NB: In this coverage report, we excluded FMBCH as it more of a regional bank and comparisons with purely Malawian banks would be misleading.
The Reserve Bank of Malawi (RBM) Financial Stability Report as of 30 June 2021, highlighted that the financial sector remained safe and sound, based on capital adequacy, liquidity, and growth in profitability. However, asset quality deteriorated marginally to 6.6% from 6.2% at December 2020.
In the six months, total assets rose 16% to MWK2,6trn. The growth was driven by a 31% increase in fixed income investments to MWK1.2trn while gross loans were up 12% to MWK809bln.
The growth in assets was funded by a 9% increase in deposits to MWK1.6trn and a surge in “repurchase assets” to MWK166bln. Customer deposits remained the largest source of funding, accounting for 70% of total liabilities, followed by repurchase agreements at 8%. This was at a time when broad money supply (M2) had grown 11% year-on-year.
Asset allocation remains skewed towards investments and ...
