REVIEW OF THE YEAR FOR THE BANK

The bank recorded substantial growth during the reporting period with total assets increasing by 47% and profitability increasing by 47%, up from MWK5.2Bn in 2016 to MWK7.6Bn in 2017. This was partially attributable to the acquisition of Opportunity International Bank of Malawi Limited (“OIBM”) in October 2017 and the merger with the Leasing and Finance Company of Malawi Limited (“LFC”) in December 2017.

Total operating income grew by 29% in 2017 supported by 18% and 46% growth in net interest income and non-interest income respectively. Growth in non-interest income was bolstered by gains of MWK2.3Bn on the bank’s listed investments. In contrast, 2017 was a difficult year for foreign exchange trading income which declined by 26% owing to compressed trading margins.

The bank continued to maintain a conservative balance sheet management strategy whereby gross loans and advances and money market investments grew by 6% and 68% respectively. Provisions for loans and advances increased from MWK404Mn in 2016 to MWK1.96Bn in 2017 primarily from the integration of OIBM.

The bank’s deposits grew by 65% from MWK78.5Bn to MWK129.7Bn through a combination of organic growth as well as the acquisition and merger of OIBM and LFC respectively. Low cost current and savings account deposits continued to have dominant share of total deposits.

Total expenses increased by 30% primarily from increases in staff and administrative costs as well as OIBM’s post acquisition operating expenses. The integration of OIBM and LFC operations was completed during the fourth quarter of 2017 and January 2018 respectively and should lead to further gains in operating efficiency in 2018.

By order of the Board