Malawi’s leading home-grown and fast-growing commercial bank FDH Bank plc is setting its commercial sights in doing business in the neighbouring Zambia and Mozambique.
The Malawian-owned bank has been conducting market surveys in Zambia and Mozambique to assess the feasibility of penetrating the regional markets as part of its long-term expansion strategy.
FDH Bank Managing Director Noel Mkulichi announced Tuesday in Malawi’s commercial city, Blantyre during the bank’s second Investors’ Forum.
In his presentation, he said the Malawi Stock Exchange (MSE)-listed bank wants to tread carefully as it conducts market research to minimise the risks that could affect equity holders.
“The markets are different in terms of legal and business environment, so we need to analyse further before investing.
“We are currently assessing the Zambian market and we will see whether there will be an acquisition. Last year, we went to Mozambique for a similar mission, but for now we are still doing the study,” said Mkulichi.
If FDH Bank plc successfully executes the plan to the letter and penetrates the regional markets, it will be among the three MSE-listed firms that have subsidiaries accross Malawi borders.
FMB Capital Holdings Limited, whose subsidiary is First Capital Bank, has footprints in Mozambique, Botswana, Zimbabwe and Zambia while National Bank of Malawi owns 51 percent stake in Akiba Commercial Bank of Tanzania.
On her part, FDH Bank plc board chairperson Charity Mseka said: “The bank has revisited its strategy, adding four pillars that could enable it achieve the expansion ambition and develop resilience from current economic threats.”
She added that the pillars, namely customer focus, operational efficiency, people development and continuous innovation, will ensure the bank overcomes current exchange rate volatilities, inflation pressure and foreign exchange scarcity risks that are expected to continue in 2024.
Said Mseka: “These pillars could also enable the bank to utilise the available opportunities like the economic recovery-related private sector credit growth that would see the bank increasing its lending to private sector apart from the said regional expansion drive.”
However, despite shareholders and stakeholders receiving the regional expansion news with excitement, investment analysts highlighted the need for the bank to conduct thorough feasibility studies before making a decision.
Stockbrokers Malawi Limited equity investment analyst Kondwani Makwakwa said the bank’s interest to expand regionally shows that the local financial sector is maturing, but urged thorough feasibility studies before making a final decision.
He described such investors’ forums as beneficial because they are cementing the relationship of listed companies with shareholders.
Said Makwakwa: “These meetings have proven to be critical in ensuring flow of information and clearing misunderstanding between companies and shareholders who normally lack more time during annual general meetings to ask as many questions as possible because of the nature of the meetings.”
On the other hand, Minority Shareholders Association of Listed Companies general secretary Frank Harawa hailed the bank’s performance in 2023, having posted a 55 percent growth in profit after-tax of K35.6 billion.
He advised the bank to also consider partnering with mining companies to tap from the much touted agriculture, tourism and mining strategy which he said is a game-changer for the country’s long-term economic growth.
The trendsetting FDH Bank is the first bank in Malawi to establish the first ever Islamic banking solution window.
