Malawi’s commercial banks registered a total balance sheet growth of over 22 percent in the year 2011 despite the economic woes the country had been facing, a latest banking supervision report by Reserve Bank of Malawi (RBM) has shown.

The report, posted on the RBM website, indicates that in total—the sector registered a balance sheet of K371.9 billion, a 22.5 growth from K282.3 billion registered in the preceding year.

RBM attributes the growth mainly to a 31.1 percent growth in loans which went up to K148 billion in 2010 from K194 billion in 2011.

“Despite the economic slowdown, significant lending was extended by banks to the agriculture sector, financial services and government,” reads the report in part.

Loans and advances constituted 52.2 percent of the banks’ total assets, according to the report.

Growth was also recorded in deposits which, according to the report, increased to K279 billion from K206.4 billion in the previous year.

The asset structure also shows growth in cash, balances with RBM, securities and investments.

Financial market specialist Chikavu Nyirenda said the growth rate in bank assets is not surprising given the economic fundamentals that were at play in the year under review.

“The banks had substantial liquidity due to the forex situation,” said Nyirenda.

He said, however, he expects the sector to struggle this year on account of slowdown in loans owing to the high interest rates and ever rising inflation the country is experiencing.

“This year, the growth could not be significant enough as there will not be much borrowing in view of the high interest rates,” said Nyirenda.