Standard Bank Plc, listed on the Malawi Stock Exchange will today outline its 2023 performance to shareholders and other stakeholders after posting a K52.5 billion net profit, which one of the country’s financial analysts has described as “impressive”.
Reacting to the bank’s results, Lilongwe-based independent economist and transformational finance leader Thomson Nelson Kumwenda said they reflect impressive cost efficiencies, and Standard Bank’s deep understanding of risk management in respect to dealing with government securities.
“I see a very solid understanding and application of IFRS 9 by their Finance team. With expected credit losses heightened by 112%, year on year, they must have been prudent enough to have widened ECL coverage on lending to government and the probability of default and loss…” he said.
Kumwenda noted that Standard Bank has been prudent enough in its reporting and assumptions, considering that both World Bank and International Monetary Fund (IMF) have in recent years classified Malawi’s debt as unsustainable and carrying sovereign risk.
“Any internationally present bank will factor in the Debt Sustainability Analysis (DSA) into their PD [Probability of Default] and LGD [Loss Given Default] assumptions and apply appropriate hair-cuts on the government portfolio EAD [Exposure at Default],” he said.
This means the analyst is applauding Standard Bank for exercising prudence, and caution in its exposure to government borrowing, in view of the country’s DSA by World Bank and IMF.
Chief Executive Phillip Madinga and Chief Financial Officer John Mhone are expected to lead the bank’s country leadership committee in explaining the latest results during an investor conference scheduled from 9:30 am from the Bingu International Conference Centre (BICC) in Lilongwe.
The event will be hosted in hybrid format, with some key stakeholders joining virtually.
In its financial reports for the year ended December 31, 2023, Standard Bank said earnings from interest and other revenues drove net profit to MK52.5 billion, an increase by 34 percent over 2022.
“Net interest revenue grew 57% year on year driven by growth in both net interest income and non-interest revenue,” reads in part the report, co-signed by Madinga, Chairman of Board Chris Kapanga, and other directors of the bank’s board.