Saturday, October 5, 2024

FDH Bank posts K4.5 billion profit in half year financial results

Must Read
George Chitera- FDH Bank plc Acting Managing Director

Listed FDH Bank plc has registered a half year Profit after tax of K4.550 billion up from K3.223 billion achieved over a similar period in 2020.

In a statement signed by FDH Bank plc Board Chairperson Charity Mseka, Acting Managing Director George Chitera, Board Chairperson for Finance and Audit Committee Ulemu Katunga and Head of Finance Richard Chipezaani, the bank said the net interest income has gone up by 70% on the back of the increase in the loan book and other interest-bearing assets while Interest expense has gone up by 31% reflecting the growth of the Bank’s deposits.

“Non-interest income decreased by 18% mainly due to the slowing down of business because of the Covid-19 pandemic. International trade and local business transaction volumes continue to be negatively affected by logistical challenges faced in the international supply chain as a result of lockdowns in trading partner countries. The increase in net interest income that was partly offset by the decrease in non-interest income resulted in total income growth of 19%,” reads the statement in part.

The bank also said operating expenses grew by 6% when compared to the same period last year.

“The Bank continues to put more focus on effective cost management as we continue to bring down the cost to income ratio. Total assets increased by 30% from December 2020 mainly emanating from the increase in loan book by 22% and Government Securities by 70%. Notwithstanding the growth in the loan book, non-performing loans (NPL) ratio stood at 1.24% as at 30 June 2021. Customer deposits increased by 13% from K164 billion to K179 billion,” reads the statement in part.

The Bank also bemoaned the impact of the Covid-19 pandemic saying it had an effect on the half year performance as economic activities continued to be suppressed as a result of the second wave of infections.

Charity Mseka-FDH Bank plc Board Chairperson

“Most of the corporates and businesses continued operating at reduced capacity with the intention of maintaining social distance and suppressed consumer demand. Travel restrictions and lockdowns in trading partner countries slowed down most of the local businesses. This in turn slowed down the non-funded business growth as the number of customer transactions went down,” said the bank in the statement.

The Bank also said the expected credit losses also increased because of the increase in credit risk due to the slowing down of business activities and economic growth in general.

Looking ahead, the Bank notes, inflation is expected to remain in single digits averaging around 9.5% to the end of 2021 on account of declining food prices on the back of a good harvest. The Bank also anticipates the Kwacha/US Dollar exchange rate to average MK845/US$ in 2021 while the Malawi growth domestic product (GDP) growth is projected to average between 1.5% and 2% in 2021.

“The Bank continues to implement the new cycle of strategic objectives running from 2021 to 2024, focusing on leveraging on our market position, widest distribution network, effective digital platform, brand equity, and strong financial performance.”

“The Bank remains committed to creating value to our customers, shareholders and other stakeholders by focusing on growing revenue and market share, reducing operating cost for sustainable performance and profitability, creating highly engaged employees and contributing significantly to the creation of an inclusive, diverse and sustainable society,” reads the statement in part.

FDH bank plc directors therefore approved an interim dividend of K2.3 billion in respect of 2021 half year profits representing 33t (K0.33) per share. The dividend will be paid on 27 August 2021 to members appearing in the register of the Company as at close of business on 13 August 2021.

- Advertisement -spot_img

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -spot_img
Latest News

NBS Bank plc pumps K10 million into cultural festivals  

Listed NBS Bank has donated a total of K10 million to two cultural festivals, the Gonapamuhanya Cultural Festival and...
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img