Banks 2022 profits soar
Malawi Stock Exchange (MSE)-listed commercial banks profits for the year ended December 31 2022, have significantly increased, despite a subdued economic environment, published statements show.
Published financial statements from some of the banks, including FDH Bank plc National Bank of Malawi plc, NBS Bank plc and Standard Bank pl show that they posted higher profits than during the corresponding period last year.
A Standard Bank plc financial statement shows that its profit went up by 58 percent to K39.2 billion in the year-ended December 2022, from K 24.7 billion in the corresponding period in 2021.
Similarly, NBM plc, in its published statement, showed that profit-after-tax also grew to K45.9 billion profits in the period ended December 31 2022, up from K 34.2 billion reported during the same period in 2021.
NBM plc linked the growth in customer deposits which resulted in increased loan book and fixed income securities.
Profitability of NBS Bank plc more than doubled to K18.9 billion in the period ended December 31 2022, up from K7.7 billion the previous year, on account of what the bank attributed to growth in net interest income which grew on account of growth in its loans book and money market investments.
For FDH Bank plc, its profit-after-tax for the period ended December 31 2022 grew to K22.932 billion up from the K11.658 billion profit achieved over a similar period in 2021 on account of growth in net interest income.
Cumulatively, the four banks posted a profit of K1.26 trillion in the period ended December 31 2022 which is almost half of the current National Budget pegged at K3.87 trillion.
Commenting on the banks’ performance in the year, Bridgepath Capital Limited chief executive officer Emmanuel Chokani observed that the profits have been buoyed by non-interest income but mostly government business.
Said Chokani: “The high interest rate environment despite risks of credit impairment are leading to better bank performances while government securities yields which banks are investing in are also providing significant income.”
Weighing in Malawi University of Business and Applied Sciences Betchani Tchereni also observed that banks are capitalising on the government’s huge deficit which is being financed by domestic borrowing mostly from banks.
He said: “The truth of the matter is that government borrowing is the biggest business for the commercial banks. When the government is borrowing a lot like it is now, commercial banks are assured of a ready market.”
Meanwhile, due to the positive performance of the banks and other counters on the stock market, the stock market has performed well in the first quarter of this year, registering an increase in trading activity.
MSE operations manager Kelline Kondowe indicated that the good performance of the stocks is boosting the stock market.
Said Kondowe: “The market has performed very well in terms of price gains. As the Exchange we see this as evidence that the stock market offers a competitive avenue for value preservation and creation for investors even in challenging macroeconomic environments,” she said.
