(Agence Ecofin) – BOA Mali saw its net profit jump in the first half of 2024, reaching 4.8 billion FCFA, thanks to a 44% drop in the cost of risk and a moderate increase of 4% in net banking income, despite a context of inflation, rising resource costs and economic tensions.
Bank of Africa Mali (BOA Mali) posted a solid performance in the first half of 2024, driven by a significant reduction in its cost of risk, which caused its net profit to jump by 132% compared to the same period of the year. previous.
The net profit of the Malian subsidiary of the Moroccan group thus reached 4.8 billion FCFA (7.3 million dollars) as of June 30, 2024 compared to 2.1 billion FCFA at the end of June 2023, according to the half-yearly activity report published by the bank.
This strong increase is mainly explained by a 44% drop in the cost of risk, from 5.7 billion in 2023 to 3.2 billion FCFA this year, and banking activity which is holding up well. Reducing the cost of risk, often linked to better bad debt management and improved portfolio quality, has been a key driver of the bank’s profitability.
Cost control and a moderate increase in net banking income
The net banking income (NBI), which measures the income from the bank’s activities, increased by 4% over the period, to reach 18.2 billion FCFA. This modest growth is attributed to an improvement in margins and an increase in commissions, although the Malian economic environment remains marked by security tensions, a liquidity crisis and an increase in the cost of resources, which rose to 5.5% in weekly window of the BCEAO and at more than 6% at times on the interbank market.
« The Malian banking sector is facing a context of tightening liquidity and increasing cost of resources, but BOA Mali’s ability to generate additional revenue while reducing its risk charges demonstrates the solidity of its business model. », Confided a banking analyst.
However, this performance is attenuated by a slight increase in general expenses (+3%) – which include the bank’s operating costs – which reached 10.1 billion CFA francs. The bank has managed to limit this increase in a context where operational costs are increasing, partly due to inflation. This cost control allowed the bank to maintain stable operating profitability, with gross operating income (GRO) up 5% to 8.1 billion CFA francs.
However, if the lights are green, caution is still required. Despite this positive dynamic, the bank operates in a still fragile environment, with macroeconomic, budgetary and geopolitical challenges weighing on banking activity. According to financial analysts, the reduction in the cost of risk could continue to support BOA Mali’s profitability in the coming quarters, provided that asset quality remains under control and macroeconomic conditions do not deteriorate further.
Fiacre E. Kakpo
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