Malawi is selling portions of two commercial banks to re-capitalise in a move meant to turn around the struggling banks, the government’s divestiture agency said on Monday.
The Public Private Partnerships Commission (PPPC) requested strategic investors to buy a controlling stake in state-owned Malawi Savings Bank (MSB) and Indebank Malawi Ltd., in which the government owns nearly 70 percent of its shares.
PPPC did not disclose the sizes of the stakes that are up for sale or how much it was selling them for.
“The decision to recapitalise the two institutions has been motivated by the desire to strengthen their financial and operational capabilities in a competitive environment,” the agency said in a statement.
Jimmy Lipunga, chief executive officer of the PPPC, said the entry of a strategic equity partner is likely to promote innovation and growth in market share.
The announcement comes after The Nation newspaper reported that the central bank or Reserve Bank of Malawi had said the MSB is weighed down by bad loans.
The report also said MSB requires a $48.3 million (MWK 23.7 billion) in capital and liquidity by June to satisfy Basel II financial and regulatory requirements or risk being struck off by Reserve Bank of Malawi.–Reuters