National Bank posts K42.1bn profit in H1

The National Bank of Malawi (NBM)plc has announced a 19% surge in profit after tax, reaching 42.1 billion kwacha for the first half of 2024, ending June 30.

This significant increase from the previous year’s 35.5 billion kwacha is attributed to substantial growth in customer deposits, which in turn boosted the bank’s loan book and investments in fixed income securities, as revealed in the latest financial statement.

NBM plc reports that in the first half, customer deposits increased by 30% which largely pushed the Bank’s loan book to grow by 42%.

Investment in fixed income securities grew by 19% as a result, net interest and investment income grew by 47%.

The bank also reveals that the revision of the policy rate from 24% to 26% in February 2024 further influenced the reference rate and contributed to growth in interest income.

In addition, there was a 36% increase in other Income mainly arising from growth in foreign exchange commission from K10.0b to K18.8b.

The increase in other income is also explained by inclusion of income from United General Insurance Company Limited that was consolidated for the first time during the reporting period.

On equity investments and subsidiaries performance, the bank increased its equity in UGI from 47% to 55% during the first half of the year following a successful agreement with other shareholders and its technical partners.

And all the subsidiaries of the Bank posted profits that contributed positively to the Group performance except for Akiba Commercial Bank (ACB) in Tanzania which posted a loss of 2.6billion kwacha compared to a profit of K0.13b in the same period last year.

The bank attributed the ACB performance to have been adversely affected by a staff rationalization exercise that took place during the first half of the year.

Meanwhile, the bank is projecting a shacky second half as the country’s economic growth prospects will be impacted by persistent inflationary pressures on the economy, the foreign exchange supply challenges and the impact of the El Nino weather conditions on agricultural production, the underperformance of the export sector and higher global oil prices.

The annual average inflation for 2024 has been revised to 33.5% from 30%.