making huge profits

Mlusu: NBS Band making huge profits

“Inflation slowed down from 34.6% in December, 2012 to 27.9% at the end of June 2013 on account of improved food system and appreciation of Malawi Kwacha due to the availability of foreign exchange in the tobacco marketing season,” NBS Bank said.

In its performance for the period under review, the bank’s board of directors said it was pleased that its operations improved significantly compared with last year.

“Total income at K10.5 billion was 123% above last year same period total income of K4.7 billion whilst profit before impairment losses was at K2.2 billion was 175% above the same period results of K0.8 billion. Loan impairment charges were at K1.3 billion compared to K0.4 billion last year same period. The impairment losses are mainly
attributable to suspended interest on fully secured loans,” said the bank.

The bank said with tight liquidity during the period it resorted to taking expensive deposits which resulted into higher interest costs.

In its outlook for the rest of the year, NBS Bank said it expects performance to improve.

“Liquidity is expected to improve following reduction of borrowing by the monetary authorities from the public in the second half of the year. Interest margins could be squeezed as interest rates are expected to go down following improvement in money supply. The bank is poised to take advantage of improving macro-economic parameters.
Forecast results for the year are expected to be better than last year,” NBS Bank said.

Although the results look rosy, the board of director however said it has not considered payment of interim dividends in order to augment the bank’s capital.

NBS Bank is a subsidiary of Nico Holdings and it is also listed at the Malawi Stock Exchange. The record profit registered for the past six months has led to increasing demand of its shares at the local bourse and last week the bank’s shares gained by 60 tambala each to be trading at K11.10 and stock brokers on the market acknowledged this week that demand for the shares is on the rise.

Follow and Subscribe Nyasa TV :

Please share this Article if you like Email This Post Email This Post

More From Nyasatimes

More From the World

Comments are closed.