FDH Bank has said its merger with formerly government wholly-owned commercial bank, Malawi Savings Bank (MSB), is bearing fruits and has enhanced the bank’s service delivery.
The two banks merged mid this year to comply with the Banking Act of 2012 which prohibits dual control of commercial banks.
It also follows an approval by the Competition and Fair Trading Commission (CFTC) which established that the merger would not diminish competition in the banking sector.
The commission’s investigation found that the transaction may not likely result in substantial lessening of competition in the banking industry and foreign exchange trading markets; hence, the approval.
FDH Bank managing director Eric Ouattara said in an interview last week the merger will enable the bank to reach out to its customers with utmost convenience.
He said: “It has not been easy to carry out the integration, but we are pleased to report that the merger has been successful.
“We are proud with the way the merger has been undertaken, and now that we are at the end of it, we believe we will serve our customers better.”
Recently, FDH Bank upgraded its core banking system to T24 R14 from Temenos T24.
However, the merger of the two banks resulted in the retrenchment of 250 employees, a development Sobhuza Ngwenya, head of marketing of FDH Financial Holdings Limited, the parent company of FDH Bank, said was in line with operational requirements of fulfilling the bank’s contractual obligations with the Malawi Government in the sell and purchase agreement.
The financial services group bought 80 percent stake in MSB at K5.4 billion, which included five percent for the bank’s employees at K300 million.
The group also set aside K900 million for enhancing the bank’s IT platform and K3.2 billion was supposed to be for recapitalisation.
The whole transaction amounted to K9.5 billion.