COVID-19, foreign exchange shortages hit Kwacha

By Nelson Gonjani

Standard Bank Malawi says the coronavirus (Covid-19|) pandemic and foreign exchange supply shortages are giving unnecessary pressure on Malawi’s currency, the Kwacha..

In summary results statement for the six months ended June 30, 202 signed by CEO Phillip Madinga, the Bank observes that the Kwacha continued to weaken against major currencies in the first half of the year on account of foreign currency supply shortages.   

“Foreign currency supply constraints will likely continue to exert pressure on the Kwacha. Inflation rate is therefore, being expected to remain elevated due to pressure on non- food inflation rate drivers since the recurring COVID-19 waves will likely going to have adverse impact on the economic performance,” reads the statement.

It, however, states that in the first half of the year, the group showed resilience in operating in the challenging environment.

The Bank’s total assets grew by 30% year on year due to the growth in loans and advances to customers and banks which grew by 25% and 80% respectively.

“The loan book growth resulted in a corresponding increase in interest income which also grew by 27% year on year while the growth in customer deposits of 29% year on year was a result of the group’s focus on growing its funding base which in turn supported its lending drive.’’

The Bank also registered strong growth on non-interest revenue which grew by 43% year on year.

It states that due to Covid-19 impact, customers were deeply affected to the extent that they failed to service loans.

The Bank’s profit after tax for the first half of the year was down by 8% year on year.

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