FDH Financial Holdings Limited, the parent company of FDH Bank, has projected a robust future for the bank after meeting regulatory requirements under Basel Il.
Basel II—the second of Basel Accords issued by the Basel Committee on Bank Regulations which rolled out on January 1 2014—aims to promote adequate capitalisation of all banks and encourage improvements in risk management and strengthening the stability of the banking system.
In an interview on Friday in Blantyre, FDH Financial Holdings Limited group chief executive officer Thom Mpinganjira said FDH Bank is poised to achieve the desired profitability and compete favourably on the market going forward having achieved this feat.
He said: “We have dealt with all regulatory requirements and our plan going forward is to grow the bank’s profitability. This clearly shows that the bank is now robust,” he said.
In July 2015, FDH Financial Holdings bought 80 percent stake in Malawi Savings Bank (MSB), which included five percent for the bank’s employees. The remaining 20 percent is held by the Malawi Government.
In the first phase of recapitalisation, the group injected K6.6 billion, out of which K1.1 billion is for restructuring leading to the acquisition of 100 percent stake of FDH Money Bureau. This leaves K5.5 billion as a direct injection into the bank, according to Mpinganjira.
He said at end of the second phase of recapitalisation, with an additional K5 billion, the group will have invested K11.6 billion (about $14.7 million), making FDH Bank one the strongest financial institutions on the market in terms of capitalisation.
In an earlier interview, RBM deputy governor (supervision) Grant Kabango said the central bank is playing its oversight role to ensure that the financial system is robust to withstand any shocks to ensure that depositors’ money is safe.
FDH Financial Holdings is 55 percent owned by M Development Limited, 40 percent by Old Mutual (Malawi) Limited and five percent by employees. n