Expect More Job Cuts at MSB says MCP Shadow Finance Minister

Privatization has left bad memories in Malawians mind. Results in job cuts and sometimes closure of the company or if it manages to survive, it becomes less important to Malawians. So, Malawians anticipate the same from Malawi Savings Bank (MSB) sale. 

The Finance spokesperson for the Malawi’s main opposition party, Malawi Congress Party (MCP) says more harmful cost for selling Malawi Savings Bank (MSB) are imminent although FDH Holdings has promised hope having acquired the MSB two weeks ago.

Government signed the sale of its 75% shares to FDH Finance Holdings Limited to a tune of K5.4 billion and has set aside 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.

CEO for FDH Thomson Mpinganjira in an interview casted out fears of job cuts at MSB saying they want to do serious business of expanding the bank, a work that require more workers and more branches.

However, Finance spokesperson for MCP, Hon Alexander Kusamba Dzonzi says FDH holdings CEO promise is oratory and likened his remarks to promises made in previous privatized public institutions.

Hon Dzonzi stressed that MSB workers are at risk of being sacked and closure of many branches across the country is more likely.

“The Capitalists who have bought this bank have no remorse and don’t care about Malawians. They don’t care about 630 employees that are going to lose their jobs.” said Dzonzi as he name similar job cuts that happened at David White Head, Malawi Railways among.

“A lot of public institutions in this country have been privatized believing that that’s the way forward but what we see is nothing.” He claimed

“So the people who have bought this bank can make whatever promises but nobody is going to hold them responsible. And when they will start firing our sisters and brothers, nobody is going to ask why, when they start to close branches around this country, nobody including the Government will ask why.” Challenged Hon. Dzonzi

Hon Kusamba Dzonzi is a legislature who brought the private member’s motion on 26th February this year in parliament, asking the House to stop government from selling MSB pending Malawians views. Then the evening before the day the bank was sold a Report from Budget and Finance Committee of Parliament was presented and noted by the whole House. It made numerous recommendations emphasizing the recapitalization to meet some of the regulatory requirements including restriction of the sale of the bank. 

But the Legislature, expressed betrayal by Malawi Government for failing to obey all recommendations made by National Assembly. 

“I feel betrayed and I feel Malawians have been betrayed.” He said “I believe and respect all the people involved and I believe also that this country is governed by laws. If we start disobeying our own laws then how are you going to govern this country? Because when the house speaks that’s the people of Malawi speaking.”

“Now if the owners of the bank said don’t sale the bank, who so ever has sold this bank, then on whose behalf is he working? On whose interest is he trying to service? Who is he trying to please? He inquired then said “That definitely it is not Malawians.” 

Hon Alexander Dzonzi, who represents people from Dowa West added that government should have used other economic modules to recapitalize the bank.

He was even doubtful if the leaders who have been ruling the country since 1994 have patriotism.

Thomson Mpinganjira CEO FDH Financial Holdings who bought MSB he said they are planning to us MSB to expand their presence in the country and not shrink it. “No one will be fired” he said in the recent interview

“Out of 5.4 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” assured Mpinganjira

Malawi Savings Bank sale has been attracting criticism among Malawians. 

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.

FDH Boss Says No Retrenchments After MSB Acquisition

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."

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.