Competition and Fair Trading Commission probes planned merger of MSB and FDH


Malawi’s Competition and Fair Trading Commission (CFTC) has finally commenced investigations into the prospective merger between Malawi Savings Bank (MSB) and FDH Bank, six months after the acquisition of majority MSB shares from the Malawi government by FDH Financial Holdings.

CFTC executive director, Wezi Malonda, says the investigation is meant to assess the impact of the merger on competition in Malawi’s financial industry in line with Section 38 of the Competition and Fair Trading Act.

She said while CFTC has received an application for the authorisation of the acquisition of Indebank Limited by National Bank of Malawi, the parties have not yet fulfilled all the necessary requirements for their application to be considered complete.


“Determination on the impact of the proposed acquisition of Indebank on competition awaits the fulfillment of the outstanding requirements by the parties,” said Malonda.

She said earlier that the Competition Act allows parties to a merger to make an application for authorisation before or after closure of the transaction depending on various circumstances surrounding the merger.

She said an application before closure of the transaction is precautionary, whereas, application after closure CFTC is for compliance purposes.


Malonda said there was a low probability of the mergers being rejected; saying rejection is not the only solution to mitigating anticompetitive conduct.

“In some countries where mergers have been rejected, it has actually been more detrimental to competition than beneficial to the public. Such measures are used as a last resort, after exhausting other mechanisms and remedies to address the competition concerns,” she said.

NBM became the majority shareholder in Indebank after acquiring 67.05 percent shares owned by the Malawi government and a further 30 percent from Press Trust, bringing its total interest in the bank to 97.05 percent.

Meanwhile, both Indebank and MSB are expected to be dissolved within one year to merge with NBM and FDH respectively in fulfillment of the central bank’s requirements that make it illegal for one shareholder to operate two banks under different brands.

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