Malawi’s listed commercial bank, FMB, is currently involved in negotiations to buy equity interests in financial institutions in the region, company secretary Lucas Kondowe said on Monday.
Kondowe, who is also general manager for finance, planning and business intelligence has, however, indicated that further information on the contemplated transactions will be made public in due course.
This is not the first time for FMB to flirt with the idea of acquiring shareholding in foreign financial institutions.
In 2011, the bank led a consortium of foreign banks to acquire 93 percent stake in Zimbabwe’s Genesis Investment Bank, that country’s merchant bank.
Under the deal, which FMB later pulled out after a “detailed review of the investment opportunity and the relevant legal and regulatory framework”, the bank was supposed to acquire a majority stake in Zimbabwe’s bank along with Kenya’s Prime Bank Limited and Mount Hager of Indian Ocean Islands.
FMB wanted to acquire 30 percent stake followed by Prime Bank at 14 percent and several other fragmented groups whose cumulative interests translated into 92.3 percent with Zimbabwean investors holding the remainder.
According to MSE listing requirements, a company is supposed to inform its shareholders of any negotiation that could potentially have material effect on the stock.
Kondowe said: “The outcome of these negotiations may have an impact on the FMB share price and, accordingly, investors are, in the meantime, advised to exercise caution when dealing in FMB shares.”
FMB last year, reduced its stake in Botswana’s Capital Bank Limited it acquired in 2008 to 38.4 percent from 53.8 percent, largely compelled by Malawi’s subdued economic environment characterised by acute shortages of foreign exchange that constrained the bank from participating in a rights offer—the issuing of additional shares by a company to raise capital—undertaken in Botswana.
The bank which offers a full range of banking services, including commercial, asset management, corporate finance and leasing finance services, indicated that its profit-after-tax in the year ended December 2012 is forecast to be 75 percent higher than that reported at the same time the year before.
On the local bourse, the bank with 2.3 billion shares on issue, traded at K8.50 per share last week.