National Bank of Malawi (NBM) plc has reported a significant increase in its profit-after-tax, reaching K101.71 billion for the year ending 2024. This represents a 41% growth from the K71.96 billion recorded in 2023.
The bank’s financial statement, signed by key executives including CEO Harold Jiya, Board Chairperson Jimmy Lipunga, Director Mcleod Nkhoma, and CFO Daniel Jere, attributes the impressive results to substantial growth in customer deposits. This surge in deposits has, in turn, fueled an increase in the loan book and fixed-income securities, driving the bank’s profitability.
“Net revenue rose by 46% due to growth in fees and commissions, as well as the consolidation of revenue from insurance operations of United General Insurance Company Limited (UGI), which became a subsidiary in 2024 following the Group’s increase in its stake from 47% to 57%. UGI thus transitioned from being an associate to a subsidiary company.
“Operating expenses increased by 52% largely due to high inflation in Malawi, consolidation of UGI’s operating expenses, and one-time staff rationalization costs at the Group’s subsidiary in Tanzania, Akiba Commercial Bank plc,” reads the statement in part.
Despite the growth, NBM notes that 2024 performance was dampened by challenges such as foreign currency scarcity and elevated interest rates. “The Group’s performance was negatively affected by a 75% increase in net impairment losses in Malawi and Tanzania.”
All NBM subsidiaries delivered profitable performances, boosting the Group’s results, with the notable exception of Akiba in Tanzania. The Tanzanian unit reported a K3.94 billion loss, primarily attributed to subdued revenue, staff restructuring expenses, and increased provisions for expected credit losses.
According to the Bank, headline inflation decreased from 33.4% in the first quarter to 29.2% in the fourth quarter.
“Interest rates were relatively stable, although still high, with the Reserve Bank of Malawi (RBM) maintaining a policy rate of 26% per annum from February 2024 to December 31, 2024. The Malawi Kwacha devalued by 3% against the US Dollar in March 2024, causing the official exchange rate per US Dollar to rise from K1,700 to K1,751,” reads the statement in part.
NBM plc forecasts a 3.2% economic growth rate in 2025, up from 1.8% in 2024, driven by expected normal to above-normal rainfall. The Bank has declared a K59.0 billion dividend for 2024, which represents K126.35 per share, marking a significant increase from the K102.80 per share paid in 2023.
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