NBS Bank Limited 2018 Annual Report

We have extracted below the Chairman’s Statement from the 2018 annual report of NBS Bank Limited (NBS.mw), listed on the Malawi Stock Exchange:

This report details the required governance and regulatory assurances and disclosures. Further, it provides to the company’s members and stakeholders an overview of corporate governance framework in NBS Bank Plc (“the Bank”). The Directors have pleasure in submitting the consolidated and separate annual financial statements of the Bank and its subsidiary for the twelve months period ended 31 December 2018.

NATURE OF BUSINESS

NBS Bank Plc was registered as a financial institution under the Banking Act on 1 March 2004 and commenced Banking operations on 1 July 2004. The Bank was listed on the Malawi Stock Exchange in June 2007.

FINANCIAL PERFORMANCE

The Group registered a profit after tax of K1.699 billion compared to a loss after tax of K1.092 billion reported in a similar period in 2017. The profit is a result of the turnaround strategy the Bank has been implementing since 2017. The key financial performance indicators are as follows: Net interest income grew by 35% as a result of the increased investments in short-term placements with financial institutions. Non-interest income which is and forex trading income increased by 52% year- on-year. The Bank’s uptake on digital platforms continued to improve as investments were made to increase network availability and reliability. The forex business recorded growth of 75% largely as a result of increased volume of trade compared to the prior period. Recoveries of non-performing debt was flat. Operating expenditure was up 14% compared to the prior year largely due to investments changing the Bank projects. Current and savings accounts balances grew by 12% year on year and term deposits by 137% as customers continued to place their confidence in the Bank’s new strategy and investments in new online and branch infrastructure. Foreign currency deposits declined by 22%. Overall, the Bank’s total deposits grew by 29%. Total assets grew by 10% (K11 billion) due to the investment of the new deposits raised in the year under review. The Bank’s Tier 1 and Tier 2 capital ratios are required to be a minimum of 10% and 15% respectively. As at 31 December 2018, the Bank’s tier 1 and tier 2 capital ratios were at 15.53% and 15.45% respectively. At 31 December 2017, the Bank’s Tier 1 and Tier 2 capital ratios were at 10.79% and 18.37% respectively.

STRATEGY

The Bank’s strategic goals and objectives are to be a digitally- driven transactional Bank for both retail and corporate customers through a deeper understanding of their needs.in NBS Bank plc. The Board also has a company secretary who is a central source of guidance and advice to the Board and to the institution in general on matters of ethics and good governance.

SUBSEQUENT EVENTS

The details of subsequent events that have been identified are disclosed in note 37 in the financial statements.

ACKNOWLEDGEMENT

The Board expresses its gratitude to the Government of Malawi, Reserve Bank of Malawi, Registrar of Companies, Financial Intelligence Authority, Malawi Stock Exchange and other regulatory authorities for their valuable supervision and support. The Board also thanks financial Institutions and correspondent Banks for the good working relationship. The Board acknowledges the support of its customers, business associates and shareholders. Most importantly, the Board wishes to place on record its appreciation of all employees of NBS Bank for their dedicated service and contribution for the overall performance of the Bank. For and on behalf of the Board of Directors

Vizenge Kumwenda                                   Chifundo Chiundira

Chairman                                                                     Director