FDH Holdings posts K11.3 billion profit after tax: 44 percent growth

FDH Financial Holdings has posted a profit after tax of K11.3 billion for the year ending 31 December 2019 from a profit of K7.8 billion in 2018 representing a 44% growth.

A published financial statement   jointly signed by signed by the group’s board chairperson Noel Mkulichi, Finance and Audit Committee chairperson Ulemu Katunga and acting chief executive officer George Chitera, the group also said total income grew by 38% from K32.3 billion to K44.6billion and Net Interest Income grew by 49% emanating from the growth in interest earning assets while non – Interest income grew by 34% due to the increase in revenue from the Group’s non-funded income.

“Total assets grew by 26% mainly emanating from the growth in loans and advances, government securities and growth in Plant, Property and Equipment and other assets driven by Group’s investment in Digital products.”

“Bills and buy backs and loans grew by 20% from K45.6 billion in 2018 to K 54.5 billion in 2019 and Treasury and RBM bills increased by 53% from the previous year balance of K 44.9 billion to K68.6 billion in 2019.Customer deposits increased by 20% from K111.0 billion to K133.1 billion,” reads the statement in part.

The statement further said the Group continued to invest in digital products and other distribution channels as the focus is to improve customer experience as well as diversifying sources of non- interest income.

FDH Financial Holdings noted through the statement that the operating environment saw headline inflation remain relatively stable averaging 9.4%.

“The Kwacha had a year on year depreciation of 0.7% against the dollar and the policy rate went down to 12.5% from 2018’s closing position of 18%resulting in the all-type Treasury bill rate declining to 8.04% in 2019,” reads the statement in part.

Going forward, the group notes, inflation is expected to average around 8% and FDH Financial Holdings anticipate the Kwacha/US Dollar to remain stable in 2020 and Malawi GDP growth rate is projected to average between 5% and 6%, according to the Reserve Bank of Malawi.

“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.  We anticipate the low interest rates regime to continue and spur private sector credit growth in 2020,” reads part of the statement.

The trio said in the statement that FDH Financial Holdings’ focus is to continue improving and consolidating its non-interest income through its customer centric innovative solutions and will continue to prudently manage credit risk and build on the already existing strong credit processes.

The group also said preparations to list FDH Bank, one of its subsidiaries 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 home grown and leading digital Bank.”

“We are indebted to our esteemed clients, shareholders, management, staff, the Government of Malawi, the Reserve Bank of Malawi and all other stakeholders for their continued unwavering support to the FDH Group of companies,” reads the statement in part.

Apart from FDH Bank, First Discount House and FDH Money Bureau are among other subsidiaries of FDH Financial Holdings.  FDH Bank is expected to list on the Malawi Stock Exchange by June this year.

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