By Kingsley Jassi:
At least three of the locally built banks have either expanded into the region or are making progress in negotiating to purchase controlling stake in foreign banks.
This is said to signify the country’s strength in the financial sector despite ongoing economic adversities that have left other industries at their lowest in recent times.
The central bank acknowledges these moves, saying this helps to strengthen the local resource portfolio but has cautioned that it also creates exposure to foreign risks and regulatory complexities.
For the business sector, this trend by the banks is understood to have potential to strengthen the country’s financial system, availing foreign currency that is currently in short supply.
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First Capital Bank (FCB), the country’s first privately-owned commercial bank, has seen itself, during its 30 years of existence, expanding to four other countries that include Mozambique, Zambia, Zimbabwe and Botswana, having registered its holding company, FCB Financial Holdings, in Mauritius.
The company boasts of assets worth $1.7 billion now and for the founder, Hitesh Anadkat, all this expansion happened against all odds as they openly faced resistance in other countries, like Zimbabwe, where they did not have confidence that a Malawian bank would buy that country’s elite Barclays Bank.
Today, the bank says all its operations in the five countries, including Malawi, are generating at least $20 million profits and are all manifesting what can come out of this small economy.
Speaking in Lilongwe at the recent celebration of 30 years of existence, Anadkat said the bank’s regional expansion has not stopped at four foreign subsidiaries.
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“Our goal is to make these subsidiaries grow and, maybe, further add a few more,” he said.
One local investor, Napoleon Dzombe, said on the sidelines of FCB’s 30th anniversary celebration that the business sector depends on a robust financial system and that such expansions show that local banks are in good health, which gives them confidence.
Another privately started bank, FDH, is making its own headway into the regional market, having announced previously that negotiations to buy a controlling stake in an unnamed foreign bank were progressing.
This follows the bank’s announcement in 2024 that it had looked into prospects in Zambia and Mozambique and would be making moves to grow these markets.
Another local outfit, National Bank of Malawi (NBM), is operating in Tanzania after its acquisition of Akiba Bank.
However, that entry has not been that smooth and, now, some minority shareholders are grumbling, prompting the bank to set up a committee at board level to examine this venture.
Still, the bank continues its regional expansion as it works its way into Mozambique, where negotiations are said to be progressing to buy another bank, according to previous announcements that did not mention the country.
RBM spokesperson Boston Maliketi Banda said expansion into foreign markets had advantages, including enhancing portfolio diversification, facilitating cross-border trade and payments and increasing foreign exchange.
“ Operationally, exposure to foreign markets provides opportunities to adopt international best practices for operational efficiency, access to specialist skills and leveraging synergies from centralised services in regional banking groups,” he said.
