Bank outlines risks facing economy
Malawi Stock Exchange-listed Standard Bank has said economic outlook remains murky as the country faces myriad challenges that are posing a greater threat to doing businesses.
Addressing investors virtually during the 2022 Half Year Investor Briefing Tuesday, Standard Bank Chief Executive Phillip Madinga said exogenous shocks and structural domestic challenges continue hampering economic growth prospects for Malawi.
Madinga singled out disrupted supply chains on the global market due to the Russo-Ukrainian War, coupled with persisting inflationary pressure on the domestic market, among key challenges facing the economy.
He said dwindling forex reserves resulting from supply and demand mismatches also continue piling pressure on the local unit, the Kwacha, despite the 25 percent devaluation effected in May.
“The option to devalue the currency did not help matters,” Madinga said.
He also lamented elevated public debt level, saying it piles pressure on the already volatile fiscal space.
Madinga said the bank expects a slow economic growth as inflation and tighter financing conditions bite.
“We do hope, as we go, that the much awaited IMF [International Monetary Fud]’s Extended Credit Facility will come soon as it would really be a plus for donor confidence as well as investor confidence if we are to achieve the targets,” Madinga said.
Meanwhile, for the half year ended June 31 2022, the bank announced to have posted a 37 percent growth in its profit after tax to K15.8 billion from K11.6 billion posted during the same time last year.
The buoyant performance, according to Madinga, was despite the volatility in the operating environment.
The bank saw a 35 percent increase in customer deposit during the period under review to K492.6 billion from K364.9 billion.
Loans and advances also grew by 18 percent from K185.3 billion to K218.8 billion by end of June.
Going forward, Madinga said the bank will remain resilient, while offering competitive and innovative range of products and services to the market.