Five commercial banks listed on the Malawi Stock Exchange posted K724.5 billion cumulative net profit in 2025, maximising on interest income amid elevated interest rates and high domestic borrowing by government.
Published financial results show that the five banks; FDH Bank, Standard Bank, NBS Bank, NBM and First Capital Bank (FCB) posted K147.8 billion, K121.7 billion, K150.42 billion, K197 billion and K107.5 billion profit, respectively almost doubling the K384.46 billion 2024 profit to K724.42 billion in 2025.
For instance, FDH Bank plc profit more than doubled to K147.8 billion from K74.06 billion the previous year driven by significant increases in both interest and non-interest income streams.
This performance is coming at a time when 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.
According to the Reserve Bank of Malawi (RBM) latest Financial Stability Report, the banks’ capital and liquidity improved and remained above prudential thresholds.
In an interview, financial expert and stock market investor Benedict Nkhoma attributed the banks’ continued sound performance to their business with the government. He also noted that listed companies have generally performed well for the good part of 2025.
“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.
Nico Capital Limited chief executive officer Misheck Esau is quoted as having described the listed banks’ strong performance as critical to the market, but expressed concern that the sector is making the profits mainly from lending to the government instead of the real sector.
But he 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.
But Stock market investor Brian Kampanje is skeptical of the banks replicating the same performance in 2026 in an environment where interest rates are dropping and the government is determined to reduce borrowing which is likely going to reduce banks interest income.
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 the government.
Meanwhile, commercial banks’ extension of credit to the private sector slightly decelerated to 44.7 percent in the fourth quarter (Q4) of 2025 from 45 percent in Q3.
In the corresponding period in 2024, the private sector recorded 29.4 percent credit access, but on a quarterly basis, the stock of private sector credit increased by K55.4 billion to K2.3 trillion, according to RBM.
