FDH Bank eyes Zambia, Mozambique markets

FDH Bank plc says it has conducted market surveys in Zambia and Mozambique to assess the feasibility of penetrating the regional markets as part of its long-term expansion strategy.

The bank’s managing director Noel Mkulichi said this on Tuesday in Blantyre during the second FDH Bank Investors’ Forum.

In his presentation, he said the Malawi Stock Exchange (MSE)-listed bank wants to tread carefully as it conducts market research to minimise the risks that could affect equity holders.

Said Mkulichi: “The markets are different in terms of legal and business environment, so we need to analyse further before investing.

“We are currently assessing the Zambian market and we will see whether there will be an acquisition. Last year, we went to Mozambique for a similar mission, but for now we are still doing the study.”

If FDH Bank plc successfully penetrates the regional markets, it will be among the three MSE-listed firms that have subsidiaries accross Malawi borders.

FMB Capital Holdings Limited, whose subsidiary is First Capital Bank, has footprints in Mozambique, Botswana, Zimbabwe and Zambia while National Bank of Malawi owns 51 percent stake in Akiba Commercial Bank of Tanzania.

FDH Bank plc board chairperson Charity Mseka said the bank has revisited its strategy, adding four pillars that could enable it achieve the expansion ambition and develop resilience from current economic threats.

She said the pillars, namely customer focus, operational efficiency, people development and continuous innovation, will ensure the bank overcomes current exchange rate volatilities, inflation pressure and foreign exchange scarcity risks that are expected to continue in 2024.

“These pillars could also enable the bank to utilise the available opportunities like the economic recovery-related private sector credit growth that would see the bank increasing its lending to private sector apart from the said regional expansion drive,” said Mseka.

However, despite shareholders and stakeholders receiving the regional expansion news with excitement, investment analysts highlighted the need for the bank to conduct thorough feasibility studies before making a decision.

Stockbrokers Malawi Limited equity investment analyst Kondwani Makwakwa said the bank’s interest to expand regionally shows that the local financial sector is maturing, but urged thorough feasibility studies before making a final decision.

He described such investors’ forums as beneficial because they are cementing the relationship of listed companies with shareholders.

Said Makwakwa: “These meetings have proven to be critical in ensuring flow of information and clearing misunderstanding between companies and shareholders who normally lack more time during annual general meetings to ask as many questions as possible because of the nature of the meetings.”

On the other hand, Minority Shareholders Association of Listed Companies general secretary Frank Harawa hailed the bank’s performance in 2023, having posted a 55 percent growth in profit after-tax of K35.6 billion.

He advised the bank to also consider partnering with mining companies to tap from the much touted agriculture, tourism and mining strategy which he said is a game-changer for the country’s long-term economic growth.

FDH Bank plc, a subsidiary of FDH Financial Holdings Limited, listed on MSE on August 4 2020, with an Initial Public Offer price of K10. The share price is now at K65.11.