Four listed commercial banks are set to pocket a staggering K630 billion in profits in 2025—an 88 percent surge from K335 billion in 2024—laying bare a banking boom driven less by economic productivity and more by punishing interest rates and relentless lending to a cash-strapped government. The eye-watering figures, disclosed through trading statements, come at a time when ordinary Malawians are choking under high borrowing costs, shrinking incomes and a private sector starved of affordable credit. National Bank of Malawi (NBM) plc is projecting profits of up to K211 billion in 2025, more than double the K98 billion recorded the previous year.
FDH Bank plc expects profits to rise to K152 billion from K74 billion, while NBS Bank plc forecasts between K145.5 billion and K150.5 billion, up from K72.9 billion. Standard Bank plc completes the quartet with projected profits ranging between K112.3 billion and K120.9 billion, compared to K86.4 billion in 2024. Analysts say the numbers reflect a banking sector that has mastered how to thrive in economic distress.
The Reserve Bank of Malawi (RBM) Financial Stability Report for October 2025 shows that commercial banks remained solid through the third quarter, boasting strong capital positions, ample liquidity, improved asset quality and rising profitability. According to RBM, total industry assets grew by 15.6 percent to K8.5 trillion, while non-performing loans dropped to 5.1 percent—evidence that banks are making money with relatively low risk. “As such, the stability of the banking system significantly improved,” reads the report, noting that the Banking Stability Index rose to 0.72 from 0.58 in December 2024.
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But beneath the glossy indicators lies a troubling reality: banks are making their biggest money not by financing production, jobs or innovation, but by lending to government at exorbitant interest rates. Financial expert and stock market investor Benedict Nkhoma said the sector’s stellar performance is largely anchored on government borrowing in a high interest rate environment. “Banks have performed exceptionally well above inflation.
A key driver has been heavy investment in government securities,” he said, adding that the true test will be the breakdown of earnings once full results are published. Stock market investor Purity Chitaro echoed the sentiment, attributing the profit boom to strong loan growth, high interest rates and growing deposits. However, he noted that foreign exchange shortages, persistent inflation and ballooning public debt have crowded out private sector borrowing—limiting broader economic benefits.
Nico Capital Limited chief executive officer Misheck Esau warned that the profit model raises red flags for long-term development. “Yes, banks have created wealth for shareholders,” he said. “But it is worrying that most of these profits are coming from lending to government rather than supporting the real economy.”
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