MALAWI – National Bank of Malawi (NBM) has registered a group profit after tax of K17.16 billion (US$23.29m) from K15.97 billion (US$21.67m) reported in 2018 representing an increase of 7%.

NBM plc said in a statement that non-interest income grew by 10% while net interest and investment income grew by 12%.

“Overall net revenue grew by 11% while operating expenses increased by 6%, notwithstanding staff rationalisation costs that were incurred during the first half of the year. The loan book grew by 13% and customer deposits increased by 8% year on year,” read part of the statement.

However, the bank noted that the economy experienced some negative shocks as a result of Cyclone Idai which ravaged parts of the southern region coupled with poor tobacco export receipts compared to the previous year.

Inflation averaged 9.4% in 2019 (2018: 9.2%) but closed the year 2019 at11.5% (2018: 9.9%) as a result of increases in food inflation attributed to seasonal factors.

NBM plc also said the second half of the year, the banking industry adopted the use of a reference rate which has ranged from 12 % to 13.4%.

The Reserve Bank of Malawi (RBM) has been gradually dropping the Policy Rate from 16% in January 2019 to the current 13.5%. Correspondingly commercial Banks have gradually reduced their lending rates.

“The Malawi Kwacha appreciated in the last quarter of 2019 from about K761/1US$ at the beginning of July 2019 to K732/1US$ at the end of 2019,” reads the statement.

The Bank paid an interim dividend of K2.5 billion (US$3.39m) in September 2019, the same figure it paid in 2018 and a second interim dividend amounting to K1.5billion (US$2.04m) on 30 March 2020 also the same figure that it paid in 2018.

The directors of NBM plc have recommend a final dividend of K4.3billion (US$5.84m) compared to K3.5 billion (US$4.75m) in 2018, making a total dividend of K8.3 billion (US$11.27m) in respect of 2019 profits representing K17.78 per ordinary share compared to K16.06 per share as regards the profits of 2018.

The final dividend will be payable after approval by the Annual General Meeting (AGM) scheduled for June 2020.

The bank projected that the economy was expected to grow by 5.2 % in 2020 on account of the agriculture sector due to favourable weather conditions. Inflation was also expected to start declining towards the medium-term target of 5% by end of 2021, according to NBM plc.

NBM plc also announced that in its efforts to expand its operations beyond the borders of the country, it is in the process of acquiring a controlling stake of a bank in Tanzania adding that the process of securing regulatory approvals both locally and internationally is underway.