FDH Bank Plc (Malawi) registers a Profit after tax (PAT) of K4.550 billion up from a PAT of K3.223 billion

By Published On: August 3rd, 2021Categories: Corporate announcement, Earnings

Hippo Valley Estates Limited (HIPO.zw) 2021 Abridged Report

The Directors present the unaudited consolidated and separate summarised financial statements of FDH Bank Plc for the half year ended 30 June 2021.

PERFORMANCE

The Bank registered a Profit after tax (PAT) of K4.550 billion up from a PAT of K3.223 billion achieved over a similar period in 2020. Net interest income has gone up by 70% on the back of the increase in the loan book & other interest bearing assets while Interest expense has gone up by 31% reflecting the growth of the Bank’s deposits. Non-interest income decreased by 18% manly due to the slowing down of business because of the Covid-19 pandemic. International trade and local business transaction volumes continue to be negatively affected by logistical challenges faced in the international supply chain as a result of lockdowns in trading partner countries. The increase in net interest income that was partly offset by the decrease in non-interest income resulted in total income growth of 19%.

Operating expenses grew by 6% when compared to the same period last year. The Bank continues to put more focus on effective cost management as we continue to bring down the cost to income ratio. Total assets increased by 30% from December 2020 mainly emanating from the increase in loan book by 22% and Government Securities by 70%. Notwithstanding the growth in the loan book, non-performing loans (NPL) ratio stood at 1.24% as at 30 June 2021. Customer deposits increased by 13% from K164 billion to K179 billion.

COVID-19 IMPACT

The 2021 Covid-19 pandemic had an effect on the half year performance as economic activities continued to be suppressed as a result of the second wave of infections. Most of the corporates and businesses continued operating at reduced capacity with the intention of maintaining social distance and suppressed consumer demand. Travel restrictions and lockdowns in trading partner countries slowed down most of the local businesses. This in turn slowed down the non-funded business growth as the number of customer transactions went down.

The expected credit losses also increased because of the increase in credit risk due to the slowing down of business activities and economic growth in general.

DIVIDEND

On 26 July 2021, the Directors approved an interim dividend of K2.3 billion in respect of 2021 half year profits representing 33t (K0.33) per share. The dividend will be paid on 27 August 2021 to members appearing in the register of the Company as at close of business on 13 August 2021.

OUTLOOK

Looking ahead, inflation is expected to remain in single digits averaging around 9.5% to the end of 2021 on account of declining food prices on the back of a good harvest. The Bank also anticipates the Kwacha/US Dollar exchange rate to average MK845/US$ in 2021 while the Malawi growth domestic product (GDP) growth is projected to average between 1.5% and 2% in 2021.

The Bank continues to implement the new cycle of strategic objectives running from 2021 to 2024, focusing on leveraging on our market position, widest distribution network, effective digital platform, brand equity, and strong financial performance. The Bank remains committed to creating value to our customers, shareholders and other stakeholders by focusing on growing revenue and market share, reducing operating cost for sustainable performance and profitability, creating highly engaged employees and contributing significantly to the creation of an inclusive, diverse and sustainable society.

APPRECIATION

We would like to thank all stakeholders of FDH Bank Plc, including our valued clients, the shareholders, the Government of Malawi, the Reserve Bank of Malawi, the Malawi Stock Exchange, correspondent banks and other business partners for rendering their support to the Bank resulting into a good half year performance.

By order of the Board.
FDH Bank Plc

Mrs. Charity Mseka                                                         Mr. George Chitera

Board Chairperson                                                  Acting Managing Director

Dr. Ulemu Katunga                                                            Mr. Richard Chipezaani
Chairperson, Finance and Audit Committee    Head of Finance