The Malawi Savings Bank (MSB) has registered K1 billion profit after tax in the first half of the 2015 financial year compared to K504 million recorded during the same period in 2014.
But the published summary of unaudited financial results for the period ended June 30, 2015, signed by chief executive officer Ian Bonongwe and FDH holdings’ chief executive officer Thomson Mpinganjira, show that the bank’s deposit portfolio dropped over the period under review.
According to the report, the deposit portfolio declined from K 40.3 billion at 31 December 2014, to K29.7 billion as at 30 June, representing a 36 percent drop.
“The significant loss of deposits was a direct consequence of withdraws by customers due to the uncertainty on the future of the bank after the government of Malawi announced its intention to dispose its majority shareholding in the bank.
“This resulted in the bank facing significant liquidity challenges in addition to non-compliance with Basel II capital requirement,” reads part of the statement.
According to the published accounts, the impact of these challenges on the bank’s financial performance was partly mitigated by the government’s decision to issue out promissory notes amounting to K6 billion to replace the non-performing loans that were contributing to the bank’s liquidity challenges.
Looking forward, the bank expects to continue on a profitable and sustainable growth path for the remaining part of the year 2015 and the long term.