By Taonga Sabola:
Malawi’s biggest commercial bank by assets, National Bank of Malawi (NBM), saw its after-tax profit shrink by 16.6 percent last year from K19.15 billion recorded in 2017 to K15.97 billion.
In its financial statement on Friday, NBM has attributed the shrinking profitability to subdued loan book in the first half of the year.
The bank says non-interest income increased by 11.2 percent while its loan book grew by 21 percent mostly in the second half of the year mainly from the SME and personal sectors.
During the year, the bank says customer deposits increased by 5.8 percent.
NBM says, in spite of the generally stable environment, economic activity was for the greater part of the year muted, as, among other factors, the country continued to experience prolonged power outages which affected customers’ productivity and appetite for credit and other banking facilities.
The statement says the bank’s directors have recommended a final dividend of K3.5 billion which would bring the bank’s total dividend for 2018 to K7.5 billion, representing K16.06 per ordinary share, down from K19.30 per share in 2017.
Looking ahead, the bank says it expects the local economy to grow by 5.3 percent.
It is however, quick to note that downside risks to achieving this growth include the recently experienced flooding and other weather-related exogenous shocks as the agriculture sector is still dependent on rain-fed crop production, coupled with power challenges.
“The bank is implementing a strategy that seeks to embed customer centricity deeply into the culture of the business with digitalisation being one of the key pillars in the quest for [sic] delighting its customers.
“The board envisages a continuing stable macroeconomic environment resulting in increased commercial activity and therefore an improvement in the bank’s performance through its ability to leverage on its strategy and core strengths to address challenges and exploit opportunities in the market,” reads the statement in part.
Today’s top business story: Top Commercial Banks In Malawi