FDH Bank profit hits K7.8 billion: On track to list at Malawi Stock Exchange

FDH Bank has reported a profit after tax of K7.846 billion for the financial year ending 31 December 2019 representing a 32% growth from a profit of K5.965 billion reported in 2018.

In a statement signed by the Board Chairman of FDH Bank, Arthur Oginga, the Chairman of the Finance and Audit Committee Dr. Ulemu Katunga and the Managing Director Dr. Ellias Ngalande, the bank said total income grew by 18% from MK29.066 billion to MK34.389 billion.

“Net Interest Income went up by 7% on the back of the increase in the loan book which was partly offset by the changes in the monetary policy and the introduction of the Reference Rate. These changes saw the policy rate move from 18% in 2018 down to 12.5% at the close of 2019. Interest expense went up by 15% reflecting the growth of the Bank’s deposits.  Non-interest income grew by 23% due to the increase in revenue from our non-funded income,” reads the statement in part dated 18th February 2020.

The locally grown bank also said total assets grew by 24% year on year mainly emanating from the increase in loans and advances by 40% and Government securities by 19%.

“This growth is in line with the Bank’s strategy to grow the interest earning assets,” reads the statement.

The Bank said customer deposits increased by 22% from MK112.570 billion to MK137.140 billion. Notwithstanding the growth in the loan book, NPL ratio dropped from 1.41% in 2018 to 0.80% by close of 2019, against an industry average of 6.1%, the statement advised.

“The Bank’s continued investment in the digital platforms, delivery channels, human capital and other customer centric innovations resulted in the increase in operating expenses by 14% from 2018. The focus for the Bank is to improve customer experience as well as diversifying sources of non- interest income. The Bank will continue to put more focus on effective cost management as we continue to bring down the cost to income ratio,” reads part of the statement.

Looking ahead, FDH Bank noted that inflation is expected to average around 8% and it anticipates the Kwacha/US Dollar exchange rate to remain relatively stable in 2020 while the Malawi GDP growth rate is projected to average between 5% and 6%, according to the Reserve Bank of Malawi.

“We anticipate the low interest rates regime to continue and spur private sector credit growth in 2020.Private sector credit annual growth in 2019 was 21.3% from 11.5% growth in 2018. The stronger growth in private sector credit in 2019 mainly reflected reduced interest rates in 2019,” reads the statement in part.

The Bank also said it will continue to consolidate and improve on the convenient delivery channels through its digital products and providing first class financial solutions as well as continuing with upgrading its existing network infrastructure to bring it up to standard so as to improve customer experience.

On its intended listing, FDH Bank said preparations to list on the Malawi Stock Exchange this year are on track and progressing very well.

“FDH Bank’s listing will give a chance to the public and all Malawians to invest in the homegrown Bank,” reads the statement.

The Bank also thanked its esteemed clients, shareholders, management, staff, the Government of Malawi, Reserve Bank of Malawi, and other stakeholders for their continued and unwavering support.

“FDH Bank has the widest and largest branch network in Malawi with 51 service centres and the most reliable and most used ATMs network that handles over 60% of all ATM transactions in Malawi. The bank is also one of the leading digital banks in Malawi and is known for introducing cutting edge innovative financial solutions. Recently, it introduced WhatsApp Banking among other digital innovations,” reads the statement in part.

Commenting on the way the year 2020 has started, FDH Managing Director Dr. Ellias Ngalande said: “The Bank has started the year 2020 on a strong footing and is likely going to continue growing and sustaining its strong performance as it implements its 2020 strategy.”

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