Malawi Stock Exchange-listed, Standard Bank, on Thursday reported a 37 percent slump in after-tax profit for the year ended December 31 2017.
The bank said it posted a profit of K12.162 billion which is K7.263 billion shy of the K19.425 billion realised in 2016.
The development has been attributed to credit loses perpetuated by growth of non-performing loans, especially in the agriculture sector.
“Credit impairments were significantly above prior year due to growth of the non-performing loan book, especially in the agriculture sector. The group will focus on robust credit risk management to avert future non-performing loans and emphasis on recoveries of written off loans,” the bank said in a statement.
Standard Bank Chairperson, Rex Harawa, said the development will also reflect on the returns for its shareholders.
The bank said earnings per share for the year have decreased from K83 per share in 2016 to K52 per share in 2017.
Operating income grew by six percent over same period in prior year due to a six percent growth in net interest income driven by growth in loans and advances to banks. Non-interest income also grew by six percent due to an increase in transaction volumes.
Looking ahead, Harawa said the local economy is still subjected to risks from weather-related shocks and power challenges despite a stable macroeconomic environment being anticipated for the most part of 2018.
“As a group, we remain committed to ensuring customer satisfaction. In order to improve customer satisfaction and improve efficiencies, the group implemented a new core banking system during the year.
“With the new system in place, we will drive digitisation in order to improve customer experience. We will also focus on cost rationalisation, prudent management of risk and liquidity, diversify balance sheet and maintain a healthy capital position,” Harawa said.
Today’s top business story: Top Commercial Banks In Malawi
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