Listed National Bank of Malawi (NBM) plc has completed the acquisition of a 51% controlling stake in Akiba Commercial Bank plc (ACB) in Tanzania at a consideration of USD 7.31 million through a share subscription.
NBM plc Chief Executive Officer Macfussy Kawawa expressed in an interview yesterday that the acquisition is in line with NBM plc’s current strategic plan which has regional expansion as one of its key thrusts.
“We are happy that we are now extending our footprints across the boarders in line with our strategic plan. This acquisition is expected to bring about growth in business for both NBM Plc and ACB as the ACB’s business offerings to the standards of NBM plc,” said Kawawa.
He said the investment in ACB is 2% of NBM plc current market capitalization which stands at K304 billion.
Kawawa said ACB is a Tanzanian commercial bank established in 1997 with 300 Tanzanian entrepreneurs as its initial shareholders and offers a wide range of banking and financial services.
“Akiba has strong roots for Small to Medium Enterprises (SMEs) and operates in 18 branches across Tanzania. We believe the synergies with our own offerings for SMEs will work well for our customers,” said Kawawa.
Reacting to the announcement, Economists Association of Malawi (ECAMA) president Lauryn Nyasulu hailed the development saying it is great when local companies and banks start investing internationally.
“NBM plc, by acquiring 51% of ACB has established lasting interest which is good for the company and the country at large. Foreign markets usually offer better valuation. Over the long term, an international portfolio offers better hedging against local events. This is important because it builds resilience of the bank to shocks. In an event that the Malawi economy is struggling the company will perform much better than the companies that purely depend on the domestic market,” said Nyasulu.
She said the investment by NBM plc is also good for the economy because it allows the bank to reinvest profits from the foreign investment (ACB) and contribute to the overall growth of the economy.