Commercial banks in the country have made a combined record K128 billion profit between January and June 2023, a consolidation of published financial statements shows.
On average, the profit for the sector has grown by 103 percent when compared to results the financial institutions posted during the same time last year.
For instance, National Bank of Malawi reported a half-year profit of K35.48 billion, representing 60 percent growth from last year.
Standard Bank reported a K26.9 billion profit, a growth of 70 percent from the same time last year; First Capital Bank reported a K17.8 billion profit, a growth of 87 percent while FDH Bank reported a K15 billion profit, representing 72 percent growth from last year’s figures.
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Ecobank reported a K14.3 billion profit, representing 78.8 percent growth, NBS Bank posted a K12.16 profit illuminating a growth of 139 percent from last year figures, CDH Investment bank reported a K5.5 billion profit, an increase of 118 percent from last year same period results and Centenary bank reported a K970 million profit, reflecting 201 percent growth from last year’s.
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The performance has been attributed to myriad factors including increases in interest rates during the period, money market investments by some of the institutions, a rise in digital services uptake and rise in loans.
In an interview, economist Betchani Tchereni said the profits are coming from insatiable appetite for borrowing by the government.
In a recent interview, Bankers Association of Malawi President McFussy Kawawa said commercial banks remained well capitalised.
He added that, with digitalisation, there has been more agility and creativity that enables them to come up with solutions for customers and earn transactional revenue.
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“You will find that, even in times of hardships, transaction volumes remain high, thereby sustaining income levels. The spread has to be read in the context of the Malawi operating environment.
“High operating costs, default rates and other factors mean that spreads have to be maintained at a certain level for bank businesses to remain profitable. Remember shareholders need a fair return,” Kawawa said.
