NBS Bank profit up 16% amid tough environment
NBS Bank plc after-tax profit for the half-year ended June 30 2022 jumped to K5.1 billion, a 16 percent rise from the previous year’s K4.4 billion amid a tough operating environment.
In a published financial statement on Tuesday, the Malawi Stock Exchange-listed bank said it continued to deliver a positive performance, responding to a difficult operating environment, characterised by the impact of Covid-19, Russia-Ukraine war and inflationary pressures.
“Having successfully completed the first five-year strategy covering the period 2017 to 2021, the bank is driving further growth through a new five-year strategy [2022-2026] to increase market share and enhance efficiency,” reads a statement accompanying the financial results jointly signed by board chairperson Vizenge Kumwenda, chief executive officer Kwenele Ngwenya, chief finance officer Vera Zulu and director Matthews Mtumbuka.
During the year under review, NBS Bank plc net interest income jumped by 23 percent to K18 billion compared to K14.6 billion during the same corresponding period last year buoyed by the growth of loan book and effective management on investments in money market instruments.
Non-interest income, on the other hand, declined by eight percent to K5.7 billion, a drop from K6.1 billion during the same period last year, the bank said.
The bank has attributed the changes to compensation structure introduced in the second half of 2021 and increased investment in operating system to boost revenue-generating activities for pushing up operating expenses by 19 percent to K15.5 billion from K12.9 billion.
“Impairment changes improved significantly to K0.5 billion, down 61 percent from K1.3 billion in 2021 due to enhanced portfolio management,” reads the statement.
During the review period, NBS Bank plc registered growth in customer deposits in the six months to June 30 2022 to K281 billion from K174 billion in the prior period.
The figures show that loans and advanced grew by 85 percent to close at K106 billion from K57 billion boosted by the conversion of what the bank called “some signature deals in the corporate space” while money market investments grew by 12 percent to K211 billion from K188 billion during the same period the year before.
The bank has touted its performance amid the poor economic environment largely due to its flexibility in strategy implementation, which enable the bank to focus on high revenue generating activities.
NBS Bank plc said it will continue to maintain a robust capital and liquidity position and added that it is well positioned to pursue opportunities for growth this year amid a projected challenging second half of 2022 characterised global supply disruptions due to the Russia invasion of Ukraine and inflationary pressures.
The bank’s board of directors approved the payment of an interim dividend for the half-year amounting to K2.47 billion, an equivalent of 85 tambala per share. This is a jump from K1.75 billion or 60 tambala per share paid during the same periold last year, representing a 41 percent increase.
