Job cuts at FDH Bank: 250 employees declared redundant for Malawi Savings Bank merger with FDH
The integration of FDH Bank and Malawi Savings Bank (MSB) will see some 250 jobs being declared redundant, FDH Financial Holdings have said.
In a statement released Wednesday signed by FDH Group Head of Marketing Sobhuza Ngwenya, FDH which acquired 80% shareholding in MSB on July 2, 2015, said the operational requirements and the need to fulfill their contractual obligations with Malawi Government in the sale and purchase agreement, have resulted in some positions being declared redundant.
“In total, approximately 250 employees from both FDH and MSB will be affected. This notwithstanding the merged bank will be among the biggest employers in the local banking sector,” said Ngwenya in the statement.
He however said the implementation of the redundancy program is in accordance with the Labour and Employment Laws of Malawi and good labour practice.
“This process has been undertaken in consultation with the Ministry of Labour and Manpower Development. In approving the merger, the Competition and Fair Trading Commission (CFTC) also recognized the need for FDH the implement a redundancy initiative as part of the business optimization process,” said Ngwenya.
“FDH recognizes that its employees will be key and expected to play a leading role in spearheading the merged Bank towards the successful attainment of its vision and mission.”
“ Although the core business strategy towards achieving the top bank status shall be driven by technology (IT) it is internally recognized that that the central pillar for growth is the Bank’s human assets (the people),” adds Ngwenya in the statement.
Ngwenya also said no FDH Bank or MSB branch will be closed as a result of this merger of FDH bank and MSB, even in locations where we have duplication of the branches
Giving an update of the integration process, Ngwenya said the IT integration is under way.
“FDH has invested in the world class T24 R14 system using an amount in excess of US$4 million (MKW 3.5 billion). First of all, all FDH bank customers will be migrated from the current T24 R10 core banking system to T24 R14 version. We will then move MSB Customers from the current Rubicon system to the T24 R14 platform. This process is expected to be concluded by the middle of May 2016.”
“ATM Integration is also in progress. Very shortly, FDH bank and MSB customers will be able to use either of the Banks’ ATMs as their ‘home’ bank’s machine i.e. they will not be paying a connectivity fee associated with transacting at a different bank’s ATM,” said Ngwenya in the statement.
He also noted that FDH Financial Holdings has several obligations under the Share Purchase Agreement (SPA) with the Malawi government one of which is recapitalize MSB to ensure that it is compliant to the regulations set by the Registrar of Financial Institutions.
“The second (obligation) is to turn around the Bank to be able to reduce the cost to income ratios which was at above 89 percent to around 60 percent within the first year. The third is to be able to ensure that Malawians are given a chance to get a share in the ownership of the Bank by listing the merged Bank on the Malawi Stock Exchange within 3 years,” said Ngwenya in the statement.
FDH Financial Holdings chief executive officer Thom Mpinganjira is on record saying the merger of MSB and FDH will be guided by the decisions of the Registrar of Financial Institutions, who is the governor of the Reserve Bank of Malawi (RBM).
“In matters of employment a job can never be guaranteed; it depends on performance. To guarantee a job means whether one performs or not they will keep their job. That is not so in FDH and cannot be so in MSB and I doubt whether there is any organisation that does that,” Mpinganjira said.
Government on July 2 2015 disposed of 75 percent of its shares in MSB which were acquired by FDH Financial Holdings Limited in a controversial deal that drew a backlash from members of Parliament (MPs) and civil society organisations (CSOs) who opposed the sale.
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Southern Offender, Your ignorance is an example on why Malawi is still a poor nation. Tribalism amonst us is one of the biggest reasons why we Malawians dont help each other so that we can progress, its really shameful. Your excitement towards 250 people losing their jobs shows how much you lack human empathy! Regardless of which part of Malawi we come from, north, south or central, we all are facing poverty, inflation, lack of job security, food shortages, water shortages, poor health care and corrupt politcs. But i cant blame you for your ignorance, the selfish and poor leadership… Read more »
Kodi Mr Chikanenepa sorry Chikaonda mukuti ndi Spar ili pa City Centreyi ku Lilongwe kapena Metro part B. Taona Spar ku RSA siizi ayi.
Bank ili la FDH ndi la amumpesa a SDA, a CCAP yambisani lanu ifenso a Catholic tiyambise lathu. Ndamva kuti akupulumuka ku FDH ndi MSB ndi a SDA okhaokha. A catholic amowa onse out,
will they be able to compensate all the people sacked though? we are talking of billions of kwachas worth of.compensation. mind you some of the people who’ve been fired had saved the bank for years in excess of 10 others 20.
And funny enough none of the people who’ve been fired have been given their dues let alone even a termination letter yet. All of them have just been told verbally.
Is this even legal? Will they be conpensated properly? But by the looks of it this far it looks shady on the side of people who’ve been fired.
southern offender u must be joking i think, losing a job has nothing to do with tribes my bro, Tumbukas do not work for FDH/MSB only, they are everywhere from UN, ADB, WORLD, EU and FDH doesnt even count in world matters unless u are telling me that your dull Mpinganjira is the CEO of the whole world,if u are bitter with tumbukas then go and walk on the lake, the tumbuka dominance cant not be stopped by one crazy mpinganjira and his dull presidnet peter mutharika who have no clues on how to manage an economy, who lied that… Read more »
That’s capitalism for you socialism is the way to go
capitalist make sure there is no lifetime job.open your eyes the casualties to be .
tumbukas you have been abusing people from south ,.being mpinganjira CEO from south.he will do his possible to sweep all northerners in msb .so this your time to park and go to north.your days are numbered
This article is rubbish! The headline is about job losses yet it only presents the story from Mpinganjiras side. A journalist worth his salt should have delved into the sale agreement. When the company was being sold what commitments did the two parties make with regard to employees? Also give us information from the employees side. What is their story? Interview some of the employees. Tell us how many in top management, middle management, lower level are affected. Talk about the implications of this on our country. Was the MSB sale a good idea in the first place? This is… Read more »
DEAR MAN OF GOD BUSHIRI
PLEASE
COME AND GIVE JOBS
TO OUR BROTHERS AND
SISTERS WHO HAVE
BEEN SACKED BY MPINGANJIRA.FDH
PROBLEM #
MALAWIANS WILL TALK
ALL SORTS OF RUBBISH
IF A MAN OF GOD DOES SO.
LAND OF IDIOTS.