Malawi Stock Exchange-listed National Bank of Malawi (NBM) plc has concluded the acquisition process of 51 percent stakes in Tanzania’s Akiba Commercial Bank (ACB) through a share subscription for a consideration of $7.31 million (about K5.614 billion).
NBM becomes a second local bank to have footprints outside the country after First Capital Bank.
In a cautionary statement signed by NBM Company Secretary Zunzo Mitole, the bank says it is still negotiating with ACB to acquire an additional stake; therefore, shareholders should exercise caution.
“The acquisition is in line with NBM plc’s current strategic plan which has regional expansion as one of its key thrusts. This acquisition is expected to bring about growth in business for both NBM plc and ACB as it up-scales the business of ACB to the standards of NBM plc,” the statement reads.
Commenting on the acquisition, Research Manager at Alliance Capital Bond Mtembezeka said impact of the move would not be immediately felt on the Malawi Stock Exchange as the market does react swiftly.
“There are things to watch, however, because NBM is buying a bank that is in trouble at the moment.
“Akiba’s deposits and net income have nosedived over the last four years which means NBM has to commit a lot of resources to bail it out and that can have an impact on local shareholders’ dividends,” he said.
Mtembekeza, however, said Tanzania remains a promising market as its economy is resilient.
ACB is a Tanzanian bank which was established in 1997 with 300 entrepreneurs as its initial shareholders and has 18 branches there.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
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