Listed National Bank of Malawi (NBM) plc has announced an increase in their profit after-tax for year ending 31 December 2022 to K45.94 billion from K34.21 billion in the previous year representing a 34% increase.
A financial statement released by the Bank signed by NBM plc Board Chairman Jimmy Lipunga, Board Director Dorothy Ngwira, Chief Executive Officer Macfussy Kawawa and Chief Finance Officer Masauko Katsala said the results were driven by growth in customer deposits.
“Consequently, Net interest and investment income grew by 38%. In addition, there was growth in foreign exchange commissions. Overall net revenue grew by 26%. Operating expenses increased by 16%, a pace lower than the average inflation for the year.”
“On the other hand, impairment losses increased by 60% due to cleaning up of our foreign subsidiary’s loan book. Customer deposits increased by 45% year on year (2021: 38%) while the Bank’s loan book grew by 29% (2021: 20%). Investment in Fixed Income securities grew by 16% (2021:66%),” reads the statement.
The Bank has further acknowledged that all its subsidiaries contributed to the positive performance apart from Akiba Commercial Bank (ACB) in Tanzania and an associate company, United General Insurance which reported losses.
“Malawi economy grew by 1.7% in 2022 (2021: 4.2%). The growth in 2022 was adversely affected by weather related shocks in some parts of the country such as erratic rains and cyclones, low supply of foreign exchange and the Russia/Ukraine war which led to global supply chain challenges and high commodity prices.”
“The country also experienced protracted power supply disruptions in addition to fuel supply shortages. The Malawi Kwacha was devalued by 25% in May 2022. However, despite the devaluation foreign exchange supply challenges continued resulting in a significant build-up of arrears in foreign payments,” reads the statement in part.
NBM plc has however projected challenges to the 2023 performance growth due to the impact of the Cyclone Freddy in the southern region, electricity and the foreign exchange supply.
“The Bank completed implementation of its 5-year strategic plan in 2022. A new strategic plan has been developed for 2023 to 2027 to take the Group to the next level and turn around strategies have been put in place to turn the two entities ACB and UGI that made losses into profitable entities.”
“The Board envisages a continuing challenging operating environment due the factors enumerated above. However, the Bank is expected to sustain its enviable performance through its ability to leverage on its core strengths, address challenges and exploit opportunities in the market, the hostile environment notwithstanding,” reads the statement.
Meanwhile the directors have recommended a total dividend of K33.0 billion in respect of 2022 profits representing K70.67 per ordinary share from K49.26 per share in 2021.