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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38 thoughts on “Malawi Savings Bank ‘sale goes ahead’ after posting K2.5bn pre-tax profit”

  1. stewart says:

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

  2. zonse ndi nthawi says:

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

  3. dry bone says:

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

  4. John says:

    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

  5. dry bone says:

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

  6. Mngoni says:

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

  7. Kamkhwezule Kakang'ono says:

    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

  8. MAKOLO says:

    nde zamkutu mwasowa chogulitsa

  9. Magengena says:

    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

  10. 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 malawi basi in the name of toxic assets.

  11. Serenje says:

    Cowards die many times before actual, the valiant never taste death but once. Malawians , lend me your ears I come to say this and not to joke. No politicians has the heart of people, and our suffering is the hot business ground . So shall we continue with our cowardice , & continue dieing many times ? Lets come together malawians & refuse to be cowards. We can turn into militia people, even if it will means to lose lives, but at the end there,will be even distribution of resources. if we stay idle crying as it is , poverty is going to be more than we are at present.

  12. This government does not listen, it’s arrogant just leave them like that chidziwa ndi chipande popakula/powomola.

  13. daud says:

    Mulli

  14. Alfred Munduwabo says:

    STUPID MALAWIANS , WHY CRYING ? YOU VOTED FOR PETER , HE IS THE ONE RUNNING THIS COUNTRY.

  15. Shaft Saachapandimadzi says:

    I don’t c any problem selling the Bank. After all t wil still be in Malawi. Gulisani zimenezo bwana Peter. Mukagulisa MSB mugulisenso Reserve Bank

  16. Yesaya Dziko says:

    I hope all is cleared now. No sale.

  17. Roy says:

    Very sorry

  18. Charombanthu says:

    “Whichever option I choose, men are going to die” – This was a statement made by a fictional USA president in Federick Forsyth’s novel, “The Devils Alternative”. My reading and understanding in all this MSB saga is that by 30th June 2015, if the bank was not re-capitalised by the existing shareholders i.e. government putting in more capital to satisfy the minimum capital requirements in accordance with the International Basel II Accord, the bank would have to be closed down by the Reserve Bank of Malawi. The alternative was to find a buyer (i.e. sell the bank to anyone) who was prepared to inject in more capital to meet or satisfy this minimum capital requirement accord. These were the two alternatives available for this bank, unfortunately and it appears the lesser evil alternative was the latter because the bank would continue to operate and its staff would still have their jobs (at least most of them) and possibly the bank would still be present in the rural areas of Nsanje or Chitipa or Jenda under a different shareholder. The questions that remain to be answered or addressed are: Was the bank sold at a “reasonable” price? Were there some under-dealings in the whole transaction? What is the position of the toxic assets that the bank is carrying vis-a-vis this sale? My view is that these are the issues that our honourable members of the house (MPs) should be looking at. As citizens, we are all bitter because it is our tax that is being “written off” to gratify a few individuals who benefited from the bad loans that the bank gave out. Food for though……

  19. chikhwa says:

    Iwowo a APM amanamiza ndani? He shuld be aware that he wont fool all of us all the time.

  20. Rodgers Banda says:

    That thing had been milking people’s money for the past 30 years It went bunkrupt coz the crew management are/were bandits It is being sold to fellow bandits.

  21. CHAKWERA NDI TOMBOLOMBO says:

    Sale No Sale I Will Maintain My Account There. Whoever Has Bought It I Dont Care. Boma Ndi Boma Basi!

  22. Pension Nenereko says:

    Have u read wise words from DD Phiri? He has said we needed to check with other governments how they handled their banks in time of crisis. While ma government openya bail out important banks in their countries, Malawians are busy selling theirs? Anthu ife ndife fools??????????

  23. Naomi says:

    Shame…and to think there is no surgeon at mzuzu central hospital the only referral hospital in the central region makes me sick.how can they do that? People refuse to come here and we had someone who was willing to stay here and they choose not to renew his contract..very despicable..playing politics I guess.at the expense of azibale athu.choncho miziti the northerners are selfish for wanting federalism?very sad

  24. mulopwana says:

    MALAWI YIKUPITA KUTI…..TIYENI TONSE TIZIGOBA BASI……………KOMA DPP SINGASINTHE NKHALIDWE AYI…MUNO MOFUNIKA BOKHO HARM BASI ALIYENSE ALUZE

  25. Nyau Isthobwa says:

    Mulla watetezedza tsopano zonse zayenda no any problem we are ruling no tribe will beat us mark my words

  26. Professor Dr. James Napwiri Phiri says:

    These are grounds of impeachment of Peter Mutharika

  27. The real Ujeni says:

    Pajatu Joyce Banda was a bad person and you voted in an angel Peter Mutharika. Stop crying and live with it. Cashgate number two, tick. We told you Malawians koma kupusa koposa apa can only be found in Malawi. Peter Mpinganjira reaping where he did not sow, alomwe woyeeee

  28. uchikudyamkati says:

    IT IS BEING SOLD TO A FELLOW MALAWIAN NOT MWENYE, KAPENA MBUNO IKHALA YA PA BVUMBWE POMPA APA

  29. ZZ Junior says:

    Leading between the lines you will realize that the bank was making losses during PP rule thereby warranting its sale. The profit being paraded here, has been realized during DPP rule. So the question is which government has contributed to this catastrophe.

  30. OBSERVER says:

    THATS IT!%@,.. THESE PEOPLE DON,T LISTEN . THEY ARE CROOKS, THIEVES ., UNDEMOCRATIC.PLUNDERS. YOU ARE ACCUMULATING WEALTH YET UR TOO..(YOU KNOW WHAT I MEAN) CCAP REVERANDS SEE & PLEASE SIT DOWN WITH UR ELDERS (PETER – BT & GOODALL – LIVINGSTONIA)

  31. clement says:

    Tilowe kaye mkalasi: it seems many mw journalists are very bad at english grammar. Can’t differentiate between the words “sell” and “sale”. The following are grammatically correct; 1. He wants to sell his chickens. 2. His chickens are on sale. Employ me to check grammar before you post news articles. Nyasatimes is read around the globe

  32. Achimidzimidzi says:

    Can any one deny that our president is not an honest person,now?

  33. man dlhaka says:

    “Especially political leadership to prevent political parties from abusing national assets”….what does he (the lecture)try to mean or how can this work?The abuse of national assets is done by a particular party in power and nothing less than it.Does political leadership refer to anything else that doesn’t link itself to a political party in power?

  34. rumhi east says:

    Maganozi anga,it probably leaves you bankrupt(just check with the relevant authorities before it’s too late ie calling the HQ)your money is definitely safe man cos you didn’t sell the bank and it’s a Mere change of ownership.

  35. Kadakwiza says:

    Malawians, Malawians, Malawians, crying like babies. Nothing can be done to prevent the selling of Malawi Savings Bank. The DPP government don’t respect its people. They can do whatever they want. Whether Malawians are suffering this DPP government don’t care. They don’t care because they have got these lomwe useless tribe which will still vote for them. Malawi is in trouble.

  36. Jastasi says:

    May God almighty deliver Malawi from these evil filled demonic government full of thieves big bigger and biggest thieves

  37. mtumbuka1 says:

    Going going gone!! That’s how mutharikas operates, the mafia style. Him and his brother were the same,arrogant in the sense that they don’t listen to anybody and they are more Malawian than anybody else. The problem in Malawi is the illiterate masses of the southern region even if peter chooses to sell the whole country they will still vote for him typical of lomwes (tobacco tenants)

  38. maganizo anga says:

    where does it leave the customer, are we affected? would like to know because I am not at home but I have my saving with them???

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