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National Bank of Malawi upbeat over economic stability

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Malawi Stock Exchange (MSE) listed National Bank of Malawi (NBM) says it is optimistic that the positive trajectory recorded in some fundamentals of the economy will persist, a development that may influence a further growth of the business in 2017.

This was said on Thursday in Blantyre during the bank’s 45th Annual General Meeting (AGM) where it touted substantial business growth in the year ending 31st December 2016, despite a challenging operating environment.

However, the country’s biggest bank based on assets says the outlook remains murky as some prevalent economic challenges are yet to be addressed entirely.

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NBM outgoing chairperson Mathews Chikaonda told delegates to the AGM that while the operating environment in 2016 remained challenging, there is hope for an economic rebound this year.

He said as improvements in the 2016/17 season are expected to result into a rebound in Gross Domestic Product to 5.6 percent, there is also hope for an improved operating environment for businesses, especially those in the banking sector.

He, however, cautioned over the prevalent high cost of borrowing and power generation challenges rating them as main risks to the growth prospects.

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He also forewarned of challenges to meet tax revenue targets coupled with challenges emanating from continued drought in direct budget aid from development partners.

“The fiscal deficit is, therefore, expected to increase thereby applying more pressure on inflation, interest rates and economic growth prospects,” Chikaonda said.

In a separate interview, former NBM Chief Executive Officer, who was also confirmed as the bank’s new chairman, George Partridge concurred with his former boss saying, while the economy has taken a turn, there was need to address other prevailing challenges.

“In terms of the economic landscape, it seems we have reached a point whereby economic growth is likely to improve,” he said.

And in his report to the shareholders, Chikaonda announced a 29 percent growth in group pre-tax profit from K19.6 billion recorded in 2015 to K25.2 billion.

The profit jump translates into an increase in the amount of dividends to be given to shareholders as the bank declared final dividends of K3.80 billion, representing a total dividend payout K8.35 billion.

This is in respect of 2016 profits, representing K17.88 per share, having already paid a first interim dividend of K3.01 billion in 2016 and a second interim dividend of K1.54 billion on March 31 2017.

In 2016, NBM concluded the acquisition of Indebank to consolidate its position as Malawi’s biggest bank by assets.

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