Malawi Stock Exchange-listed National Bank of Malawi (NBM) plc has registered a 60 percent increase in its 2023 half-year profit-after-tax to K35.48 billion from K22.12 billion reported during the same period last year.
According to a financial statement released by the bank and signed by its board chairperson Jimmy Lipunga, chief executive officer McFussy Kawawa, chief financial officer Masauko Katsala and board director Dorothy Ngwira, the performance was driven by growth in both net interest income and other income.
The bank’s net revenue grew by 44 percent while operating expenses increased by 28 percent.
The bank’s net-impairment losses went down by 61 percent on account of a rise in recoveries.
According to the report, the bank’s customer deposits increased by 28 percent as its loan book grew by nine percent.
Investment in fixed income securities grew by 13 percent.
All the subsidiaries and an associate of the bank posted profits that contributed positively to the group’s half-year performance.
However, the bank says its performance for the period under review was adversely affected by economic shocks.
“The growth in the first half of 2023 was adversely affected by exogenous and weather-related shocks, in the aftermath of Tropical Cyclone Freddy and dry weather conditions in the Northern Region,” the statement reads.
The bank also notes that the excess foreign exchange demand conditions remain the catalyst for continued local currency depreciation against the currencies of the major trading partners despite the ongoing tobacco auction season.
“The monetary policy authorities signaled the introduction of a foreign exchange rate price discovery initiative by introducing currency auctions, the first one of which was conducted in mid-June 2023, resulting in a mild 3 percent depreciation of the Malawi Kwacha while the country also experienced fuel supply shortages,” the statement reads.
NBM says inflation is expected to remain elevated, premised on the low agricultural output and heightened demand-side inflationary pressures emanating from fiscal risks, second round effects of Cyclone Freddy, and the exchange rate depreciation.