Malawi Savings Bank closure claims rejected—Goodall

Finance, Economic Planning and Development Minister Goodall Gondwe has assured Malawians, mainly Malawi Savings Bank (MSB) customers that the bank will not be closed by March 31 2015as claimed by some media reports.

According to the Minister, despite the on-going search for a strategic investor, the MSB will continue to transact business normally.

“The fears that the Bank will be closed by 31st March 2015 are not true and are based on a misrepresentation of facts by the local media on the implications of failure to comply with capital adequacy requirements.

“Contrary to those views, the Bank shall continue its operations. The search for a strategic investor is aimed at strengthening its capital position to enable it competes favourably on the market,” said Gondwe.

Government is searching for strategic investors to buy a controlling stake in the bank in the government owns 100 percent of its shares.

At the moment, First Discount House (FDH) offered K4.9 billion for 79 percent of the bank’s shares.

FDH, founded in 2008, is a 100 percent subsidiary of FDH Fiinancial Holdings Limited, whose owner is business mogul, Thomson Mpinganjira.

According to Gondwe, government has decided to withdraw from being dominant shareholder of the bank to improve the operations of the financial institution.

“The interest is to run the bank in a more efficient way. All the countries out there did the same with their postal savings bank and they are doing fine,” said Gondwe recently at a news conference in Lilongwe.

The discussions and proceedings regarding the partnership of the bank is supposed to be through my March 31 2015.

“The Registrar has given us up to 31st of this month or else we risk the closure of the bank,” he said.

According to Reserve Bank of Malawi (RBM), the MSB is weighed down by bad loans and it requires a $48.3 million in capital and liquidity by June to satisfy Basel II financial and regulatory requirements or risk being struck off by the central bank.

However, the sale of the bank met some resistance from lawmakers who successfully pushed a motion in Parliament last month halting the sale to pave way for investigations on its viability.

The MPs argue that MBS is the only bank that has wide coverage in the country, especially in rural areas where their constituents are located.