Malawi’s Banking Sector Sees Remarkable Growth in 2025 First Half, Fueling Economic Optimism

Key Business Points

• FDH Bank has reported a 116 percent surge in profit after tax to K60.279 billion, driven by a 92 percent increase in net interest income and a 62 percent year-on-year growth in its loan book.
• Standard Bank has achieved 14 percent growth in profit after tax to K48.4 billion, with net interest income growing by 44 percent, despite facing challenges with credit impairments surging by 166 percent.
• Centenary Bank has demonstrated the strongest profitability growth among the three lenders, with profit before tax skyrocketing by 149 percent to K3.6 billion, driven by a 57 percent growth in total assets and a 38 percent expansion in client deposits.

The banking sector in Malawi has shown varying degrees of profitability growth amid challenging macroeconomic conditions, characterized by high inflation and foreign currency shortages. According to published half-year performance statements by three of the eight commercial banks operating in the country, FDH Bank, Standard Bank, and Centenary Bank have all reported significant growth in their profitability.

FDH Bank’s impressive performance was driven by a significant increase in net interest income, supported by a substantial growth in its loan book and increased holdings of other interest-bearing assets. The bank’s total assets expanded by 54 percent compared to June 2024, primarily due to growth in the loan portfolio and government securities investments. As Guru za boma (business experts) would say, "Kukongola kwa mabizi kupanga msokono" (Diversification is key to success), and FDH Bank’s strategic decision to reduce term deposits to manage interest expenses has paid off.

Standard Bank also reported solid growth, with profit after tax rising by 14 percent to K48.4 billion. The bank achieved a 37 percent increase in total revenue, with net interest income growing by 44 percent supported by a 34 percent expansion in loans and advances to customers and a 65 percent increase in financial investments. However, Standard Bank faced challenges with credit impairments surging by 166 percent compared to the previous year, reflecting both portfolio growth and an increase in credit downgrades. As Wandale ulende (entrepreneurs) would know, managing credit risk is crucial in times of economic uncertainty.

Centenary Bank demonstrated the strongest profitability growth among the three lenders, with profit before tax skyrocketing by 149 percent to K3.6 billion from K1.4 billion in December 2024. The bank’s total assets grew impressively by 57 percent to K219.6 billion compared to June 2024, while client deposits expanded by 38 percent to K136 billion. However, the bank’s net loan portfolio declined by 0.44 percent due to increased provisions and write-offs from a poor-quality legacy loan portfolio. As Mkumchile mabizi (business owners) would attest, managing legacy loans is essential to maintaining a healthy loan portfolio.

Overall, the banking sector in Malawi has shown resilience in the face of challenging macroeconomic conditions. As Osati a sitolo (small business owners) and Wandale ulende (entrepreneurs) navigate the current economic landscape, they can draw valuable insights from the performance of these banks. By kukongola kwa mabizi (diversifying their investments) and managing credit risk, businesses can position themselves for success in the soko la Malawi (Malawian market).

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