FDH – MSB merger to form 3rd largest bank


The prospective merger between FDH Bank and Malawi Savings Bank will create Malawi’s third largest bank by market share, according to an analysis by the Competition and Fair Trading Commission (CFTC).

CFTC said in a report yesterday that the FDH-MSB merger, once effected, will command a market share of 15 percent and will come third from National Bank of Malawi (NBM) and Standard Bank which have 25 percent market share each.

The NBM market share excludes its proposed merger with Indebank which, when implemented, will make it the largest bank in Malawi by far.


According to CFTC, the rest of the banks in Malawi have individual market shares of less than 10 percent each.

This, says CFTC, is the reason why it approved the merger of the two as it found that the transaction may not result in substantial lessening of competition in the banking and foreign exchange trading markets

“Rather, the transaction will ease the dominance by the two big banks, which would be a positive competitive attribute,” reads the CFTC report in part.


In light of these findings, CFTC said it resolved to approve the transaction subject to the parties complying with some undertakings, which include that they will not abuse their increase in market power as a result of the merger.

On fears of job losses as a result of the merger, CFTC says the approval also has a condition that in line with the sales purchase agreement, the parties will maintain the existing MSB staff at the same or improved terms and conditions of service.

Another condition, according to CFTC, is that all existing branches of MSB and FDB Bank will be maintained.

“Should there be need for retrenchment, all redundancy and termination costs shall be paid accordingly,” reads the CFTC statement.

FDH Financial Holdings, the mother company of FDH Bank, became the majority shareholder in MSB after government diluted it’s 100 percent shareholding in the bank to 20 percent.

MSB is now expected to be dissolved within one year and merge with FDH to fulfill requirements of the Reserve Bank of Malawi (RBM) that makes it illegal for one shareholder to operate two banks under different brands.

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