FMB K3.5bn profit in line with forecast
First Merchant Bank (FMB), whose K3.5 billion after-tax profit in the half year ending June 30 is in line with forecast, expects its balance sheet to grow as the economy absorbs the impact of major macroeconomic policy shifts.
The Malawi Stock Exchange (MSE)-listed bank’s after-tax profit jumped 105 percent from K1.7 billion same period last year, in tandem with the cautionary statement which indicated its profit will be in excess of 100 percent than the prior period.
The bank’s assets, in the period under review, jumped 18.5 percent to K58.9 billion from K49.7 billion, which included K4 billion in connection with the acquisition of the operations of International Commercial Bank (ICB) in Malawi, Mozambique and Zambia.
“The group continues to deploy a significant proportion of its asset base in liquid low risk money market investments and cash equivalents totalling some K18.5 billion which equates to over 30 percent of the total group assets and more than 50 percent of customer deposits,” reads in part the statement accompanying the results jointly signed by managing director Dheeraj Dikshit, general (Finance) Lucas Kondowe and one of the directors John O’Neill.
The bank, whose earnings per share (EPS) have gone up to K1.52 from 73 tambala, sees interest rates easing largely buoyed by a declining rate of inflation and improving market liquidity.
It forecasts reduced foreign exchange for the private sector as the tobacco market season comes to an end.
“We therefore expect interest margins to narrow and foreign exchange trading volumes to contract somewhat in the second half of the year,” says the statement.
Revenue from tobacco, Malawi’s principal foreign exchange earner, was recorded at K347.5 million as August 2 2013, according to figures from Auction Holdings Limited (AHL).
FMB expects continuing robust performance in the second half.
In the year ended December 2012, the bank reported a 70 percent jump in after-tax profit to K3.4 billion from the previous year’s K2 billion, but five percentage points below the 75 percent projected growth.
