NBM To Turnaround Inde Bank Into Profit Making, Offer New Services

National Bank of Malawi (NBM) has new plans for its newly acquired Inde Bank for both growth and new services.

On Thursday, NBM bought both Malawi Government and ADMARC shares in Inde Bank to a tune of KK4.7 billion representing 67% of shares would use K1.6 billion for regulatory requirement for the recapitalization and this sums to K6.3 billion. The signing agreement took place at the Capital Hill where Minister of Finance Goodall Gondwe signed the deal on behalf of Malawi Government and Mr. George Partridge signed on behalf of NBM.

At the same event government also signed the sale of Malawi Savings Bank (MSB) where Minister of Finance signed on behalf of Government while Dr. Thom Mpinganjira signed on behalf of FDH Holdings

In an interview, NBM Chief Executive Officer (CEO) Mr. George Partridge says NBM had due diligence when placing bid and that after acquiring the bank NBM would look further at how they can do with the bank.

Partridge then said among others, NMB is ready to use its new subsidiary to offer other products that are not offered by Malawi banks. He said NBM will use Inde Bank to utilize offers from Development Banks lines of credits to service Malawians as National Bank is failing to provide them due to its commercial license.

He also indicated that NBM bought the shares to take over the bank so that they can manage it in such a way that it starts to make profits again to prevent systemic risk to the finance system.

“After such long process the anxiety are now over and we can now move ahead and reorganize and restructure Inde Bank into a bank which we would like it to be” He said, “at the moment the bank is a loss making and failing to meet some of the regulatory requirement of the registrar (Reserve Bank) and one of the things is to recapitalize the bank so that it abides to RBM requirement.”

The NBM CEO assured; “We think we can turnaround the bank. We have strategies to turnaround that bank to be profit making bank once again”

He then explained; “We have seen that there are things that need to be done right in that bank and we think that we have ability to do that. We have demonstrated ourselves that we are making profits because of what we are doing. So if we apply the same methods and systems that we have to Inde bank we think we can turnaround Inde Bank, there is no reason why Inde Bank should be making losses.”

NBM has bought Malawi Government and ADMARC shares and will pay the money this week and the part of the money will be used for the recapitalization of the bank since the bank is undercapitalized.

MSB Sold to FDH as Inde Bank Bought By National Bank

The Malawi Savings Bank (MSB) has finally been sold to First Discount House (FDH) Holdings Limited, Malawi government’s preferred bidder committing to invest K9.5 billion including K5.4 billion for the existing shares.

Government has justified the sale saying the unanimous support to sale the bank was made by the Academia, Economics Association of Malawi, Banker’s Association of Malawi among others through various debates it conducted.

“It was, however, appreciated that any attempt to abort the transaction would deeply harm the financial sector and the would aggravate the country’s risk ratings.” Said Finance Minister Hon. Goodall Gondwe at the signing of the bank’s sale Thursday morning

FDH Holdings offered K5.4 billion in respect of 80% of the shares of MSB and claims the offer is far in excess of the bank’s net assets which the independent valuation done by ECAMA and Professor Ben Kalua, had placed at no more than K4.5 billion after excluding toxic assets.

Of the 80% shares to be acquired by FDH, 5% shall be sold to the staff and the 20% Government shares shall full ultimately be listed on the Malawi Stock Exchange for Public participation.

The total investment by FDH Holdings will consequently be; Purchase price for the shares- K5.4 billion, Capital subscription for Basil II-K3.20, Investment in ICT-K0.90 billion and the total investment is K9.50

“It is important to note that all the bids were prepared on the basis that the Government would hive off the off the toxic assets. Had the toxic assets remained in the bank, the offer price would have been significantly depressed.” Said Gondwe

Goodall Gondwe further said government has established a special purpose vehicle in order to optimize efforts of recovering the toxic debts owed to the MSB and that professionals have been appointed to recover the debts. He said those who may fail will have their assets confiscated and within six to one year the experts will have finished the the job.

Gondwe has further assured that MSB sale will “benefit from a more dynamic and innovative management through private sector participation and added that any further delays in implementing the sale may precipitate into untold arm on the economy, and may greatly undermine the integrity of Malawi’s system.”

Meanwhile, Inde Bank, has been sold to National Bank of Malawi (NBM)

The bank has been sold to a tune of K4.7 billion which is 67% of shares where by K1.6 billion is for the regulatory requirement for the recapitalization. And this sums to K6.3 billion.

Inde Bank in Charity Work

Inde Bank supports Visual impaired families in Salima with farm inputs

Inde Bank on Friday afternoon brought joy among visual impaired farmers of Chinguluwe Settlement Scheme in Salima when the bank supported them with fertilizer and maize seeds.

The donation is worth MK600 thousand, to benefit up to 80 families blind families of the Scheme.

George Namandwa the Inde Bank Deputy Chief Executive Officer when presenting the donation in Salima at Chinguluwe, said the bank was overwhelmed with hard working spirit shown by these farmers and that the donation is meant to uplift their efforts so that this farming season they should realize more benefits farming.

“Inde Bank selected this area because it is concerned with the blind. We have a focus in our Corporate and Social Responsibility policy to target the underprivileged especially those to do with the blind.” He said

“Part of our mission statement we say that we want to be relevant to the communities in which we serve, relevance does not only imply making profits but uplifting the lives of people in which we serve. We believe that once we uplift those lives we build relationships that will then help us grow.” Said Namandwa

He said the bank would in future support these farmers depending on the availability of resources.

Boniface Calvin, a Chairperson for Malawi Union of Blind in Salima district shares his excitement towards this donation

“Am gratefully happy with the gift from Inde Bank because we are going to achieve what the blind people were lacking. For example we have here fertilizer and maize seeds this means we have a start.”

He noted that the support from Inde bank is a boost to the families of visual impaired farmers in the district who are currently not benefiting much from the government programme ‘Fertiliser Subsidy Programme (FISP)’ due to the limited number of beneficiaries per village since number of families including the blind are forced to share the contents that are meant for a single family coupon.

“Inde Bank has added more soup to the blind” he said adding “and as we have received the Inde Bank fertilizer it means that, plus the portion we are going to get from fertilizer subsidy the improvement of production will be very high next year”