The silent and oft forgotten victimof Covid-19is the life assurance business as revealed by the FY20 results from Old Mutual Limited (OML). The direct hitfrom the pandemicfor OML was R6.1 billion due to an increase in pandemic reserves, business interruption and rescue claims,and mark-to-market losses in the credit and private equity portfolios.Earnings from Nedbank were also lower.
African stock markets with a strong foreign investor component caught the global 24 February 2020 Covid-19 pandemic induced sell-off bug with an ensuing bear market that would extend for most of the second quarter. The pandemic was to remain a significant factor till the end of the year, with most markets finishing in the red, notwithstanding the tepid recovery that started in the third quarter.
Headlining the bank’s FY20 solid performance was a 30% growth in deposits to MWK315bln. The growth in customer balances exceeded the 21% registered by the entire banking sector, which closed FY20 at MWK1.4trn. The cost of these deposits for SBM was 2%pa, unchanged from the prior yearresulting in a debit in the income statement of MWK5bln in interest expenses.
The market was marginally bullish as it registered a positive month-on-month return on index of 0.06%(-1.08% in US$ terms), 13.19% on a year-on-year basis. It also, registered an increase in both total traded volume of shares and value during the month under review.
The market registered a positive return on index of 7.08% (2.21% in US$ terms) compared to 4.38% (3.41%in US$ terms) in 2019. It also recorded an increase in volume of shares traded despite registering a decrease in total value traded compared to the corresponding period 2019. On the primary Equity market, two companies, Airtel Malawi plc and FDH Bank plc got listed on 24 February 2020 and 03 August 2020, respectively. This brought the total number of listed companies to 16.
The banking sector composition remained at nine institutions, with the major highlightsbeing that there were neither bank failures nor any mergers. As well,no new licenses were issuedduring the year. However, there was a change in the management and branding at Nedbank Malawi Limited, which was acquired by MyBucks Banking Corporation.
