NBS Bank posts 130 percent profit in 2018
Malawi Stock Exchange (MSE)-listed NBS Bank plc says it expects profit after tax for the year ending December 31 to be approximately 130 percent after two years of losses.
The bank has been on a recruitment drive and training of its staff and also partnered Rabobank, a technical partner from The Netherlands.
In a trading statement published on Friday and signed by NBS Bank plc company secretary Marsha Ovi Machika, the bank said the profit is higher than the loss recorded during the previous corresponding period.
In July this year, the bank, which is a subsidiary of listed Nico Holdings plc, successfully raised K11.8 billion (about $16.2 million) through its rights issue—an issue of shares to a company’s existing shareholders that entitles them to buy additional shares directly from the company in proportion to its existing holdings, within a fixed period. The bank issued over 2.18 billion new ordinary shares at K5.40 per share.
NBS Bank had since December 2015 been struggling to meet the minimum capital requirement as per Basel II, a directive that requires that banks’ Tier 1 capital and total capital ratio be at 10 percent, and 15 percent respectively.
Nico Holdings plc chief executive officer, who is also the bank’s chairperson, Vizenge Kumwenda, said the development meant the bank was now able to meet regulatory requirement of Basel II and return to its recovery path.
“Our business was a bit constrained, we could not trade as we wanted, particularly in lending business but now we have to start doing that because we have the capacity. All these translate into business of the bank in terms of profit as you are aware that we have been making loses for the past two years, partly because of constrained volumes of businesses,” he said.n
