{"id":11974,"date":"2015-11-13T09:11:58","date_gmt":"2015-11-13T09:11:58","guid":{"rendered":"http:\/\/www.times.mw\/?p=11974"},"modified":"2015-11-13T09:11:58","modified_gmt":"2015-11-13T09:11:58","slug":"banks-struggle-to-meet-regulatory-requirements","status":"publish","type":"post","link":"https:\/\/archive.times.mw\/index.php\/2015\/11\/13\/banks-struggle-to-meet-regulatory-requirements\/","title":{"rendered":"\u2018Banks struggle to meet regulatory requirements\u2019"},"content":{"rendered":"

F<\/strong>letcher & Evance, a local consulting firm, recently conducted a study on the Malawi banking industry which shows that some local banks are struggling to meet minimum regulatory requirements.<\/p>\n

The Malawi Bank Industry report 2014 is a compendium reports on examination of the performance of all commercial banks in the country.<\/p>\n

In the report, Fletcher & Evance analyses the eleven banks in Malawi in terms of assets, revenue, customer deposits, lending to other banks, borrowing from other banks and compliance to regulatory requirements among others.<\/p>\n

Out of the eleven banks analysed, four banks recorded losses before tax in the year to<\/p>\n

December 2014. Cumulatively, the top five banks in Malawi made a before tax profit of K56 billion.<\/p>\n

The report indicated that cumulative total income continues to grow and it reached K122 billion for the year to 31st December 2014 from the top 5 banks while loan impairments continue to steadily fall but the total non-performing loan portfolio is growing.<\/p>\n

The report indicates that the demand for capital continued to rise in 2014. Total loans and advances to other banks accumulated to over K103 billion and total loans and advances to customers was above K322 billion.<\/p>\n

Fletcher & Evans head of research and consulting, Handsome M\u2019bwana, said the bank-specific determinants for commercial bank\u2019s profitability in Malawi indicate that local banks are struggling to meet the minimum regulatory requirements.<\/p>\n

\u201cThere are clearly a lot of challenges in the Malawi banking industry in meeting operational and regulatory requirements\u201d said M\u2019bwana.<\/p>\n

The report indicates that mandatory capital ratios are low for most banking institutions, and maintaining these levels of capital equity has proved to be difficult.<\/p>\n

It further said most banks particularly the up and coming banks have been forced to raise new equity and are more likely to return to the equity market in the foreseeable future if they are to remain in compliance with the capital rules.<\/p>\n

\u201cThe need to rely on the equity market to meet regulatory capital requirements means that our banking institutions can no longer afford to be indifferent to the market performance of their shares,\u201d said M\u2019bwana.<\/p>\n

He said when the determinants of profitability of our banking industry are well observed and explored; the results will strengthen the foundations of the domestic financial system.<\/p>\n

\u201cCapital adequacy, credit risk and liquidity risk are among the main determinant of commercial bank\u2019s profitability in Malawi.<\/p>\n

This suggests that the quality of loan portfolio determines the profitability of banks,\u201d said M\u2019bwana.<\/p>\n

He said the banks have the ability to fulfill their obligations to the depositors as well as maintaining the required level of capital that would enable them to withstand credit, market and operational risks.<\/p>\n","protected":false},"excerpt":{"rendered":"

Fletcher & Evance, a local consulting firm, recently conducted a study on the Malawi banking industry which shows that some local banks are struggling to meet minimum regulatory requirements. The Malawi Bank Industry report 2014 is a compendium reports on examination of the performance of all commercial banks in the country. In the report, Fletcher […]<\/p>\n","protected":false},"author":3,"featured_media":11979,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-11974","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/posts\/11974","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/comments?post=11974"}],"version-history":[{"count":1,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/posts\/11974\/revisions"}],"predecessor-version":[{"id":11980,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/posts\/11974\/revisions\/11980"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/media\/11979"}],"wp:attachment":[{"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/media?parent=11974"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/categories?post=11974"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/tags?post=11974"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}