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National Bank of Malawi pre-tax profits up 110%

National Bank of Malawi (NBM), one of the financial institutions in the country has registered a 110 percent pre-tax profit jump.

In its financial statement for the year ended December 31, 2012 signed by the bank’s Chief Financial Officer MacFussy Kawawa, Chief Executive Officer George Partridge and Chairman Matthews Chikaonda, the bank says its pre-tax profits have gone up to K11 billion from K5.2 billion in 2011.

The bank described the first half of 2012 as generally poor due to excessive government controls on several aspects of the economy.

“This resulted in low business confidence levels generally, in addition to acute shortages of foreign currency, fuel and raw materials for most of our clients,” reads the statement in part.

NBM further said with the change of government regime in April, businesses started to recover in the second half of the year.

“Consequently, there were signs of a return to a favourable business climate in the second half of the year which resulted in the bank recording significant growth of business,” said NBM.

The statement also indicates that deposits and the loan book grew by 31 percent and 35 percent, respectively and that total earning assets went up by 44 percent while total income increased by 67 percent.

The bank’s total assets also increased to K129.4 billion during the period under review up from K92.1 billion.

On the future outlook, the bank said pressure on money supply growth and foreign exchange demand is expected to be sustained in the course of 2013.

“Significant unbudgeted government expenditure and its resultant effects will call for a continuation of a very tight monetary stance. The bank rate is, therefore, expected to remain high throughout 2013.

“Demand for credit in real terms is expected to be rather subdued because of the high cost of borrowing. Such an environment is likely to give rise to increased non-performing loans within the banking system,” read the statement in part.

NBM is listed on the Malawi Stock Exchange and has recommended a final dividend to its shareholders amounting to K1.5 billion representing K3.21 per share.

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