Ever dreamed of owning a bank? Well, there is a golden opportunity now for you to own a stake in a bank by participating in the initial public offer (IPO) of FDH Bank which closes on July 17 2020.
FDH Bank—a subsidiary of the home-grown financial series group FDH Financial Holdings Limited—is offering 1 380 206 250 (that’s 1.3 billion) shares to you and me as well as institutional investors at K10 per share. The offer comprises 979 175 000 ordinary shares for sale and 401 031 250 shares for subscription.
Besides seeking to raise capital at a cheaper cost through listing and support the future growth of the bank, the arrangement is also meant to fulfill a contractual obligation with the Malawi Government as part of FDH Financial Holdings Limited’s acquisition of the then Malawi Savings Bank (MSB).
The offered stake represents 20 percent ownership in the bank. Currently, M Development Limited is the majority shareholder with 55 percent followed by Old Mutual (Malawi) Limited with 40 percent and FDH Esop Limited—a special investment vehicle to facilitate share ownership under Employee Share Ownership Scheme—holds five percent.
FDH Bank, licensed in 2007 by the Reserve Bank of Malawi, traces its roots to First Discount House (FDH) which was incorporated on March 8 2000 and commenced operations on April 8 2002 as a joint venture comprising Malawian business mogul Thomson Mpinganjira, Press Corporation Limited, Old Mutual Life Assurance (Malawi) Limited and Kingdom Financial Holdings Limited of Zimbabwe.
By 2012, the shareholding changed to the present status stated above.
FDH Financial Holdings Limited also owns FDH Money Bureau Limited and First Discount House Limited.
For a long time, many Malawians, especially those in formal employment and those doing business, depended on life insurance policies and savings accounts as avenues of saving. But economic liberalisation in the mid-1990s opened up alternative investment platforms such as shares on the stock exchange and related products.
Today, many Malawians own shares in big corporations through the Malawi Stock Exchange (MSE). There are 15 to date, including four commercial banks—National Bank of Malawi plc, Standard Bank plc, NBS Bank plc and FMBCapital Holdings Limited. The market also has Airtel Malawi plc and TNM plc in the telecommunications sector, Blantyre Hotels Limited and Sunbird Tourism plc in the hospitality industry. Financial services and investment conglomerate Nico Holdings plc was the first to list in 1996 and since then others that joined the fray are Illovo Sugar (Malawi) plc, Mpico plc, Icon Properties plc, Press Corporation plc, Old Mutual plc and National Investment Trust Limited.
The year 2020 will go down in history as one when the MSE recovered from a decade’s drought to have new listings.
In January, some 7 000 Malawians became shareholders of Airtel Malawi plc through the same platform as they bought shares in an IPO at K12.69 each.
Why invest in FDH Bank?
Following the acquisition of MSB, the home-grown commercial bank has emerged as one of the forces to reckon with in the country. It has embraced a technology-driven infrastructure and grown its physical footprint to enable customers transact easily and efficiently no matter where they are.
FDH Bank is committed to growth and providing customers with accessible banking services remains at the core of its focus.
FDH Bank has, over the years, registered growth in customer base, profits and assets. It is a venture worth putting one’s money in, especially at this time when most economic activity has stalled due to the impact of the coronavirus.
The offer is still open until July 17 2020 and you may get more details, including the prospectus and application forms from www.fdh.co.mw/investor. Alternatively, you can collect hard copies at all FDH Bank and Standard Bank service centres nationwide. FDH Bank is also offering loans for one to buy shares.
I am looking forward to seeing more Malawians owning a stake in FDH Bank when it lists on the MSE this August 3.
Warren Buffet said: “The first rule is never to lose money and the second rule is not to forget the first rule.”
It is time to explore more avenues of investment.
Remember: Do not put all your eggs in one basket. Spread the risk, as insurers like to put it.