Malawi Stock Exchange (MSE)-listed firms, mainly commercial banks, have posted good results for the half-year ended June 30, despite a subdued economic environment occasioned by the rise in commodity prices and high interest rates.
In separate published statements Standard Bank, FDH Bank and NBS Bank plc, indicated they posted higher profits in the first half of this year compared to the similar last.
Speaks on stocks: Chokani
A Standard Bank plc financial statement published recently shows that profits went up by 70 percent to K26.9 billion in the half year-ended June 30 2022, from K15.8 billion in the corresponding period in 2022.
Similarly, profitability of NBS Bank plc also grew by 136 percent to K12.16 billion in the half-year ended June 30, up from K5.09 billion, on account of what the bank on Monday linked to the growth in the loan book and money market investments.
FDH Bank, on the other hand, has posted a K15.014 billion after-tax-profit, up from a K8.707 billion achieved over a similar period in 2022.
Bridgepath Capital Limited chief executive officer Emmanuel Chokani observed that the profits have been buoyed by non-interest income but mostly government business.
Said Chokani: “High interest rate environment despite risks of credit impairment are leading to better bank performances and government securities yields which banks are investing in are also providing significant income.”
Weighing in, Malawi University of Business and Applied Sciences Betchani Tchereni also observed that banks are capitalising on the government’s huge deficit which is being financed by domestic borrowing mostly from banks.
He said: “The truth of the matter is that government borrowing is the biggest business for the commercial banks. When the government is borrowing a lot like it is now, commercial banks are assured of a ready market.”
Bankers Association of Malawi chief executive officer Lyness Nkungula is on record as having said that banks have better business risk management that has helped them to sail through even in the turbulent times.
“The diversification of products and technology helps to intensify the resilience to the tough economic situations,” she said.
Meanwhile, published trading statements from other sectors such as the telecoms, property, agriculture, manufacturing and other financial sectors are anticipating higher profits in the first half of this year.
Nico Holdings plc, for instance, has indicated its profit-after-tax for the half-year ended June 30 is expected to be between K27 billion and K30.5 billion compared to K11.8 billion reported for the half year ended 30 June 2022.
Similarly, Press Corporation plc has indicated that profit-after-tax for the period ended June 30 is expected to be higher than the previous corresponding period by a range of 100 percent to 105 percent to between K31.95 billion to K32.75 billion as compared to K15.98 billion for the previous corresponding period.
Malawi Stock Exchange (MSE) operations manager Kelline Kanyangala said this points to a positive outlook, saying the market remains positive despite significant downside risks mainly emanating from the macroeconomic environment.