Malawi’s banking sector is poised for a record-breaking year, with four listed banks projected to rake in a staggering K630 billion in profits in 2025, a whopping 88 percent jump from K335 billion in 2024.
Analysts have attributed this feat to a number of factors, including robust loan growth, sky-high interest rates and lucrative lending to the government.
The four banks have published trading statements, which show that National Bank of Malawi (NBM) plc expects profit of up to K211 billion from K98 billion in 2025 while FDH Bank plc projects its profit to rise to K152 billion from K74 billion the previous year.
NBS Bank plc expects profit to range between K145.5 billion and K150.5 billion from K72.9 billion in 2024 while Standard Bank plc projects its 2025 profit to be between K112.3 billion and K120.9 billion from K86.4 billion in 2024.
The expected profit is coming at a time the banks’ balance sheets are showing that the sector remained resilient up to the third quarter of 2025, maintaining adequate capital, satisfactory earnings, sufficient liquidity, improved asset quality and growth.
The Reserve Bank of Malawi (RBM) Financial Stability Report for October 2025 indicated that the banks’ capital and liquidity improved and remained above prudential thresholds.
Reads the report in part: “Likewise, asset quality significantly improved with the non-performing loans ratio dropping to 5.1 percent, reducing the sector’s exposure to credit risk. Total industry assets increased by 15.6 percent to K8.5 trillion.
“As such, the stability of the banking system as measured by the Banking Stability Index, significantly improved to 0.72 from 0.58 in December 2024, reflecting an increase in the banking system’s capital adequacy, liquidity and profitability compared to the previous period.”
In an interview on Wednesday, financial expert and stock market investor Benedict Nkhoma has attributed banks’ continued sound performance to their business with the government, but also noted that listed companies have generally performed well.
“Banks have over the past years performed exceptionally well above inflation. Regarding factors that have contributed to this high performance, banks have invested a lot in government borrowing in this high interest rate environment,” he said.
Nkhoma, a former banker, said it will be interesting to see the composition of the banks’ earnings once the results are out later this year.
Stock market investor Purity Chitaro said the huge banks’ profits in 2025 were driven by strong loan growth, high interest rates and rising customer deposits.
“If it were not for foreign exchange challenges, persistent inflation and public sector debt crowding out private investment, banks could have achieved even higher profits by year-end,” he said.
Nico Capital Limited chief executive officer Misheck Esau is quoted as having described listed banks’ strong performance as critical to the market, but expressed concern that the sector is making the profits mainly from lending to government instead of the real sector.
He said: “These top-performers you have have contributed greatly to wealth creation to their shareholders and I am sure many Malawians have benefited from this.”
But Esau said there is need to reverse the trend where most banks’ profits should come from private sector lending and in turn the private sector should invest in productive sectors to enhance economic development and wealth creation.
Consumers Association of Malawi executive director John Kapito said the banks’ surge in profits were emanating from charges and interests and mainly their lending to government.
“These loans and high interest rates they benefit from lending to the government is the main source of banks’ profits. Banks are really making money from a careless consumer, which is the government,” he said.
Meanwhile, commercial banks’ extension of credit to the private sector improved to 48.9 percent in the third quarter (Q3) of 2025 from 26.3 percent in Q2.
In the corresponding period in 2024, the private sector recorded 24.2 percent credit access, according to RBM.
