The Reserve Bank of Malawi has outlined in its 2019 Financial Institutions Supervision Report, that banks’ performance improved during the fiscal year ending in December 2019.

During the year in review, commercial banks bemoaned a tough business environment attributed to pre/post election unrest and the double downward revision of the policy rate. However, the report shows that banks’ total assets increased during the year due to an increase in loans and growth in investments though asset quality as measured by non-performing loans (NPLs) ratio remained subdued.

RBM Governor Dalitso Kabambe said that during the year in review, the banking sector was well-capitalised, liquid and profitable. “Riding on the stability of the macroeconomic environment, the sector’s performance was satisfactory as all institutions were generally sound and stable during the year.”

Having begun the year with the wave of coronavirus in Malawi,  the Monetary Policy Committee resolved to cut the Liquidity Reserve Requirement (LRR) on domestic deposits by 125 basis points to 3.75% from 5.0%, therefore increasing all commercial banks’ liquidity by K12 billion. Commercial banks are therefore expected to operate with ease in the next fiscal year, despite the spread of coronavirus in the country.