CDH Investment Bank has posted a K11.140 billion profit after tax for the financial year ending December 31, 2023, a published summary of audited results has shown. This represents a 48 percent jump in profit when compared to the K7.53 billion which the bank reported in 2022.
Among other things, customer deposits grew by 42 percent year on year while the bank’s loans and advances grew by 34 percent. Investment funds and financial assets grew by 42 percent and 40 percent respectively. These results were largely driven by growth in customer deposits and investment funds by 42% over prior year.
Consequently, net interest and net trading income grew by 39 percent and 35 percent, respectively, as indicated in the financial summary which was endorsed by the bank’s Board Chairperson Mr Franklin Kennedy, Chairperson of the Board Audit Committee Mr Elias Malion, Chief Executive Officer and Managing Director, Mr Thoko Mkavea and Chief Finance Officer, Mr Kelvin Mkulichi.
In addition, there was a 76 percent increase in non-interest revenue from K6.6 billion to K11.6 billion. Overall net revenue grew by 50 percent. During the period under review, the bank’s total assets grew by 42 percent from K219 billion to K311 billion.
The leading investment bank in Malawi continues to successfully leverage on its unique ability to integrate corporate finance and investment banking services with traditional commercial banking activities to deliver impressive value to its stakeholders generating an impressive return on shareholder’s equity of 40 percent.
The report further added that: “Notwithstanding the increase in expenses, the cost to income ratio went down to 43 percent from 45 percent in the prior year. The bank continues to run an efficient operation with focus on effective cost management as we continue to bring down the cost to income ratio”. The bank has since expressed optimism of further growth in both the investment banking and commercial banking activities, albeit, in a challenging business environment.”
Looking ahead, the local economic environment is expected to remain challenging in 2024 mainly fuelled by the continued foreign currency shortages from the widening trade deficit gap and a slow GDP growth.
The Government is projecting an increase in the real economic growth rate to 3.2 percent in 2024 and 4.0 percent in 2025, supported by an increase in public investment and recovery in various sectors of the economy, mainly to be driven by large-scale mega-farm output and anticipated high growth in construction, manufacturing, information and communication, and accommodation and food services.
The IMF Extended Credit Facility programme which was approved in November 2023, is anticipated to play a key role in improving foreign exchange inflows, supporting structural reforms, investor confidence and helping to stabilise economic conditions.
However, the positive outlook is clouded by the El Niño-induced weather conditions and a highly uncertain global economic and geopolitical environment. Annual inflation is anticipated to average 27.19 percent this year (2023: 27.75 percent), with the local currency continuing to depreciate against the major trading currencies as a result of a significant negative trade balance. Nevertheless, the Bank remains fully committed to identifying opportunities to help our stakeholders to grow with our continued offering of specialized and innovative financial services.
CDH Investment Bank will continue to implement the strategic objectives which focuses on people development, customer centricity and sustainable performance in its core revenue areas, while leveraging on its unique service proposition, corporate financial advisory and investment banking, investments in effective digital platforms and brand equity.
CDHIB is a leading investment bank in Malawi. It opened for business on 2nd April 2012 following the successful conversion from Continental Discount House Limited which had operated in the financial sector for 14 years since August 1998. CDH revolutionized trading of financial securities in Malawi, a legacy it continues to carry as it leads in the development of the capital market in Malawi.
CDHIB’s unique service proposition is investment banking and corporate financial advisory service to its clients. It is a deposit-taking investment bank out of which it makes loans and advances.