The Tanzania Fair Competition Commission (FCC) has cleared National Bank of Malawi (NBM) plc to acquire a 75 percent stake in Akiba Commercial Bank (ACB) of Tanzania, making it the first local bank to buy stake in a bank from the northern neighbour.
The move comes after NBM plc signed a share subscription agreement with ACB on January 31 2020.
NBM corporate affairs and marketing manager Akossa Hiwa confirmed in a written response yesterday that they have been cleared to acquire the shares with relevant processes being finalised before the official announcement.
She said: “We have currently received all the necessary approvals for the acquisition of Akiba Commercial Bank and we are attending to actions that have to be made before the acquisition may be considered completed.
“Additionally, when this process is finalised, NBM plc will make a formal announcement to all its stakeholders and the public.”
Meanwhile, a financial market analyst believes the acquisition of majority stake in ACB will enable the Malawi Stock Exchange (MSE)-listed bank to grow and improve its footprint across borders.
NBM will become the second MSE-listed bank to have a stake in regional banks after First Capital Bank which has stakes in banks in Botswana, Zimbabwe and Mozambique.
Reacting to the development, Centre for Financial Inclusion and Literacy Consultancy executive director Abel Mwenibanda in a written response yesterday said NBM plc has taken a move in the right direction.
He said this speaks volumes about the potential growth of the country’s economy and attainment of financial inclusion agenda.
Said Mwenibanda: “This gesture will help to facilitate trade between Malawi and Tanzania and beyond. It will enhance foreign investors’ confidence on the local economy.
“The deal will also assist in strengthening our banking systems, considering that National Bank is one of top banks in the country. In the same vein, there will also be a positive move on the Malawi Stock Exchange which is good news to investors.”
He appealed to NBM plc to consider coming up with products that are need-based and affordable if Malawians are to benefit from its success.
It is located in Dar es Salaam, Tanzania and is part of the Banks and Credit Unions Industry.
ACB has over 207 employees across all of its locations and generates $13.67 million (about K10 billion) in sales.
In 2016, the bank posted an after-tax profit of $3.68 about (K2.7 billion) million.
Last year, the bank posted a net profit of Sh1.2 billion (K396 million) and was targeting to double the profits this year to Sh2.5 billion (K800 million).
ACB is a full-fledged Tanzanian commercial bank providing banking, financial and other related commercial banking services.
ACB was established in 1997 by 300 Tanzanian entrepreneurs and had total assets of Sh155 billion (K51 billion), according to the latest bank’s audited annual report for 2018.