Listed National Bank of Malawi (NBM) plc has registered a group profit after tax of K17.16 billion from K15.97 billion reported in 2018 representing an increase of 7%.

In a statement announcing the financial results ending 31 December 2019 signed by NBM plc Board Chairman George Partridge, Board Director Dorothy Ngwira, NBM plc Chief Executive Officer Macfussy Kawawa and Chief Finance officer Masauko Katsala, NBM plc said Non-interest income grew by 10% while Net interest and investment income grew by 12%.

“Overall Net revenue grew by 11% while operating expenses increased by 6%, notwithstanding staff rationalisation costs that were incurred during the first half of the year. The loan book grew by 13% and customer deposits increased by 8% year on year,” reads the statement dated March 31, 2020.

However, the bank noted that the economy experienced some negative shocks as a result of cyclone Idai which ravaged parts of the southern region coupled with poor tobacco export receipts compared to the previous year.

“Inflation averaged 9.4% in 2019 (2018: 9.2%) but closed the year 2019 at11.5% (2018: 9.9%) as a result of increases in food inflation attributed to seasonal factors,” reads part of the statement.

NBM plc also said the second half of the year, the banking industry adopted the use of a reference rate which has ranged from 12 % to 13.4%. The Reserve Bank of Malawi (RBM) has been gradually dropping the Policy Rate from 16% in January 2019 to the current 13.5%. Correspondingly commercial Banks have gradually reduced their lending rates.

“The Malawi Kwacha appreciated in the last quarter of 2019 from about K761/1USD at the beginning of July 2019 to K732/1USD at the end of 2019,” reads the statement.

The Bank paid an interim dividend of K2.5billion in September 2019, the same figure it paid in 2018 and a second interim dividend amounting to K1.5billion on 30 March 2020 also the same figure that it paid in 2018.

The directors of NBM plc have recommend a final dividend of K4.3billion compared to K3.5 billion in 2018, making a total dividend of K8.3b in respect of 2019 profits representing K17.78 per ordinary share compared to K16.06 per share as regards the profits of 2018. The final dividend will be payable after approval by the Annual General Meeting (AGM) scheduled for June 2020.

The bank projected that the economy was expected to grow by 5.2 % in 2020 on account of the agriculture sector due to favourable weather conditions. Inflation was also expected to start declining towards the medium-term target of 5% by end of 2021, according to NBM plc.

“The likelihood of achieving the above targets has now been undermined by an unstable operating environment arising from political uncertainty following the nullification of the Presidential election results as this could affect effective policy making and implementation. Climate shocks and the impact of the COVID-19 on the country and its trading partners will also affect the growth prospects,” reads the statement in part.

However, the Bank said it is implementing a strategy that seeks to embed customer centricity deeply into its culture with digitalization being one of the key pillars in the quest for delighting its customers.

“The year 2020 will therefore be characterized by the launch of various value adding digital initiatives,” reads part of the statement.

NBM plc also announced that in its efforts to expand its operations beyond the borders of the country, it is in the process of acquiring a controlling stake of a bank in Tanzania adding that the process of securing regulatory approvals both locally and internationally is underway.