Standard Bank PLC | HER GROWTH |
RESULTS FOR THE SIX MONTHS ENDED 30 JUNE | |
OUR HOME | |
Unaudited Summary Consolidated And Separate Financial Statements |
SUMMARY STATEMENTS OF COMPREHENSIVE INCOME
In millions of Malawi Kwacha | Consolidated | Separate | |||||||||||
Unaudited | Audited | Unaudited | Audited | ||||||||||
Six | Six | Year | Six | Six | Year | ||||||||
months | months | ended | months | months | ended | ||||||||
to 30 June | to 30 June | 31 December | to 30 June | to 30 June | 31 December | ||||||||
2023 | 2022 | 2022 | 2023 | 2022 | 2022 | ||||||||
Interest income | 59,099 | 35,111 | 85,297 | 59,088 | 35,111 | 85,321 | |||||||
Interest expense | (5,274) | (3,630) | (8,645) | (5,311) | (3,662) | (8,719) | |||||||
Net interest income | 53,825 | 31,481 | 76,652 | 53,777 | 31,449 | 76,602 | |||||||
Non-interest revenue | 36,871 | 26,770 | 51,333 | 35,584 | 26,069 | 50,251 | |||||||
Total income | 90,696 | 58,251 | 127,985 | 89,361 | 57,518 | 126,853 | |||||||
Credit impairment charges | (8,143) | (4,055) | (7,122) | (8,145) | (4,055) | (7,122) | |||||||
Income after credit impairment charges | 82,553 | 54,196 | 120,863 | 81,216 | 53,463 | 119,731 | |||||||
Operating expenses | (33,526) | (29,039) | (60,807) | (33,482) | (29,022) | (60,752) | |||||||
Profit before taxation | 49,027 | 25,157 | 60,056 | 47,734 | 24,441 | 58,979 | |||||||
Taxation | (22,105) | (9,322) | (20,854) | (21,728) | (9,117) | (20,231) | |||||||
Profit after tax | 26,922 | 15,835 | 39,202 | 26,006 | 15,324 | 38,748 | |||||||
Other comprehensive Income | |||||||||||||
Net revaluation movement on property and equipment | (838) | - | 1,719 | (838) | - | 1,719 | |||||||
Net change in fair value of financial assets at fair value | |||||||||||||
through other comprehensive income (OCI) | (46) | 153 | 72 | (46) | 153 | 72 | |||||||
Total comprehensive income | 26,038 | 15,988 | 40,993 | 25,122 | 15,477 | 40,539 | |||||||
SUMMARY STATEMENTS OF CHANGES IN EQUITY
In millions of Malawi Kwacha | Consolidated | Separate | |||||||||||
Unaudited | Audited | Unaudited | Audited | ||||||||||
Six | Six | Year | Six | Six | Year | ||||||||
months | months | ended | months | months | ended | ||||||||
to 30 June | to 30 June | 31 December | to 30 June | to 30 June | 31 December | ||||||||
2023 | 2022 | 2022 | 2023 | 2022 | 2022 | ||||||||
Opening equity | 148,052 | 117,059 | 117,059 | 143,432 | 112,893 | 112,893 | |||||||
Profit for the period | 26,922 | 15,835 | 39,202 | 26,006 | 15,324 | 38,748 | |||||||
Dividends declared and paid | (12,000) | (7,001) | (10,000) | (12,000) | (7,001) | (10,000) | |||||||
Net revaluation movement on property and equipment | (838) | - | 1,719 | (838) | - | 1,719 | |||||||
Movement in other reserves | 293 | 205 | 72 | 293 | 206 | 72 | |||||||
Closing equity | 162,429 | 126,098 | 148,052 | 156,893 | 121,422 | 143,432 | |||||||
Basic earnings per share (MK per share) | 115.05 | 67.57 | 167.53 | 111.14 | 65.39 | 165.59 | |||||||
Dividend per share (tambala) | 5,128 | 2,992 | 4,273 | 5,128 | 2,992 | 4,273 | |||||||
Number of ordinary shares in issue (million) | 234 | 234 | 234 | 234 | 234 | 234 | |||||||
Market price per share (MK) | 2,350 | 1,600 | 2,000 | 2,350 | 1,600 | 2,000 | |||||||
SUMMARY STATEMENTS OF FINANCIAL POSITION
In millions of Malawi Kwacha | Consolidated | Separate | ||||||||||||
Unaudited | Audited | Unaudited | Audited | |||||||||||
As at | As at | As at | As at | As at | As at | |||||||||
30 June | 30 June | 31 December | 30 June | 30 June | 31 December | |||||||||
2023 | 2022 | 2022 | 2023 | 2022 | 2022 | |||||||||
ASSETS | ||||||||||||||
Cash and balances held with the Central Bank | 51,849 | 38,762 | 56,385 | 51,650 | 38,703 | 56,199 | ||||||||
Non-current assets held for sale | 104 | 612 | 584 | 104 | 612 | 584 | ||||||||
Trading assets and derivatives | 42,453 | 7,042 | 1,587 | 42,453 | 7,042 | 1,587 | ||||||||
Financial Investments | 359,409 | 278,948 | 352,645 | 359,409 | 278,948 | 352,645 | ||||||||
Loans and advances to banks | 169,747 | 111,596 | 131,454 | 169,670 | 111,557 | 131,189 | ||||||||
Loans and advances to customers | 274,695 | 218,821 | 235,845 | 274,695 | 218,821 | 235,845 | ||||||||
Investment in Subsidiaries | - | - | - | 100 | 100 | 100 | ||||||||
Other assets | 20,544 | 11,755 | 14,962 | 20,661 | 11,793 | 15,002 | ||||||||
Property, equipment and right-of-use assets | 24,818 | 18,445 | 21,907 | 24,818 | 18,445 | 21,907 | ||||||||
Intangible assets | 13,223 | 14,736 | 13,979 | 13,223 | 14,736 | 13,979 | ||||||||
Deferred tax asset | - | 2 | - | - | - | - | ||||||||
Total assets | 956,842 | 700,719 | 829,348 | 956,783 | 700,757 | 829,037 | ||||||||
SUMMARY STATEMENTS OF FINANCIAL POSITION (CONTINUED)
In millions of Malawi Kwacha | Consolidated | Separate | |||||||||||||||
Unaudited | Audited | Unaudited | Audited | ||||||||||||||
As at | As at | As at | As at | As at | As at | ||||||||||||
30 June | 30 June | 31 December | 30 June | 30 June | 31 December | ||||||||||||
EQUITY AND LIABILITIES | |||||||||||||||||
2023 | 2022 | 2022 | 2023 | 2022 | 2022 | ||||||||||||
Equity | |||||||||||||||||
Issued capital | 234 | 234 | 234 | 234 | 234 | 234 | |||||||||||
Share premium | 8,492 | 8,492 | 8,492 | 8,492 | 8,492 | 8,492 | |||||||||||
Retained earnings | 141,764 | 106,135 | 126,503 | 136,228 | 101,457 | 121,883 | |||||||||||
Other reserves | 11,939 | 11,237 | 12,823 | 11,939 | 11,239 | 12,823 | |||||||||||
Total equity | 162,429 | 126,098 | 148,052 | 156,893 | 121,422 | 143,432 | |||||||||||
Liabilities | |||||||||||||||||
Deposits and loans from banks | 17,498 | 28,179 | 20,962 | 17,498 | 28,179 | 20,962 | |||||||||||
Deposits from customers | 692,562 | 492,554 | 593,006 | 698,207 | 497,408 | 597,753 | |||||||||||
Derivative liabilities | 246 | 316 | 218 | 246 | 316 | 218 | |||||||||||
Other liabilities and provisions | 56,628 | 39,882 | 48,403 | 56,658 | 39,888 | 48,398 | |||||||||||
Income tax payable | 17,317 | 8,236 | 10,565 | 17,119 | 8,090 | 10,133 | |||||||||||
Deferred tax liabilities | 10,162 | 5,454 | 8,142 | 10,162 | 5,454 | 8,141 | |||||||||||
Total liabilities | 794,413 | 574,621 | 681,296 | 799,890 | 579,335 | 685,605 | |||||||||||
Total equity and liabilities | 956,842 | 700,719 | 829,348 | 956,783 | 700,757 | 829,037 | |||||||||||
O balance sheet items | |||||||||||||||||
Letters of credit and guarantees | 130,905 | 170,721 | 136,482 | 130,905 | 170,721 | 136,482 | |||||||||||
Undrawn commitments | 76,027 | 31,650 | 26,945 | 76,027 | 31,650 | 26,945 | |||||||||||
Foreign exchange contracts | 58,614 | 8,823 | 38,168 | 58,614 | 8,823 | 38,168 | |||||||||||
SUMMARY STATEMENTS OF CASH FLOWS
In millions of Malawi Kwacha | Consolidated | Separate | |||||||||||||
Unaudited | Audited | Unaudited | Audited | ||||||||||||
Six | Six | Year | Six | Six | Year | ||||||||||
months | months | ended | months | months | ended | ||||||||||
to 30 June | to 30 June | 31 December | to 30 June | to 30 June | 31 December | ||||||||||
Cash ows from operating activities | 2023 | 2022 | 2022 | 2023 | 2022 | 2022 | |||||||||
Prot before income tax expense | 49,027 | 25,157 | 60,056 | 47,734 | 24,441 | 58,979 | |||||||||
Adjustment for non-cash items included within | |||||||||||||||
the income statement | (43,504) | (25,029) | (66,244) | (43,456) | (24,990) | (67,194) | |||||||||
Net increase in operating assets/liabilities | (36,653) | (15,944) | (15,335) | (35,967) | (15,373) | (14,658) | |||||||||
Interest paid | (5,371) | (4,172) | (9,036) | (5,408) | (4,204) | (9,110) | |||||||||
Interest received | 54,285 | 33,848 | 73,440 | 54,274 | 33,848 | 73,464 | |||||||||
Dividends received | - | - | - | - | - | 1,000 | |||||||||
Income taxes paid | (14,062) | (8,901) | (16,054) | (13,468) | (8,757) | (15,775) | |||||||||
Net cash generated from operating activities | 3,722 | 4,959 | 26,827 | 3,709 | 4,965 | 26,706 | |||||||||
Cash ows from investing activities | |||||||||||||||
Purchase of property and equipment | (4,021) | (1,221) | (3,593) | (4,021) | (1,221) | (3,593) | |||||||||
Sale of property and equipment | 15 | 196 | 253 | 15 | 196 | 253 | |||||||||
Net cash used in investing activities | (4,006) | (1,025) | (3,340) | (4,006) | (1,025) | (3,340) | |||||||||
Cash ows from nancing activities | |||||||||||||||
Principal lease repayments | (314) | (187) | (319) | (314) | (187) | (319) | |||||||||
Dividends paid | (3,938) | (6,392) | (8,190) | (3,938) | (6,392) | (8,190) | |||||||||
Net cash used in nancing activities | (4,252) | (6,579) | (8,509) | (4,252) | (6,579) | (8,509) | |||||||||
Net (decrease)/increase in cash and cash equivalents | (4,536) | (2,645) | 14,978 | (4,549) | (2,639) | 14,857 | |||||||||
Cash and cash equivalents at beginning of period | 56,385 | 41,407 | 41,407 | 56,199 | 41,342 | 41,342 | |||||||||
Cash and cash equivalents at end of period | 51,849 | 38,762 | 56,385 | 51,650 | 38,703 | 56,199 | |||||||||
NOTES TO THE SUMMARY CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
Impairment losses/Non-performing credit facilities and provisions for losses by Industry sector
As at 30 June 2023 | As at 30 June 2022 | |||||||
Impaired | Stage 3 | Stage 3 | ||||||
Outstanding | expected | Outstanding | Impaired | expected | ||||
Amount | amount | credit losses | Amount | amount | credit losses | |||
MKm | MKm | MKm | MKm | MKm | MKm | |||
Agriculture | 85,585 | 65 | 57 | 57,397 | 149 | 136 | ||
Manufacturing | 7,198 | 173 | 68 | 10,820 | - | - | ||
Mining | 1 | - | - | - | - | - | ||
Construction | 7,501 | 389 | 302 | 4,744 | 183 | 142 | ||
Energy/Electricity | 5,083 | 108 | 73 | 6,046 | - | - | ||
Gas/Water | - | - | - | - | - | - | ||
Transport/Communication | 37,333 | 288 | 195 | 24,346 | 123 | 92 | ||
Financial Services | 482 | 53 | 53 | 770 | - | - | ||
Wholesale/Retail | 30,550 | 1,523 | 979 | 30,856 | 442 | 383 | ||
Individual/Household/Community | 111,608 | 6,835 | 5,541 | 90,418 | 4,787 | 4,206 | ||
Real Estate | 5,234 | 40 | 25 | 3,917 | - | - | ||
Tourism | 286 | 1 | 1 | 2,363 | - | - | ||
Total | 290,861 | 9,475 | 7,294 | 231,677 | 5,684 | 4,959 |
Credit concentrations
Total credit facilities including guarantees, acceptances and other similar commitments extended to any one customer or group of related customers where amounts exceed 25% of our core capital.
Sector of borrower | As at 30 June 2023 | % of Core Capital | As at 30 June 2022 | % of Core Capital | |||||
MKm | MKm | ||||||||
Transport/Communication/Storage | - | - | 34,931 | 34.60% | |||||
Various | 34,253 | 27.75% | - | - | |||||
Loans to directors, senior management and other related parties | |||||||||
30 June 2023 | 30 June 2022 | ||||||||
MKm | MKm | ||||||||
Directors | |||||||||
Balance at the beginning of the year | 162 | 182 | |||||||
Loans granted during the year | 7 | 1 | |||||||
Repayments | (9) | (9) | |||||||
Balance at the end of half year | 160 | 174 | |||||||
30 June 2023 | 30 June 2022 | ||||||||
MKm | MKm | ||||||||
Other related parties | |||||||||
Balance at the beginning of the year | 76 | 27 | |||||||
Loans granted during the year | 3,496 | 64 | |||||||
Repayments | (4) | (11) | |||||||
Balance at the end of half year | 3,568 | 80 | |||||||
30 June 2023 | 30 June 2022 | ||||||||
MKm | MKm | ||||||||
Senior management ocials | |||||||||
Balance at the beginning of the year | 1,497 | 1,203 | |||||||
Loans granted during the year | 368 | 331 | |||||||
Repayments | (282) | (158) | |||||||
Balance at the end of half year | 1,583 | 1,376 | |||||||
Total loans to directors, senior management and other related parties | 5,311 | 1,630 | |||||||
Total loans to directors, senior management and other related parties as | |||||||||
a percentage of core capital | 4% | 1% | |||||||
Investment in subsidiaries | |||||||||
Name of subsidiary | Number of shares | Percentage holding | Current year | Previous year | |||||
MKm | MKm | ||||||||
Standard Bank Bureau De Change Limited | 99,999,999 | 100% | 100 | 100 | |||||
Standard Bank Nominees Limited | 19,999 | 100% | - | - | |||||
Lending rates | |||||||||
As at 30 June 2023 | As at 30 June 2022 | ||||||||
Base lending rate (local currency) | 21.0% | 13.8% | |||||||
Maximum applicable range (percentage points) | 11 | 11 | |||||||
Lending rates (foreign currency loans) | 3.9% - 14.6% | 3.8% - 12.9% | |||||||
Reserve Bank of Malawi Policy rate | 22.0% | 14.0% | |||||||
Director's remuneration, bonuses and franchise fees | |||||||||
30 June 2023 | 30 June 2022 | ||||||||
MKm | MKm | ||||||||
Director's remuneration | |||||||||
- Directors' fees and expenses | 139 | 72 | |||||||
- Executive directors' remuneration | 272 | 225 | |||||||
Total bonuses paid to all staff (relating to prior year provision) | 3,178 | 2,303 | |||||||
Franchise fees to holding company | 2,671 | 1,732 | |||||||
Deposit rates | |||||||||
Type of deposit | 30 June 2023 | 30 June 2022 | |||||||
Rate | Rate | ||||||||
Malawi Kwacha | |||||||||
Current account | 0% | 0% | |||||||
Call | 2% | 3% | |||||||
Notice | 3.5% | 3.5% | |||||||
Savings | 3% | 4% | |||||||
Pure save | 4% | 6.5% | |||||||
Contract save | 5% - 8% | 6%-8% | |||||||
1 month Fixed | 4% | 4.5% | |||||||
2 months fixed | 4.5% | 5.5% | |||||||
3 months fixed | 5% | 6.5% | |||||||
More than 3 months | Negotiable | Negotiable | |||||||
Foreign currency denominated accounts (FCDAs) | |||||||||
USD | 0.37% | 0.37% | |||||||
GBP | 0.10% | 0.10% | |||||||
EUR | 0% | 0% | |||||||
ZAR | 0% | 0% | |||||||
Additional disclosures on Risk and Capital Management can be accessed on the Bank's website http: www.standardbank.co.mw.
Standard Bank PLC is licensed and regulated by the Reserve Bank of Malawi
Standard Bank PLC
RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2023
Unaudited Summary Consolidated And Separate Financial Statements
FINANCIAL REVIEW
We present the unaudited financial results of the Group for the six months ended 30 June 2023.
Economic highlights
Foreign exchange demand and supply imbalances persisted in the first half of the year, resulting into a 2.36% cumulative depreciation of the Kwacha by the close of June. As a result, the Kwacha closed the first half at MK1,058.8 against the United States dollar compared to MK1,033.4 at the end of June 2022. Cost pressures on food, utilities tariffs and the weak local currency weighed significantly on headline inflation which closed the period at 27.3% from 23.5% in June 2022. Consequently, the Policy rate was raised from 18% to 22% in April 2023, which triggered increases in the Reference rate and commercial banks Base lending rates. In addition, the liquidity reserve requirement (LRR) for local currency deposits was adjusted upwards from 3.75% to 5.75%.
Performance
The Group's results demonstrated its resilience as it continued to operate in a challenging environment characterized by foreign currency demand and supply imbalances and inflationary pressures. Despite the underlying challenges, the Group grew its revenues, managed costs growth below inflationary levels and grew its balance sheet supported by a strong funding base which in turn resulted in higher profitability.
The Group's profit after tax of MK26.9 billion was 70% above prior year. Total revenue grew by 56% year on year driven by growth in both net interest income and non-interest revenue. Net interest income grew by 71% year on year driven by growth in loans and advances to customers and financial investments which both grew by 26% and 29% year on year respectively. The growth in interest earning assets was as a result of growth in deposits from customers which also grew by 41% year on year.
Non-interest revenue grew by 38% year on year. Net fees and commissions grew by 20% year on year driven by increase in transaction volumes despite reduction in pricing of selected fees and commissions. Trading revenue grew by 51% year on year anchored by an increase in trading volumes.
Credit impairments were significantly up on prior year due to growth in the performing customer loan book as well as financial investments which resulted in increase of performing related credit impairments. In addition, credit impairments also grew as a result of deteriorating macroeconomic factors which led to increase in forward looking credit impairment charges as well as downgrades on some non-performing customer loan balances. The Group will continue its efforts to recover previously written off loans as well as focus on prudent risk taking and management.
Operating costs were 15% up on prior year impacted by increase in prices of goods and services as well as increase in staff costs emanating from annual remuneration adjustment. The Group's continued focus on cost and process optimisation initiatives led to a lower than inflation cost growth. As a result of higher revenue base and lower cost growth, the cost to income ratio reduced from 50% in prior year to 37% in the current year.
Earnings per share for the half year increased from MK67.57 in 2022 to MK115.05 in 2023.
Outlook
The operating environment is expected to remain challenging in the second half of the year given the persistent inflationary pressures emanating from high food prices, utility tariff increases and tight foreign exchange supply conditions. A new Extended Credit Facility programme with the International Monetary Fund before the end of the year could bring about currency stability and foster business confidence.
Dividend
The directors resolved not to pay an interim dividend for the half year ended 30 June 2023. In arriving at this decision, the directors have considered the expected continued currency depreciation emanating from the foreign exchange auctions and the deteriorating macroeconomic factors which will trigger further forward looking credit impairment charges. The directors will continue to review the prevailing and expected market conditions and declare a dividend once macroeconomic conditions improve. A first interim dividend of MK21.31 per ordinary share representing MK5 billion was paid in prior year.
By order of the Board.
NAME | DESIGNATION | SIGNATURE | DATE | |
1. | C Kapanga | Chairperson | 04 August 2023 | |
2. | A Mkandawire | Director | 04 August 2023 | |
3. | P Madinga | Chief Executive | 04 August 2023 | |
4. | J Mhone | Chief Financial and | 04 August 2023 | |
Standard Bank PLC is licensed and regulated by the Reserve Bank of Malawi
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Standard Bank Limited published this content on 17 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 August 2023 11:01:08 UTC.