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FMB profits fall 2.6 percent

Posted about K3.5 billion profit for the period ending June 2014: First Merchant Bank
Posted about K3.5 billion profit for the period ending June 2014: First Merchant Bank

Malawi Stock Exchange (MSE) listed financial services group, First Merchant Bank (FMB) posted about K3.5 billion profit for the period ending June 2014, about 2.6 percent below profit achieved same period last year.

Although FMB’s summary of unaudited results for the period ended June 2014 published in the press indicate that the group’s profits fell from K3.6 billion in the period ending June 2013, incomes including interest and non interest income for same period this year rose.

The results, however, indicate that the group had a negative other comprehensive income of K174 million between January and June 2014 compared to zero same period last year.

According to the results that have been co-signed by FMB group managing director Dheeraj Dikshit, group finance director John O’Neill and general manager Lucas Kondowe, the group’s net interest margins remained satisfactory while non funded income lines continued to grow strongly.

The bank further notes that cost containment remained a major challenge as the group worked towards harmonising and improving group technology platforms and service delivery standards.

The group has also said that it enjoyed relatively modest balance sheet growth over the period across all operating territories but elected not to compete aggressively in the higher cost and more volatile wholesale deposit market.

FMB has also said that general business confidence showed signs of improvement enabling the bank to increase group lending by 21 percent, but continue to conservatively manage its balance sheet and maintain a relatively high 41 percent of total group assets in liquid money market investments, cash and cash equivalents.

Against the bank’s performance, FMB’s directors have declared a first interim dividend of K1.168 billion or 50 tambala per share.

Earlier FMB announced a 75.3 percent increase in profit after tax to K5.99 billion for the year ended December 2013. The bank also declared a second interim dividend of 30 tambala per share compared to 10 tambala in 2012 to be paid on 17 April 2014 and a proposed final dividend of 10 tambala per share compared to five tambala in 2012.

In June last year, FMB announced the acquisition of 100 percent shares in ICB Malawi, 70 percent of ICB Mozambique, and 62 percent of ICB Zambia all of which were licensed commercial banks in their respective countries.

 

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