Committee wants govt to recapitalise MSB
The Budget and Finance Committee of Parliament has recommended that government should recapitalise Malawi Savings Bank (MSB) to enable it meet regulatory requirements on capital and liquidity that authorities once put at around K23 billion (US$5.1 million).
The recommendation comes as Capital Hill is reportedly in the final stages of wrapping up a deal to dilute its 100 percent shareholding in the bank, one of the country’s largest, which also boasts some of the widest network reach.
The committee’s stance is also on the back of The Nation’s Wednesday story revealing that the bank’s unofficial management accounts show that it posted K2.5 billion (US$5.6 million) in profits before tax between January and May 2015, a 221 percent increase from last year’s pre-tax profit of K773 million (US$1.8 million) over the same period.
The revelation prompted experts to urge government to revalue the bank’s price to get better value for its shareholders.
But MSB management yesterday indicated that people should not read too much into the figures, saying: The Nation’s story “was based on leaked information [that] had not been processed and approved by both the Executive Management and the Board. The Bank will shortly be publishing its half-year (2015) performance results and all stakeholders shall become informed accordingly”.
In his report to the House yesterday following its consultations in March this year, chairperson of the committee Rhino Chiphiko said they have found that if government helped the bank to collect money on its non-performing loans from politically exposed individuals and companies, it could be in a healthy financial position to be sold to the public through an initial public offering.
“Government should assist MSB board by forcing Mulli Brothers to pay back long outstanding debts and the courts should exercise their total independence and expedite the Mulli case,” said Chiphiko.
The committee accused the Public Private Partnership Commission, the Reserve Bank of Malawi and Capital Hill of using guess work to determine the value of the bank.
“The committee is concerned that the bank maybe sold for a song. The difference in information on the current value of the bank and amount required to take it back on its feet shows that no independent valuer has been engaged to determine the real value of the bank,” he said.
FDH Bank has offered to buy MSB for K4.9 billion (US$10.9 million), which is 75 percent of the government’s shares.
Minister of Finance Goodall Gondwe told The Nation on Wednesday that the report by the committee would be consolidated with that of the government’s own consultative forum.
This, said Gondwe, would be put before President Peter Mutharika who would make the final determination on the fate of the bank and its 600 employees spread across the country in its 34 agencies and 14 branches.
