Despite economic turmoil, National Bank posts K120 bn profit
One of the leading Banks in the country National Bank of Malawi (NBM) plc has announced that they have made a profit before tax of K120.13 billion after paying a total of K48.17 billion in taxes.
Through a statement released dated February 28th, 2024 signed by the Bank’s Board Chairperson Jimmy Lipunga, Director Dorothy Ngwira, CEO Macfussy Kawawa and Chief Finance Officer Masauko Katsala, they indicated that the results are a true reflection of the growth in customer deposits.
The profits are for the year ending 31 December, 2023 which represents a 56.62% profit compared to the previous year.
“These results were largely driven by growth in customer deposits, which resulted in increase in the loan book and fixed income securities,” reads the statement.
The statement was a testimony of the bank’s announcement that it has an impressive K71.96 billion profit compared to year 2022 where they made K45.9b profit.
It was revealed that the Net interest and investment income grew by 33% with an 86% increase in other income mainly arising from growth in foreign exchange commissions by 99% from K12.8b to K25.5b.
“Overall, net revenue grew by 50% as operating expenses increased by 25%, within the average inflation for the year,” it added.
However, the statement highlighted that net impairment losses continue to increase, reflecting the realities of the tough operating environment.
Consequently, customer deposits increased by 20% compared to the previous year as the Bank’s loan book grew by 31% with Investment in fixed Income securities grew by 10%.
Further, the statement said that all the subsidiaries of the Bank posted profits that contributed positively to the Group performance except for Akiba Commercial Bank (ACB) in Tanzania and an associate company, United General Insurance which posted losses but positive trends continue to be registered in the two entities where the results improved significantly from the previous period.
“Consequently, the losses registered for Akiba Commercial Bank and UGI were much lower than those of the prior period with the economy affected by the prevailing high inflation as well as continued foreign exchange supply challenges.
With the Malawi kwacha facing a devaluate of 63% between January 2023 and December 2024, the Bank said foreign exchange supply challenges persisted making the operating environment very challenging added by the weather shocks and geo-political landscape.
“We believe that the economy is expected to grow by 3.2% this year from 1.5% last year which will be supported by an increase in public investment and recovery in mining and quarrying, manufacturing, information and communication, financial and insurance activities, and education sectors.
“The resumption of the IMF-supported ECF program is expected to unlock foreign exchange inflows going into 2024 which will in turn support importation of raw materials and promote economic activity.
“The positive outlook is, however, clouded by El Nino-induced weather conditions, and a highly uncertain global economic and geo-political environment.”
In addition, the Bank said it is expected to sustain its enviable performance through its ability to leverage on its core strengths, address challenges and exploit opportunities in the market.
Therefore, the Bank Directors have recommend a final dividend of K23b (2023: K15b) makiya total dividend of K48.0b in respect of 2023 profits representing K104.94 per ordinary share (2022:K70.67 per share) and the final dividend will be payable after approval by the Annual General Meeting scheduled for June, 2024 and the second interim dividend of K14 billion will be paid in April, 2024 having paid the first interim dividend of K11 billion in September, 2023.
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