NBM completes TZ bank takeover
National Bank of Malawi (NBM) plc has completed the acquisition of a 60.48 percent stake in Akiba Commercial Bank of Tanzania.
The Malawi Stock Exchange-listed bank has established 18 service centres across Tanzania, bringing the bank’s service centres to 51. In Malawi, NBM plc has 33 service centres.
Speaking on the sidelines of the bank’s 50th Annual General Meeting in Blantyre on Friday, NBM plc newly-appointed board chairperson Jimmy Lipunga said negotiations are still ongoing to acquire a further stake to reach its intended 75 percent target.
He said: “NBM plc decided to acquire this bank in Tanzania when it was not performing well, which is what you do in acquisitions.
“But in the recent past, there have been significant improvements and we have no doubt that if this is sustained, the company will be profitable in the near future.”
In June last year, the Tanzania Fair Competition Commission cleared NBM to acquire a 75 percent stake in Akiba Commercial Bank.
The move came after NBM plc signed a share subscription agreement with the Tanzanian bank on January 31 2020.
Meanwhile, NBM plc has posted a 52 percent profit jump to K34.21 billion in the year ended December 31 2021 from K22.45 billion registered the year before.
This is despite the bank writing off loans totalling K9.5 billion, a worsened position from the previous year’s K4.5 billion.
Reads the bank’s annual report: “While the write downs were not directly due to the pandemic, the economic downturn exacerbated the customers default position.”
The bank says it is positive about the outlook in macro-economic environment following the 25 percent depreciation of the kwacha by the Reserve Bank of Malawi.
“By devaluing the kwacha, they are simply formalising something that was already there. The dollar was already trading at K1 100 and inventory in the market was priced on the basis of K1 100 exchange rate against the US dollar. And we hope that there won’t be any double counting,” said Lipunga.
He has taken over from George Partridge, who was the bank’s chairperson by virtue of being Press Corporation plc chief executive officer.
The bank has since approved a final dividend of K11 billion, translating to K23.56 per share.
Akiba Commercial Bank plc commenced banking operations in August 1997 as an initiative of over 300 Tanzanian entrepreneurs.
