NATIONAL BANK OF MALAWI

SUMMARY OF UNAUDITED INTERIM RESULTS FOR THE PERIOD ENDED 30th JUNE 2013 GROUP 30-Jun-13 Unaudited K'm STATEMENTS OF COMPREHENSIVE INCOME Interest income Interest expense Net interest income Other income Net income Operating expenses Profit before recoveries on impaired loans and advances Net provisions on impaired loans and advances Profit before taxation Income tax expense Profit after tax Other comprehensive income (Losses)/gains on property valuations Deferred tax on previously revalued assets Other comprehensive income net of tax Total comprehensive income for the year Profit attributable to shareholders Equity holders of the company Non-controlling interest ( formerly minority interest) Comprehensive income attributable to shareholders Equity holders of the company Non-controlling interest 6,270 11 6,281 3,471 4 3,475 9,448 12 9,460 6,270 11 6,281 3,413 4 3,417 7,575 12 7,587 0 0 0 6,281 0 58 58 3,475 1,111 762 1,873 9,460 0 0 0 6,211 0 58 58 3,451 1,111 762 1,873 9,364 12,808 (2,522) 10,286 6,397 16,683 (7,328) 9,355 (119) 9,236 (2,955) 6,281 4,479 (645) 3,834 6,124 9,958 (4,864) 5,094 (203) 4,891 (1,474) 3,417 12,270 (2,407) 9,863 13,070 22,933 (11,321) 11,612 (607) 11,005 (3,418) 7,587 12,794 (2,522) 10,272 6,203 16,475 (7,237) 9,238 (119) 9,119 (2,908) 6,211 4,452 (645) 3,807 6,045 9,852 (4,809) 5,043 (203) 4,840 (1,447) 3,393 12,274 (2,408) 9,866 12,808 22,674 (11,177) 11,497 (607) 10,890 (3,399) 7,491 30-Jun-12 Unaudited K'm 31-Dec-12 Audited K'm 30-Jun-13 Unaudited K'm COMPANY 30-Jun-12 Unaudited K'm 31-Dec-12 Audited K'm

DIVIDENDS PAID Interim Final (for prior year) Total Earnings per share (Kwacha) Dividend per share (Kwacha) Number of ordinary shares in issue (millions) STATEMENTS OF FINANCIAL POSITION LIABILITIES & EQUITY Liabilities to customers Current income tax liabilities Other liabilities Loans and borrowings Equity attributable to equity holders of the parent company Non-controlling interest Total liabilities and equity ASSETS Cash and funds with Reserve Bank of Malawi Malawi Government Treasury Bills Reserve Bank of Malawi bill bonds Government of Malawi Local Registered Stocks Government of Malawi Promissory Notes Equity investments Investment in associate Investment in subsidiaries Placements with other banks Loans and advances to customers Other money market deposits Other assets Property, plant and equipment Intangible assets Deferred tax assets Total assets Memorandum items Contingent liabilities - guarantees STATEMENTS OF CHANGES IN EQUITY As at beginning of period Net profit for the period Dividends paid Other comprehensive income Deferred tax on disposed assets As at end of period STATEMENTS OF CASH FLOWS Cash flows from operating activities Profit before tax Adjustments for: Depreciation Fair value (gain)/loss on equity investments Profit on disposal of fixed assets 0 1,499 1,499 13.43 3.21 467 0 1,261 1,261 7.31 2.70 467 2,334 1,261 3,595 16.22 7.70 467 0 1,499 1,499 13.30 3.21 467 0 1,261 1,261 7.27 2.70 467 2,334 1,261 3,595 16.04 7.70 467

91,987 2,038 20,093 6,809 26,320 29 147,276

74,993 716 12,428 0 17,906 10 106,053

87,480 1,303 15,743 3,395 21,549 19 129,489

92,001 2,014 20,028 6,809 26,204 147,056

75,023 698 12,397 0 17,913 106,031

87,512 1,304 15,682 3,395 21,492 129,385

7,720 1,465 4,358 0 19,602 795 344 19,729 62,127 142 11,456 15,777 2,627 1,134 147,276

11,514 0 4,241 444 0 800 175 12,121 52,932 648 8,563 12,900 1,241 474 106,053

8,797 3,741 4,060 372 0 732 214 19,347 63,001 2,104 8,539 15,366 2,082 1,134 129,489

7,720 1,465 4,358 0 19,602 794 233 142 19,729 62,127 0 11,395 15,731 2,627 1,133 147,056

11,514 0 4,241 444 0 797 123 142 12,121 52,934 605 8,543 12,852 1,241 474 106,031

8,797 3,741 4,060 372 0 731 123 142 19,347 63,001 2,048 8,486 15,321 2,082 1,134 129,385

6,879

4,656

5,551

6,879

4,656

5,551

21,549 6,270 (1,499) 0 0 26,320

15,696 3,413 (1,261) 0 58 17,906

15,696 7,575 (3,595) 1,111 762 21,549

21,492 6,211 (1,499) 0 0 26,204

15,723 3,393 (1,261) 0 58 17,913

15,723 7,491 (3,595) 1,111 762 21,492

9,236 807 (52) (27)

4,891 644 (112) (559)

11,005 1,392 (76) (554)

9,119 801 (52) (27)

4,840 640 (112) (559)

10,890 1,383 (76) (554)

(Profit)/Loss on disposal of equity investments Dividends received Share of (profits)/loss of associate Impairment loss on property Increase in operating assets Increase in operating liabilities Cash generated from operating activities Tax paid Net cash from operating activities Net cash outflow from investing activities Net cash inflow from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period

1 (11) (29) 0 (2,057) 6,795 14,663 (2,196) 12,467 (19,101) 1,916 (4,718) 29,665 24,947

(5) (17) 13 0 (10,722) 13,433 7,566 (1,780) 5,786 3,229 (1,261) 7,754 15,043 22,797

(14) (51) (26) (838) (20,744) 30,137 20,231 (3,090) 17,141 (2,319) (200) 14,622 15,043 29,665

1 (11) 0 (2,034) 6,774 14,571 (2,196) 12,375 (19,095) 1,916 (4,804) 29,609 24,805

0 (17) 0 (10,707) 13,459 7,544 (1,779) 5,765 3,219 (1,261) 7,723 15,032 22,755

(8) (50) (838) (20,704) 30,134 20,177 (3,080) 17,097 (2,320) (200) 14,577 15,032 29,609

IMPAIRMENT LOSSES/NON PERFORMING CREDIT FACILITIES AND PROVISIONS FOR LOSSES BY INDUSTRY SECTOR 30th June 2013 Outstanding amount Impaired Amount K'm Agriculture, Forestry, Livestock and Fishing Manufacturing Mining and Quarying Construction and Engineering Energy/Electricity, Gas, Air conditioning, Water supply & Waste management Transport/Storage Communication Financial/Insurance/Professional/Scientific & Technical services Wholesale/Retail Individual/Households Real Estate Tourism Other TOTAL CREDIT CONCENTRATION Total Credit Facilities including guarantees, acceptances and other similar commitments extended to any one customer or group of related customers where amounts exceed 25% of core capital. 8,639 12,420 1,003 630 887 5,058 2,671 15,589 8,884 1,710 3,713 1,120 62,324 K'm 22 18 399 30th June 2012 Impaired Amount Specific Provision K'm 8,214 5,121 447 389 3,246 62 26 43 K'm 9 19 3

Sector

Specific Provision K'm 1 0.2 34

Outstanding Amount K'm

88 40 7 800 120 3 1 384 1,882

4 13 0.4 47 55 0 1 41 197

113

22

79 18,453 1,695 4,001 1,582 10,295 53,524

226 181 158 106 913

34 41 27 437 592

SECTOR OF BORROWER K'm

30th June 2013 % OF CORE CAPITAL 8,610 5,611 4,804 45% 29% 25%

K'm

30th June 2012 % OF CAPITAL 9,721 4,203

CORE

Wholesale/Retail Wholesale/Retail Other

68% 30%

LOANS TO DIRECTORS, SENIOR MANAGEMENT AND OTHER RELATED PARTIES 30th June 2013 K'm DIRECTORS: Balance at beginning of half year Loans granted during the half year Repayments Balance at end of half year OTHER RELATED PARTIES: Balance at beginning of half year Loans granted during the half year Repayments Balance at end of half year SENIOR MANAGEMENT OFFICIALS: Balance at beginning of year Loans granted during the year Repayments Balance at end of year 70 5 (37) 38 30th June 2012 K'm 44 8 (3) 49

5,935 5,515 (873) 10,577

2,423 49 (68) 2,404

115 11 (6) 120

79 13 (5) 87

INVESTMENTS IN SUBSIDIARIES Name of Subsidiary Percentage Holding 30th June 2013 30th June 2012 100% 100% 100% 100% 75% 100% 100% 100% 100% 75%

NBM Capital Markets Limited NBM Securities Limited National Bank of Malawi Nominees Limited NBM Bureau De Change Stockbrokers Malawi Limited LENDING RATES

30th June 2013 Malawi Kwacha facilities Base Lending Rate Lending Rate Spread Foreign Currency facilities 40.0% -3.5% to + 8.0% 7.0% to 12.0%

30th June 2012 20.5% -2.0% to +6.0% 7.0% to 9.0%

DIRECTORS REMUNERATION, BONUSES AND MANAGEMENT FEES 30th June 2013 K'm Directors Remuneration Total Bonuses Paid by the Bank 86 1,746 30th June 2012 K'm 56 438

DEPOSIT RATES 30th June 2013 Rate % 30th June 2012 Rate %

Type of Deposit Malawi Kwacha Current Account Savings Special savings Savings Bond 7 Day Call 30 Day Call 2 Months 3 Months 6 Months 9 Months 12 Months Foreign Currency Denominated Accounts (FCDAs) USD GBP ZAR EUR

1.00 11.00 5.00 20.00 12.00 15.00 19.00 20.00 25.00 Negotiable Negotiable Negotiable Negotiable

0.50 6.50 1.00 8.50 4.50 5.00 5.50 6.00 6.50

0.50 1.75 4.00 0.50

0.50 1.75 4.00 0.50

PERFORMANCE

The Board is pleased to announce a group pre-tax profit of K9.2b, compared with K4.9b earned during a similar period in 2012, representing an 89% increase. Profit after tax at K6.3b represents an incrase on 85% on 2012 performance. The operating environment in the first half of 2013 was fairly positive, signaling some modest economic recovery evidenced by increased capacity utilization in most sectors. This is in spite of liquidity challenges experienced in the banking industry as a direct result of the Reserve Banks continued tight monetary policy stance through moppingup operations and the maintenance of a high interest rate regime. This is consistent with demand management policies aimed at containing money supply, credit and inflation growth and exchange rate stabilization. In line with the improved capacity utilization of its clientele, the Bank registered satisfactory growth in almost all its business lines, notwithstanding liquidity challenges on the market . Both deposits and the loan books exceeded expectations. Year on year deposits grew by 23% while Loans registered 17% growth despite repayment of a significant portion of parastatal Government guaranteed loans through issuance of Malawi Government promissory notes. DIVIDEND The Board has resolved to pay an interim dividend amounting to K2 billion (2012 first interim: K1.1b) representing K4.28 per share (2012 first interim: K2.43 per share). The dividend will be paid on 13th September 2013 to members whose names appear on the register as at the close of business on 30th August, 2013 OUTLOOK Official estimates point to the rebounding of real GDP growth to 5% in 2013 from 1.8% recorded in 2012. This growth will mainly emanate from improvements in agriculture, manufacturing, construction and telecom sectors. The major downside risk to this growth estimate as we approach the general election due in May, 2014 remains the possibility of fiscal slippages and the accompanying adverse macroeconomic consequences.

Overall, inflation looks to have peaked and is now on a downward trend and so too are interest rates. It is therefore expected that interest rates will on average be lower in the second half than the closing rates of the first half although monetary policy is still expected to remain tight. The Bank is poised to continue with the good performance in the second half due to the envisaged sustained improvements in capacity utilization of clients businesses, leading to increased demand for lending and related products especially in the strategic growth areas of corporate and SME products.

of corporate and SME products. The Board is confident that the Bank is well positioned to sustain its profitability record and increase its market share through customer service improvements, product innovation,and efficiencies through cost containment in the context recovering market demand. The trend in the reported results is therefore expected to continue into the second half of the year.
BY ORDER OF THE BOARD

M. M. Kawawa, Chief Financial Officer and Director

G. B. Partridge, Chief Executive Officer and Director

M. A. P. Chikaonda Ph D, Chairman __________

25th July 2013 Registered Office: 7 Henderson Street, BLANTYRE