Financial House blames Malawi’s economic malaise on Russia-Ukraine war

By Saidi Winnes

First Discount House Limited (FDH) says it expects Malawi’s economic environment for 2022 to remain challenging throughout the year despite signs of global economic recovery from the effects of the Covid-19 pandemic.

In its summary financial statement for the year ended 31 December, 2022, the Financial House cites supply chain bottlenecks and an increase in commodity prices driven by the Russia-Ukraine war as major factors contributing to the challenging economic environment.

“The Russia-Ukraine war is likely to continue impacting the global prices of commodities, including crude oil, thereby significantly impacting on business activities and general economic growth in 2022,” the statement reads.

It says inflation in 2022 is anticipated to average 12.3%, with the local currency continuing to depreciate as a result of the negative trade balance, adding that the policy rate, which has gone up to 14% is expected to remain stable for the rest of the year while Gross Domestic Product (GDP) growth is projected to average around 4.1% in 2022.

First Discount House Limited made a profit after tax (PAT) of K3.83 billion for the year ended 31 December 2021 from K3.25 billion in 2020. The 18% increase in PAT was mainly due to increase in trading income on Government securities, which went up by 36%.

Total income increased by 22% to K7.33 billion in the year 2021 from K5.99 billion that was registered in the year 2020. Cost to income ratio has increased to 16% in the year 2021 from 14% in 2020.

The Discount House has therefore assured the public that it will continue implementing initiatives that ensure efficient and effective costs management.     

“The Discount House through prudent asset acquisition and strategic marketing of products is well positioned for significant asset growth,” reads the statement.

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