National Bank of Malawi (NBM) made a profit of K19 billion in 2017.
This has been revealed in an audited summary report for the year ended 31 December, 2017.
According to the statement, the bank registered 15 percent increase in profit after tax from K16.6 billion in 2016 to K19.15 billion last year.
The bank has attributed the increase in profit to the continued decrease of inflation and a good agricultural harvests.
“The year started on a positive note with inflation continuing to trend downwards from 20 % in December 2016 to 7.1 % in December 2017. Consistent with inflation trend, the policy was reduced three times during the year and commercial banks responded by reducing their base lending rates.
“Agricultural production improved due to good weather and there was optimism for a rebound of economy,” said the bank.
However, the bank has complained about the unending blackouts saying they affected economic activity and led to low productivity.
The financial institution also noted that demand for goods and services was negatively affected by low buying power of farmers who failed to sell their agricultural commodities at good prices.
According to the bank, a maize export ban implemented by the President Peter Mutharika administration also had a negative impact on it income generating operations.
“The maize export ban accelerated the crash maize prices adversely affecting the ability of commodity traders to service debts with the bank,” the bank said.
National Bank observed that the developments resulted in reduced demand for certain bank products and worsened the Non-Performing Loans (NPL) portfolio which necessitated the bank to make a significant provision of K5.96 billion.
