Malawi Savings Bank ‘sale goes ahead’ after posting K2.5bn pre-tax profit

Government has gone ahead to sale the wholly State-owned Malawi Savings Bank (MSB) after posting a pre-tax profit of K2.5 billion (US$6 million) between January and May 2015.msb cashgate

MSB Bank post profits

MSB Bank post profits

Malawi Congress Party (MCP) claimed on Wednesday that government have secretly proceeded to sale the bank to the only bidder FDH Financial Holdings Limited of Thom Mpinganjira, a move which parliamentarians described as an “epic swindle.”

Public outcry and parliament forced President Peter Mutharika to suspend the sale of MSB which had reportedly been weighed down by bad loans.

But MCP spokewswoman Dr Jessie Kabwila told a news conference in Lilongwe that the bank has been placed on sale despite the resistance from many stakeholders, accusing the DPP government of practising “executive arrogance.”

The opposiiton also argued that with over 70 branches countrywide, MSB was the only bank which covered most rural areas, where over 80 percent of Malawians live.  They said selling it would deprive these Malawians of banking services.

Meanwhile, published reports indicate MSB has posted a 221 percent increase compared to the same period last year when profit before tax was K773 million (US$2 million).

The bank’s unaudited management accounts ending May 31 2015, show that MSB has made a consolidated pre-tax profit of K2.5 billion against a budget of K1.1 billion (US$2.4 million), beating the target by 126 percent, The Nation reported on Wednesday July 1, 2015

The MSB management accounts report also show that MSB Forex Bureau, a wholly owned subsidiary of the bank, made a pre-tax profit of K186.4 million (US$414 222) against a budgeted pre-tax profit of K228.4 million (US$507 556).

Citing a bank source, the paper said in the past five years the bank only made a loss of K1.9 billion in 2014.

Abel Mwanyungwe, an economics lecturer at the Polytechnic—a constituent college of the University of Malawi, told the paper that using any pricing model, the K4.4 billion being quoted for MSB was an under-valuation and it was of no value to the shareholder.

Mwanyungwe, described by The Nation as a respected business and financial journalist before going to the academia, also said government’s argument that the State cannot run commercial entities and banks is not backed with any scientific and empirical evidence.

He said: “We may use both legal and political instruments, especially political leadership to prevent political parties from abusing national assets. Secondly, we need to carry a sober and independent evaluation of how best we can bring back sanity in the way we manage public assets. In my view, selling MSB cannot be the only viable solution.”

MSB has 74 points of representation across the country with a workforce of about 600.

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stewart
Guest

mwaona alomwe opanda nzeru kuba basi.alomwewa apite basi at all cost.

zonse ndi nthawi
Guest

GULITSANI MUBWEZE NGONGOLE KWA MAXON MBENDERA AMENE ADAKUGULITSANI BOMALI CHIFUKWA WATOPA NDIKUDIKIRIRA NDIKALE LIJA MPATSENI NDALAMA ZAKE .MUNTHU ADAKUTHANDIZANI UYU

dry bone
Guest

muslims plz help Malawi to chase out this guy from nyumba ya ufumu otherwise agulitsanso NBM

John
Guest

MALAWWIANS ARE QUICK TO FORGET AND SO THE CROOKS TAKE ADVANTAGE OF THEM. SOON THIS SALE WILL BE GAME OVER. MBS JUST SOLD AS A BANANA IN A BANANA REPUBLIC REMEMBR CASHGATE NOW ON ITS WAY OUT, JETGATE NOW GONE,SIX BUSES GATE NOW GONE, MAIZE GATE GONE,LOAN FERTILIZE GATE GONE, WITHOUT PARLIAMENT APPROVAL, SALE OF TRACTORS GATE GONE. I CAN GO ON AND ON AND THAT IS THE PITFUL STAND OF MALAWIANS TALKING WITHOUT ANY ACTION? CRY THE BELOVED MOTHERLAND MALAWI

dry bone
Guest

muslimz plz help us to chase munthuyu out of state nyumba otherwise…….

Mngoni
Guest

Wolamulila adziwike, A PETER WOYE ………… WHO IS JESSY/JESE?

Kamkhwezule Kakang'ono
Guest
Kamkhwezule Kakang'ono

As suggested by some stakeholders during the consultative meeting on the sale of MSB, there was need to suspend the sale and review the processes in the bidding to consider the actual price of the public asset. Many are also of the view that the special purpose vehicle is a non starter. Let MSB use the legal process to recover its loans without political interference

MAKOLO
Guest

nde zamkutu mwasowa chogulitsa

Magengena
Guest

The first mess involving msb was done by mulli and fellow lomwes whom we can tell are being shielded by govent for being lomwes and now it is tom mpinganjira,indeed these people are taking us for a ride let us not accept the sale of msb

mnyamata oyikonda nyasatimes
Guest
Executive arrogance indeed! APM tells the nation ‘ I’ve directed the suspension of MSB sale’ (makiliyobasi tone), while in fact he meant i have alrrady sold the bank. If this is indeed true, it is very unfortunate. it simply implies that our president is a cheat. Vuti la ndale zathu ndi limeneri zimamupeperetsa the whole professor kumaoneka ngati sanaphunzire ndithu cant use his head properly. MSB assets are valued at a staggering K53 billion but APM wants to sale it at a miserable 0.4 bn. (if not mistaken). zandale izi basi ngongole ya Bingu kidzera mwa Mulli tibwenze ndife a… Read more »
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