CDH Investment Bank registers a profit after tax of K23.534 billion in 2024 against 2023 performance of K11.141 billion

* The performance was backed by a strong growth in operating income of 76% while net interest income grew by 100% from K18.510 billion to K37.077 billion

* Non-interest income grew from K11.615 billion to K15.827 billion — representing a growth of 36%

By Duncan Mlanjira

In its summary financial statements for the year ended December 31, 2024, CDH Investment Bank has registered a profit after tax of K23.534 billion in 2024 against the prior year performance of K11.141 billion — representing an increase of 111%.

Endorsed by the bank’s Board chairperson, Franklin Kennedy; chairperson of the Board audit committee, Sydney Chikoti, Chief Executive Officer & Managing Director, Thoko Mkavea and Chief Finance Officer, Kelvin Mkulichi, the bank says “the performance was backed by a strong growth in operating income of 76% and that net interest income grew by 100% from K18.510 billion to K37.077 billion while non-interest income grew from K11.615 billion to K15.827 billion — representing a growth of 36%”.

“Operating expenses grew by 40% year on year. Notwithstanding the increase in expenses, the cost to income ratio decreased to 39% from 43% in the previous year.

“Total assets grew by 72% from K311 billion to K536 billion, backed by a 27% growth in customer deposits and 161% growth in investment funds. 

“Loans and advances grew by 28%. The bank continues to leverage on investment banking services to grow its commercial banking activities.”

On operating environment, the CDHIB takes cognizance that “Malawi faced a fragile domestic operating environment in 2024, dominated by prolonged foreign exchange shortages and persistent high inflation pressures, which averaged 32.2% for the year (up from 28.8% in 2023)”.

“Market interest rates went up as the Policy rate was increased from 24.0% to 26.0% and the Liquidity Reserve Requirement (LRR) ratio on domestic currency deposits was increased from 7.75% at the start of the year to 10.0% by year-end.

“Real GDP growth remained subdued, estimated at 1.8% for the year, slightly down from 1.9% in 2023, driven primarily by the El Niño weather conditions which severely affected agriculture production resulting into food insecurity, high inflation and elevated public debt levels.

“The Kwacha depreciated by 3% against the US$ in March 2024. The foreign exchange shortages resulted in a wide gap between the official and parallel foreign exchange rates, with the latter trading well over US$/MK: K3,000 by the end of the year.

“Officials reacted by tightening the foreign exchange regulations with regulatory authorities issuing new Exchange Control Regulations requiring public entities and Non-Governmental Organisations (NGOs) to transfer their foreign exchange denominated accounts from commercial banks to Reserve Bank of Malawi and mandated these entities to convert 80% and 70% of their foreign exchange immediately on receipt.”

The bank takes note that the Government projects the economy to grow by 4% in 2025, “mainly buoyed by improved food security, better export earnings, and investments mainly in agriculture, mining and tourism”.

“Inflation and interest rates are expected to stabilise at the current levels. However, these prospects could be blurred in the event of fiscal slippages as a result of increased Government spending and adverse weather-related shocks among other things.

“The outlook could also be dependent on the prospects of renewal of the IMF-supported ECF programme which could determine the rate of foreign currency flows to Malawi, affecting the importation of critical raw materials.

“In addition, increasing uncertainties in the global economy, which could have some repercussions for Malawi, mainly stemming from potential intensification of protectionist policies in the form of tariffs, which could worsen trade tensions and lower investment; geopolitical tensions in Europe and Africa; and scaling down of US aid to Malawi.”

The Board offered it vote of appreciation to all its valued clients; shareholders and its other stakeholders — Malawi Government; the Reserve Bank of Malawi; the media; banks and other business partners, “who supported the bank resulting in a good performance for the year ended December 31, 2024”.