Standard Bank Malawi Limited 2018 Annual Report

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


Headline inflation averaged 9.2% in 2018 supported by moderate increase in food prices and to an extent a stable exchange rate. The Kwacha lost some ground against the United States dollar in the second half of the year driven by strong demand for foreign exchange against a slowdown in supply as the tobacco auction drew to an end. Interest rates remained stable for the greater part, supported by a single digit inflation rate environment.


The Group’s 2018 performance was negatively impacted by contraction of the revenue base. The revenue contracted as a result of drop in interest rates as well as drop in investments in financial assets. This was due to a drop in excess funding arising from a decline in customer deposits which were down by 12% year on year. Despite the decline in interest income, loans and advances to customers grew by 20% year on year. The Group’s profit after tax of MK10.6 billion was 13% below prior year due to drop in net interest income which was down 13% year on year. However, non interest revenue was 22% above the same period last year due to growth in transaction volumes in the transactional business. This increase cushioned the impact of the drop in interest income. Credit impairments were 21% below prior year due to decline of the non-performing loan book especially in the agriculture sector. The decline in credit impairments was due to the Group’s focus on robust credit risk management. The Group continues to place emphasis on recoveries of previously written off loans. operating costs grew by 5% year on year below average inflation for the year of 9.2% due to the Group’s focus on cost management. However, cost to income ratio was 63% compared to 59% in prior year due to a drop in revenues. Going into 2019, the Group will focus on diversifying its revenue base and will continue to focus on cost management. Earnings per share for the year decreased from MK52 in 2017 to MK45 in 2018.


We aspire to be the “undisputed number one financial services organisation in Malawi, delivering superior value to all stakeholders. We believe that we are more than a Bank and we have set to achieve high ambitions to reflect a GREAT company that we are. In order to achieve this, we will concentrate on Client Centricity where we promise to deliver value to our clients while embracing Digitisation with full recognition that the digital revolution is having a massive impact on how business is done in the financial services industry in order to truly offer Universal Financial Services (UFS). This means our business units, legal entities and corporate functions will work as an integrated whole to service our client’s financial needs in a seamless way. We understand as a Bank that we need to adapt quickly or risk losing relevance and client appeal, therefore we have welcomed digital revolution as one of our biggest opportunities.


Leadership skills development continued and will continue to be a major focus area for development. With the myriad of complexities and changes that exist in the banking industry today, the requirement for authentic, agile and visionary leaders is greater than ever before. Not only are leaders expected to perform and transform, but they are also required to empower, create meaning and direction, inspire and influence others. Our leadership programmes offered with support from the Global Leadership Centre (GLC) will endeavour to develop necessary skills and capabilities to drive innovations and efficiencies in order to embrace the changes today and for the future bank. To create the required shift and to have a competitive edge in business performance, robust development and training solutions and interventions will be put in place to equip, assess and support our leaders to lead and thrive today and remain relevant in future. This shift in leadership capability will be cascaded to impact all our people, at every level and across every function. We will continue to have meaningful engagement with our people to effectively achieve this.


The Group maintains high standards of corporate governance. Compliance with applicable legislations, codes, regulations and standards is an essential part of the Group’s operations. The Board monitors regulatory compliance through management reporting.


The Group expects macroeconomic stability could continue in 2019 supported by stable food prices and lower than prior year projected global oil prices. As a Group, we remain committed to ensuring customer satisfaction. In order to improve customer satisfaction and improve efficiencies, the Group implemented a new core banking system in 2017. With the new system in place, we will drive digitisation in order to improve customer experience. We will also focus on cost rationalisation, prudent management of risk and liquidity, diversify balance sheet and maintain a healthy capital position.


We would like to thank the executive team and the staff for the results delivered in 2018. We thank our customers for their continued support. We also thank our colleagues on the Board for their sound guidance and support during the year.

Dr. R Harawa                      Mr. W le Roux
Chairman                        Chief Executive