Listed NBS Bank plc has posted a K4.4 billion profit for the first half of 2021 representing a 55% jump compared to the same period last year.
In a statement signed by the bank’s Board Chairman Vizenge Kumwenda, Director Matthews Mtumbuka, Chief Executive Officer Kwanele Ngwenya and Chief Finance Officer Vera Zulu, the bank said it has successfully navigated many challenges presented by the Covid-19 pandemic to deliver a robust financial performance in the first half of 2021 through continuous focus and implementation of its five-year strategy that is aimed at accelerating digital transformation, building a strong balance sheet, and enhancing efficiencies across the bank.
“Net interest income grew by 10% in 2021 compared to a similar period in 2020, largely because of growth of loan book and effective management of investments in money market instruments. On the other hand, non-interest revenue registered a growth of 35% on prior year performance on the back of some once-off income and cash flows,” reads the statement in part.
The bank said it has made very good progress on implementation of its five-year strategy, which places a leading digital offering at the centre of the vision for superior customer experience which has translated to increased transaction volumes and income growth.
“Operating expenses registered 3% growth in the prior year due to planned investments in our operating systems and increases in revenue generating transactional expenses. The financial results show that the Bank is achieving greater efficiencies across the board. The Bank registered a 26% growth of customer deposits during the six months to 30th June 2021.”
“The Bank registered a 13% growth of customer deposits during the six months to 30th June 2021. Money Market investments grew by 61% but loans and advances decreased by 3% due to planned repayments of seasonal facilities. The improvement of the Bank’s performance in the first half of 2021 amidst the current environmental challenges is due to flexibility in strategy implementation which has enabled the bank to focus on high revenue generating activities,” reads the statement in part.
On the economic outlook for the country, NBS Bank says the second half of 2021 is challenging.
“Malawian Gross Domestic Product (GDP) projections have been revised downwards by over 50% and the same will grow by an estimated average of 2.78% in 2021 from a 6.1% initial projection. The third wave of Covid-19 pandemic will negatively affect GDP growth for 2021 further, though the roll out of vaccines offers some hope,” reads part of the statement.
“Inflation is expected to drop further from the current 9%, with a major pull-down effect coming from food inflation. However key challenges include weakening of demand due to effects of the Pandemic on the economy and the gradual depreciation of the Malawi Kwacha. The bank’s strong balance sheet, with strong capital Ratios and liquidity positions, provide a solid foundation for future growth,” reads part of the statement.
The Bank says it will continue to monitor significant developments and changes in the monetary policy to make sure it mitigates risk on performance and continues to be resilient in its performance and is positive that its turnaround journey continues in full force despite the current challenges in the operating environment and projects in 2021 and beyond.
The Board of Directors of the Bank has recommended payment of an interim dividend for the half year ended 30 June 2021 of MK 1.75 billion representing 60 tambala per share (June 2020: MK1.3 billion representing 45 tambala per share). The dividend will be paid on Friday 24 September 2021 to shareholders appearing in the Register of Members as at close of business on Friday 10 September 2021. The Register of Members will be closed from 11 September 2021 to 13 September 2021.