This study investigates the impact of Strategic Asset and Liability Management (SALM) on financial growth and profitability, using NBS Bank plc, Malawi as a case study. The research evaluates how effective asset allocation, liability structuring, and risk management strategies contribute to banking profitability, liquidity stability, and long-term financial sustainability. The study also examines how external factors such as economic conditions, regulatory requirements, and fintech competition influence banking performance.
A mixed-methods approach was employed, combining quantitative financial ratio analysis (Return on Assets, Return on Equity, Net Interest Margin, Loan-to-Deposit Ratio, and Capital Adequacy Ratio) with qualitative insights from structured interviews and employee surveys. The financial performance data spanning 2020 to 2023 was sourced from NBS Bank’s audited financial reports and regulatory disclosures from the Reserve Bank of Malawi. The qualitative data provided deeper insights into profitability drivers, liquidity management strategies, risk exposure, and competitive positioning.
The findings confirm that SALM practices have played a crucial role in improving financial performance at NBS Bank. ROA and ROE showed a steady increase over the four-year period, reflecting enhanced asset utilization and stronger shareholder returns. Net Interest Margin remained stable, reinforcing the importance of effective loan pricing and asset deployment strategies. Additionally, the bank successfully maintained a Loan-to-Deposit Ratio (LDR) of approximately 74%, ensuring liquidity stability while optimizing lending. However, challenges such as rising operational costs, credit risk exposure, and increased competition from digital financial services remain critical concerns that could affect long-term financial growth.
The study recommends that NBS Bank enhance revenue diversification, improve cost management, and strengthen credit risk assessment frameworks. Additionally, investing in digital banking innovations and forming strategic fintech partnerships will be key to maintaining competitiveness in Malawi’s evolving financial sector. This research contributes to the academic discourse on banking sector financial management and offers practical insights for policymakers, financial analysts, and banking professionals. Future research should expand on SALM practices in multiple banks across Sub-Saharan Africa to assess cross-industry applicability and long-term financial sustainability trends.
Book Title: Positive Impact of Strategic Asset and Liability Management on Financial Growth and Profitability: A Case Study of NBS Bank plc, Malawi
Authors Name: Yamikani Chimombo
ISBN: 978-93-92585-70-8
Year: 2025
Edition: First
Pages: 200
Format: eBook
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