As anxiety continue to grow for possible job cuts at Malawi Savings Bank (MSB) following its acquisition to FDH Financial Holdings Limited on Thursday, the new managers jettison such fears. FDH is into serious banking expansion requiring more workers.
On Thursday, Minister of Finance Goodall Gondwe Malawi Government signed the sale of Malawi Savings Bank (MSB) on behalf of Malawi Government while Dr. Thom Mpinganjira signed on behalf of FDH Holdings.
The sale of the bank has been described by many Malawians as unfortunate great loss of national treasure and that Malawians will face more negative repercusions will follow soon.
Thomson Mpinganjira CEO FDH Financial Holdings has cast out fears that the acquisition of the Malawi Savings Bank will lead to retrenchment of workers and closure of MSB branches.
But FDH CEO says there should be no worries. He says they are plans to expand their presence in the country and not shrink MSB and that ‘no one will be fired’
“Out of K5.4 billion cash that we are going to pay the Government (this week), K300 million of that we are buying shares for the employees of the bank” said Mpinganjira
“We have got vast network and we looked at how we can expand; We can expand by growing slowly 50 years, or acquisition. So we decided to go for acquisition.” He added, "this acquisition will put us on third position in banking" said Mpinganjira who could not remember their current position in Malawi.
“After this acquisition we are going to become Bank number three. But our plan is to move further beyond number 3 or number 2. And then we will see what happens after 10 years. But for us to realize our plans to grow to even number 1, it means that we cannot start closing down branches or retrenching, because what network are we going to use to grow.” he explained
Speaking of plans for the MSB he said FDH Financial Holdings Limited would like to use MSB penetration to offer insurance services in villages just like all other countries are doing.
"Our partners Old Mutual are insurance company. Insurance penetration in Malawi is 3% now, banking is somewhere around 22% to 33% so it is very low. So we would like to utilize the network of Malawi Saving Bank to reach out to the rural masses in insurance”
“But we think that since the majority of people are in the villages, MSB is not just going to be banking but it also be insurance products that will be taken to the people."
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| Some protests were held asking government to halt the MSB sale process. |
MSB was sold told as one way of recapitalising the bank which was failing to meet some regulatory requirements including Basil II due to financial challenge fueled by toxic loans obtained by some businessmen connected to government.
However malawians proposed that government should have recapitalised the bank with no option of selling it.
But the FDH CEO has challenged that in a specified period of time the bank will make profits "In three years time the time stipulated in the agreement that which is 24 to 36 month that we must take this bank to the Malawi Stock Exchange to sell Malawi Government portion to Malawians, you will not be surprised because you will be watching developments in the Malawi Savings Bank. But we will make Malawians proud that fellow Malawians were able to do what we were planning to do”
Asked if they plan to rename the bank he said FDH Holdings will be guided by the regulations by Registrar of Financial Institution but now will run the bank side by side.
FDH Financial Holdings Limited has acquired MSB to a tune of K5.4 billion, with Capital subscription for Basil II of K3.20 billion and Investment in ICT to a tune of K0.90 billion which total the investment of K9.5 billion.
FDH Fincial Holding Limited owns FDH bank, First Discount House, FDH Stockbrokers and FDH Money Bureau.
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