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NBM says advancing in Tanzania bank acquisition

National Bank of Malawi

National Bank of Malawi (NBM) Plc has announced that discussions on possible acquisition of Tanzania’s Akiba Commercial Bank are nearing completion.

This comes barely few weeks after the Tanzanian Fair Trading Commission cleared NBM to acquire a 75 percent stake in the Tanzania-based bank.

In a public notice, NBM says the discussions are expected to be concluded by end this month.

The bank has since issued a cautionary statement as acquisition may affect its share price on the local bourse, the Malawi Stock Exchange.

“Shareholders are, therefore, reminded to continue to exercise caution in dealing in their shares in the company and consult professional advisors before dealing in their shares until such time as the result of the negotiations are known,” the statement reads.

Alliance Capital Research Manager Bond Mtembekeza said the acquisition of the bank may not show immediate impact on the Malawi Stock Exchange as it is slow to react to trends.

Mtembekeza said NBM’s acquisition of controlling stake in Akiba Commercial Bank may affect dividends.

“NBM taking 75 percent of stake in [Akiba Bank], it means it has to commit a lot of resources to bail it out and that can have an impact on local shareholders dividend-wise.

“Overall Tanzania is a great economy to invest in and NBM shareholders have to look at it as a long-term investment,” Mtembezeka said.

NBM signed a share acquisition agreement with Akiba Commercial Bank on January 31 2020 a move which saw the Tanzanian Fair Competition Commission clearing NBM to acquire a 75 percent stake.

Once the deal materialises, the bank will be second listed financial institution to have stakes outside the country, the first being First Capital Bank.

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