Malawi Stock Exchange (MSE)—listed National Bank of Malawi (NBM), the designated preferred bidder to recapitalise Indebank Limited, has outlined plans on how it will run the financial insitution as a stand-alone entity.
NBM board chairperson Mathews Chikaonda said this on Friday in Blantyre on the sidelines of the bank’s 43rd annual general meeting (AGM).
He said NBM, which posted a profit-after tax of K14.5 billion in the year ending December 2014, a 14.3 percent increase compared to the previous year’s profit, will use its expertise to boost the profit base of Indebank and introduce products that are currently not being offered by the bank.
“Indebank published financial statements indicate that the bank has not done well mainly in retail banking, which is where we eye to enhance.
“We will, with our expertise in the sector, add on the skills so that in the end we can produce the same profits. We will also introduce tailor-made products to uplift the bank,” said Chikaonda.
He said the development will also be a platform for the country to finance development projects, a feat he described as new in the bank’s system.
Said Chikaonda: “We will put products in the bank different from those that we offer at NBM, mainly development financing activities, which we are not able to carry at the moment and are not available in private-owned banks.
“We will make use of the development arm in Indebank and we are optimistic that if it is run on the protocols of NBM, it will spell success to the small and medium enterprises [SMEs] because the development will finance projects of different sizes.”
He said currently, the deal lies in the hands of the Reserve Bank of Malawi (RBM), Ministry of Finance, Economic Planning and Development and Competition for Fair Trade Commission (CFTC) to review and approve the proposal contained in the bid.
Public Private Partnership Commission (PPPC) said the strategic equity investor, NBM will take up a shareholding of between 51 percent and 75 percent, but hinted that the actual allocation will depend on the level of capital subscription and negotiations.
Other requirements set by the PPPC for the bidder, among others, were to inject additional capital to satisfy the Basel II supervisory provision as required by RBM and demonstrate a commitment to address strategic and operational obligations, especially as they relate to information technology, marketing, product innovations, competitiveness and human resource retention training and development.
NBM was named the preferred bidder for the recapitalisation of Indebank after the evaluation of the best and final offers from two other conforming bids, FMB, another MSE-listed bank, and a consortium of Prudential Holdings Limited.
Before the designation of NBM as the preferred bidder in Indebank, government had 41.38 percent shareholding, Admarc Investment Holdings 25.65 percent, Press Trust 30 percent and Indebank employees owned 2.95 percent.