On Saturday the 25th of June, 2016, rugby teams are expected to tussle for the Annual FMB sponsored Leslie Seven’s Rugby trophy; the tournament will be played at Blantyre Sports Club.

For the past four years the tournament has been bankrolled by First Merchant Bank (FMB) as one way of helping to develop minority sports in Malawi.

The Annual Leslie Seven’s Rugby Tournament was introduced in Malawi in 1948 by Wilfred John Leslie Snr, a Blantyre City Councillor and founding member of the Limbe Country Club.

The first trophy was won by his team, Blantyre Sports Club which was captained by his son, Jock Leslie.

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FMB organized a Golf Day for its corporate customers on 19th June, 2016 at the Thyolo Sports Club.

The event started with registration at 8:30 am. The game was followed by prize distribution in different categories that saw winners going away with different FMB branded items and K90,000 cash prizes to overall winners in the men’s and ladies category. In her speech, FMB’s Head of Marketing & CSR Sylvia Mataka said this was one way for FMB to interact with its corporate customers to inform them of the current innovative products and services that FMB has introduced for its corporate customers.

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FMB has lived up to its promise to support the judiciary in its digitization plans after donating five computers to the High Court of Malawi in Blantyre on 14th June, 2016.

The handover ceremony was held at the High Court Building in Blantyre where FMB’s Group General Manager, Corporate & Commercial Banking Mr. Phillip Madinga, expressed the bank’s commitment to ensure judicial officers and interns are well equipped with the right tools to enhance communication technology to speed up court cases. On his part His Lordship Chief Justice Nyirenda was grateful to FMB for their continued support to the judiciary and said the computers will go a long way in assisting judiciary staff access information and do research on cases with ease.

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REVIEW OF THE PERIOD

The general economic malaise persisted in the first half of 2016. In response to prevailing high rates of inflation and continued pressure on the domestic currency, the authorities maintained a tight monetary policy stance. Whilst lending rates remained unchanged, yields available on government paper trended sharply upwards with the wholesale money market following suit.

We experienced a minor contraction in the level of overall customer deposits as we reduced our exposure to high cost wholesale fixed deposits. Despite this, our balance sheet grew, with total assets increasing by 19% through the utilization of credit lines available from financial institutions and proceeds of a subordinated debt issue. K7 billion equivalent of foreign currency denominated subordinated debt included on the June 2016 balance sheet was repaid on 3 July 2016.

Operating results were depressed due to the poor performance of our portfolio of listed equity investments which returned a loss of K1 billion compared to a K355 million overall gain in the corresponding prior period. Income from foreign exchange trading was flat as increased volumes compensated for narrower margins. Other fee and commission income grew strongly as did net interest income on the back of an expanded balance sheet.

It remains challenging to contain costs in the current high inflation environment but, overall, operating expenditure is in line with our expectations for the period.

OUTLOOK

We expect high levels of inflation to continue and the domestic currency to remain under pressure. Accordingly, the monetary authorities are likely to seek to maintain the current high interest rate regime. There is also a heightened risk of periods of insufficient liquidity in the banking sector.

We will continue to conservatively manage our balance sheet and remain averse to excessive credit risk. To compensate for a possible narrowing in net interest margin, we are focusing on achieving broad based growth in our non-funded income lines.

DIVIDEND

The Directors have decided that a first interim dividend will not be paid (2015:50 tambala). This decision has been made to ensure that the company’s regulatory capital is strengthened to support long term growth.

By order of the Board,

Dheeraj Dikshit – Group Managing Director
Michael Kadumbo – Chief Finance Officer
Hitesh Anadkat – Chairman

Download full HY2016 results

The post FMB | Summary of Unaudited Consolidated and Separate Results for the 6 months ended 30 June 2016 appeared first on First Merchant Bank Limited (FMB).

In terms of the listings requirements of the Malawi Stock Exchange Limited, a listed company is required to publish a trading statement as soon as it is satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported upon next will differ by at least 20% from the financial results for the previous corresponding period.

First Merchant Bank Limited accordingly advises that its forecast profit attributable to shareholders for the financial year ending 31 December 2016 is expected to be at least 40% higher than achieved for the financial year ended 31 December 2015. The information on which this trading statement is based has not been reviewed or reported on by the Company’s external auditors.

The summary consolidated and separate financial statements of the company for the financial year ending 31 December 2016 are expected to be published in the press in March 2017.

Oswald Mtokale
Company Secretary
30 November 2016

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First Merchant Bank (FMB) on Friday presented scholarships worth close to K1 Million to Chichiri and Joshua Secondary Schools to support outstanding and under privileged students on the FMB scholarship program.

Speaking at Chichiri Secondary School hall during the official hand over of the scholarships, FMB Official, Mr. Allan Nasoro urged the students to work hard in order for FMB to continue the scholarship program.

On his part the Deputy Headmaster of Chichiri Secondary School Mr. Distone Gawani thanked FMB on behalf of staff and students from both schools for supporting the less privileged students and appealed for more support as there are more students requiring financial support. FMB is currently sponsoring 35 students from Chichiri and 24 students at Joshua Secondary School.

Richard Magombo, a beneficiary student from Chichiri Secondary School, speaking on behalf of his fellow beneficiaries promised to impress FMB by working hard in order to maintain their scholarships. He also expressed gratitude towards FMB for giving them a chance to access quality education.

The FMB scholarship program has been in place for over 15 year; it serves to assist students who excel in their academic performance and yet cannot afford to pay their way through because they are less privileged. Scholarship are offered to both secondary school and university students. FMB spends close to K10 million a year in scholarships and various educational promotional initiatives.

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FMB officials, scholarship beneficiaries and school officials have a photo moment after the presentations.

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The Directors of First Merchant Bank Limited (“FMB”) wish to advise its shareholders and members of the public the following:

Corporate Restructuring

We have been advised by three principal shareholders, collectively representing 55% of the issued capital of FMB, that they intend to transfer their shares in FMB to FMB Capital Holdings Plc (“FMBCH”), a company incorporated in Mauritius, in exchange for shares in FMBCH. Subsequently, FMBCH will make an offer on the same terms to acquire the remaining 45% of the issued shares of FMB by way of an offer document complying with the MSE Listings Requirements and the Companies (Panel on Takeovers and Mergers) Rules 2016. On conclusion of the offer period, an application will be made to the Malawi Stock Exchange to list the shares of FMBCH and delist the shares of FMB.

Acquisition of a controlling shareholding in Barclays Bank Zimbabwe Limited

Further to the above, the Directors also advise that FMB is engaged in exclusive discussions with Barclays Bank PLC (“BB PLC”), in relation to the potential acquisition of its interests in Barclays Bank Zimbabwe Limited (“BBZ”). Discussions with BB PLC are ongoing and may or may not result in the announcement of a transaction involving the acquisition by FMBCH of the interest of BB PLC in BBZ. Such transaction would also be subject to obtaining approval of the banking regulators in Malawi and Zimbabwe.

The Directors therefore advise shareholders of FMB and the public to exercise caution and to consult their professional advisers when dealing in the shares of FMB. Further announcements will be made in due course.

By order of the Board

Oswald Mtokale
Company Secretary

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REVIEW OF THE YEAR

The macro-economic shocks of 2015 in Malawi, Mozambique and Zambia continued to be felt at the beginning of 2016. The major challenges included drought and reduction in agricultural production in Malawi and Mozambique, electricity shortages in Zambia and Malawi, and the discovery of previously undisclosed state linked foreign debt in Mozambique. In all these countries central banks adopted very tight monetary policies manifested in high domestic interest rates, which initially stabilized currencies and then led to their appreciation. Inflation reduced as the year progressed and, in response, central banks began the easing of interest rates. These factors, combined with increases in hard commodity prices and good rains at the end of 2016, make the outlook for 2017 significantly brighter in these countries. Needless to say, this environment posed challenges for the banking sectors in all these countries. Botswana was the exception amongst our territories of operation as it continued to enjoy relative macro-economic stability throughout the year.

Notwithstanding these adverse economic conditions, the group posted profit after tax of K7.66 billion, representing an 80% increase from 2015. Robust business growth and cost reduction strategies implemented across all markets resulted in this significant improvement in profitability in all countries. Total group assets increased to K327 billion from K262 billion representing 25% growth. Net loans by the group grew by a lesser 21% to MK126.5 billion due to the even more conservative lending practices which we adopted. Customer deposits recorded 18% growth over the previous year with the group continuing to pursue its strategy of building transactional balances and reducing expensive term deposits.

Even after suffering equity revaluation losses of MK1.4 Billion on our Malawi Stock Exchange listed investments, our non-funded income during the year improved by 59% year on year due to increased transaction banking activities. During the year US$10 million subordinated debt was replaced with local currency debt in order to remove related exchange rate risks. Despite significant increases in staff pay levels, persistent power outages with resultant unbudgeted generator running costs and increased tariffs on utilities and services, total operating expenses were kept in check with a 30% growth year on year, and our cost/income ratio improved from 71% to 65%.

Dividend

A final dividend for 2015 of K467.25 million (20 tambala per share) was paid during the year, but interim dividends have not been declared in 2016 in order to build up capital to permit exploitation of growth opportunities. In view of better than expected profits, the directors have recommended a final dividend of K 1,168.125 million (50 tambala per share) for approval at the forthcoming Annual General Meeting.

Outlook

The improved economic outlook in all the countries where we operate is expected to underpin growth in our business volumes and contribute positively to the group’s performance in 2017.

By order of the Board,

Dheeraj Dikshit – Group Managing Director
Michael Kadumbo – Chief Finance Officer

Related download

• FMB FY2016 financial results.pdf

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Notice is hereby given that the 21st Annual General Meeting of the company will be held at the FMB Training centre on 6 June 2017 at 15:30 to transact the following business:

1. Approval of minutes of the last Annual General Meeting
   To approve the minutes of the 20th Annual General Meeting held on Friday, 18 May 2016.
2. Audited financial statements
   To receive and adopt the audited financial statements for the year ended 31 December 2016 together with the reports of the auditors and directors thereon.
3. Dividend
   To approve a final dividend of MK1,168.125 million (50 tambala per share) be paid in respect of the financial year ended 31 December 2016.
4. Directors
   4.1 To re-elect as director Mr Hitesh Anadkat who retires by rotation but being eligible offers himself for re-election.

   4.2 To re-elect as director Mr Bharat Jani who retires by rotation but being eligible offers himself for re-election.

   4.3 To re-elect as director Mr Rasik Kantaria to serve until the next Annual General Meeting in compliance with the Companies Act, 2013 which requires annual election of persons above the age of 70.

   4.4 To elect Ms Abena Foster as a non-executive director. Ms Abena Foster graduated from King’s College London with an LLB Law (Hons) in 2004 and was admitted to membership of the New York Bar in 2009. Prior to returning to Malawi, Ms Foster worked with leading legal firms and financial institutions in London specialising in the area of regulatory compliance and corporate governance. She currently works with Foster Lewis Consulting LLP, a financial services and business advisory firm which she co-founded.

   4.5 To elect Ms Constance Musopole as a non-executive director. Ms Constance Musopole graduated from the University of Malawi, The Polytechnic in 1996 with a Bachelor of Accountancy degree and is a Chartered Accountant with membership of ACCA and ICAM. She is currently the Chief Finance Officer of Lafarge Cement Malawi. Ms Musopole has worked with Lafarge in various finance roles in Zambia and Malawi since joining the group in 1997.

   4.6 To confirm the remuneration of the directors including executive directors for the year ended 31 December 2016 and to authorise the non-executive directors to determine the remuneration of the executive directors for the forthcoming year.

   4.7 To fix fees and sitting allowances for the Chairman and other non-executives for the year ending 31 December 2017.

   4.7.1 Directors’ fees

   i. Chairman from MK4,200,000.00 to MK5,040,000.00.

   ii. Other non-executive directors from MK3,675,000.00 to MK4,410,000.00.

   4.7.2 Sitting allowances
   iii. Chairman from MK262,500.00 to MK315,000.00.

   iv. Other non-executive directors from MK210,000.00 to MK252,000.00.

5. Auditors
   5.1 To approve the payment of audit fees of MK69,318,100.00 to Deloitte in respect of the audit of the financial statements for the year ended 31 December 2016.

   5.2 To approve the re-appointment of Deloitte as auditors for the year ending 31 December 2017.

6. Other business
   To transact such other business as may be transacted at an annual general meeting of members.

Oswald chifundo Mtokale
Company Secretary

Related download

• FMB 2016 Abridged annual report

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DEAR SHAREHOLDERS
The year here reviewed was in almost all respects a remarkably positive one for the Group, a year of solid, often exceptional, achievements, all of which augured well for FMB’s future. In 2016 our operating context remained challenging in the extreme with Malawi, Mozambique and Zambia continuing to feel the adverse effects of the economic setbacks suffered in the previous year. In all of our markets growth was well shy of that of recent years, economic activity and investment being negatively affected by drought and depressed commodity prices. In Mozambique investor sentiment was rocked by revelations concerning previously undisclosed national debt and electricity shortages hampered growth prospects in Malawi and Zambia. Only in Botswana did we begin to see a resumption of growth and a material strengthening of the national currency.

In Malawi, Mozambique and Zambia inflation remained stubbornly high and above 20% for most of the year. Interest rates persisted at concomitantly elevated levels, thus increasing the cost of borrowing. In both Malawi and Mozambique our interest expense rose by over 100% though in the case of Malawi, this derived largely from our decision to replace dollar-denominated debt with kwacha-denominated borrowings, albeit at effectively higher rates.

PERFORMANCE IN THE FACE OF ADVERSITY

As the Group Managing Director explains in his message, the robust performances recorded by each of our operations were all the more commendable given the strong economic headwinds facing the various countries of the region.

These performances speak, I believe, to the strength of our board and of management, both at group level and at all of
our various operations, the dedication of our staff and the evolving strength of both our systems and our strategy. Even the most cursory reading of FMB’s 2016 financial reports will disclose the fact of our having restated 2015 information in our balance sheet and income statement. As the Key Audit Matter in this annual report makes clear, this restatement derives from our decision (with which the external auditors concurred following an extensive evaluation) to consolidate the financial statements of what were previously our associates, Capital Bank Botswana and First Capital Bank of Zambia. This is not the place to elaborate on this decision beyond stating that it reflects the reality of our control over these key FMB Group operations and, almost coincidentally, that this decision accorded precisely with the Reserve Bank of Malawi’s draft consolidated-reporting requirements for purposes of capital assessment. Our 2016 performance against almost all key indicators was outstanding, notwithstanding this restatement.

CREATING VALUE FOR ALL

In saying that we will benefit customers and employees in Zimbabwe, we can state without fear of contradiction that FMB has an extremely proud record of adding value to the lives of the people associated with it and to the communities in which it operates. For 21 years we have consistently rewarded our investors while, equally, rewarding our employees. In 2016 we spent MK80.8 million on developing our people’s skills, at the same time helping deserving causes in our communities…

Related download

• 2016 Annual report
  

  The post FMB | Release of 2016 annual report appeared first on First Merchant Bank Limited (FMB).

Corporate Restructuring

Further to the Cautionary Statement issued by the Board on 28 March 2017, the Directors of First Merchant Bank PLC (“FMB”) wish to advise their shareholders and other stakeholders that the process to restructure the company is still ongoing. An offer document to transfer all shares in FMB to FMB Capital Holdings Plc (“FMBCH”), a company incorporated in Mauritius, will be issued in the coming weeks. On conclusion of the offer period, an application will be made to the Malawi Stock Exchange to list the shares of FMBCH and delist the shares of FMB.

Acquisition of a controlling shareholding in Barclays Bank Zimbabwe Limited

Further to the above, the Directors of FMBCH are pleased to announce that, following negotiations between FMBCH and Barclays Bank PLC (“BBPLC”), an agreement has been signed between BBPLC and FMBCH, pursuant to which FMBCH will acquire the BBPLC’s majority shareholding in Barclays Bank of Zimbabwe Limited (“BBZ”), subject to certain terms and conditions (“the Transaction”).

BBPLC and FMBCH are in the process of fulfilling the conditions precedent to the Transaction. Shareholders and the public are therefore advised that the Transaction is subject to statutory, regulatory and other approvals and, as such, they should continue to exercise caution and to consult their professional advisors when dealing in the shares of FMB.

Further details regarding this Transaction will be made available in the circulars of FMB and BBZ to be published in due course.

By order of the Board

Oswald Mtokale
Company Secretary

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The FMB sponsored Leslie Sevens Rugby Tournament will be launched on Saturday the 24th of June, 2017 at the Blantyre Sports Club. FMB has for the past four years been sponsoring the Leslie Sevens Rugby tournament, playing its role in development of minority sports in the country.

The Leslie Seven’s Rugby Tournament was established by Wilfred John Leslie Snr, a Blantyre City Councilor in 1948.

The first trophy was won by his team, Blantyre Sports Club which was captained by his son, Jock Leslie.

This tournament is comprised of teams that are made up of seven players playing seven minute halves, instead of the usual 15 players playing 40 minute halves.

This year FMB will co-sponsor the tournament with FES, one of their corporate customers.

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In terms of the listings requirements of the Malawi Stock Exchange Limited, a listed company is required to publish a trading statement as soon as it is satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported upon next will differ by at least 20% from the financial results for the previous corresponding period.

First Merchant Bank PLC accordingly advises that its forecast profit attributable to shareholders for the six months ending 30th June, 2017 is expected to be at least 60% higher than achieved for the six months period ended 30th June, 2016. The information on which this trading statement is based has not been reviewed or reported on by the Company’s external auditors.

The summary consolidated and separate financial statements of the company for the six months period ending 30th June, 2017 are expected to be published in the press in August 2017.

Oswald Mtokale
Company Secretary

27th June 2017

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First Merchant Bank pledges to continue Opportunity International’s legacy of promoting financial inclusion

LILONGWE AND CHICAGO – 27 June 2017 – First Merchant Bank (FMB) has announced that it has agreed with the U.S., U.K. and Canadian affiliates of Opportunity International to acquire their ownership of Opportunity International Bank of Malawi (OIBM), the global microfinance network’s banking operations in Malawi.

The transaction is the second major corporate action announced by FMB this year, following its recent acquisition of a majority stake in Barclays Bank of Zimbabwe. FMB has operations in four southern African countries and total assets (at the end of 2016) of K327 billion. The OIBM transaction is subject to regulatory and statutory approval by the Reserve Bank of Malawi and the Competition and Fair Trading Commission of Malawi.

In his remarks at the announcement of the agreement in Lilongwe, FMB’s Chairman, Hitesh Anadkat, promised that OIBM’s 400 000+ customers would be seamlessly integrated into FMB while enjoying even wider access to banking services, products and infrastructure. “This is a historic development for all of us at FMB, for Opportunity International and, most importantly for the hundreds of thousands of Malawians who have come to depend on OIBM for small-scale transactional, savings and loan services,” Anadkat said. “In welcoming these individuals, professionals, merchants and small and medium-sized enterprises (SMEs) to the FMB family, we commit ourselves 100 percent to continuing the excellent work OIBM has done over the last 14 years in promoting financial inclusion and social impact in Malawi.”

Speaking at the announcement of the transaction in Lilongwe today, Frazer Hume, the Chairman of the Board of OIBM, said: “Opportunity International’s Malawi affiliate, OIBM, has been a pioneer in Malawi since it opened its doors as a regulated commercial bank in 2003. The philanthropic support of OIBM by Opportunity International and its supporters over the last 14 years has gone to serving people living in poverty, and serving them well.”

He thanked the outstanding members of the OIBM team for the impact of their hard work on economically marginalized Malawians. “At the start of our work we innovated and brought savings – and loans – to hundreds of thousands of people who had no access to those services by using innovative technologies, such as mobile phone banking, mobile banks, biometrics, and smart cards to help people living in poverty gain access to financial services. It’s now time to use the platform we’ve built to extend and expand our reach to even more people by bringing in additional capital and expertise to further our mission. This agreement not only allows Opportunity International to accelerate growth and expand our impact and effectiveness in Malawi, but also enables us to focus more time on our core strength of developing innovative financial products and services which enable families living in poverty to earn a sustainable livelihood and achieve a life free from poverty, with dignity and purpose. Opportunity International is moving towards operating banks in partnership with other financial institutions focused on financial inclusion to maximize its leverage and impact and end extreme poverty in our lifetime.”

Anadkat explained that a key element of the transaction agreement signed between OIBM and FMB provided for Opportunity International continuing to enjoy access to a (strengthened) platform from which it can keep delivering its social impact programmes across Malawi. “This is tremendously good news for Malawi and for OIBM customers,” Anadkat said. “It’s precisely because of the large investments FMB has recently made in a world-class, extremely robust but adaptable IT platform that OIBM customers will be quickly and easily transferred to FMB. Opportunity International will be able to tap into our infrastructure and our network to continue adding great value to our country.”

Anadkat predicted that FMB investors, customers and staff would derive “a great many” benefits from the transaction. These, he said, would include an expanded branch/agency/ATM network supported by a substantial agent banking platform of OIBM. “OIBM’s agencies are woven into the fabric of Malawian society; often they are very small businesses that enjoy trusted on-the-ground relationships with local communities. We will be looking very closely at the OIBM agency network to see how we can adapt and extend this intimate form of service delivery to assist our clients in Malawi and elsewhere,” Anadkat said.

Another exciting prospect for FMB, he said, related to OIBM’s strength in agri-finance. “I have no doubt that we will learn a great deal from our new OIBM colleagues about this sector and about how to carry out FMB’s strategic intent of growing our structured finance business with, especially smallholder farmers.”. He added that OIBM’s many savings account holders would bolster FMB’s transactional banking strategy while merging the two entities would unlock significant economies of scale.

About First Merchant Bank

First Merchant Bank Limited (FMB) is a public limited liability company incorporated in Malawi under the Malawi Companies Act, 1984. It is registered as a commercial bank under the Banking Act 2010 and was listed on the Malawi Stock Exchange in June 2006. It has two wholly-owned subsidiaries incorporated in Malawi, The Leasing and Finance Company of Malawi Limited, a licensed financial institution engaged in deposit taking and asset finance, and FMB Capital Markets Limited, a licensed portfolio manager. FMB also holds a 70% shareholding in Capital Bank Limited, a licensed commercial bank incorporated in Mozambique, a 38.60% shareholding in Capital Bank Limited, a licensed commercial bank incorporated in Botswana, and 49% in First Capital Bank Limited, a licensed commercial bank incorporated in Zambia. Find out more at www.fmbmalawi.com or by following @fmb_malawi

About Opportunity International

Opportunity International is a global non-profit organisation that helps people in developing countries work their way out of poverty. Founded in 1971, the organization has provided more than $10 billion in loans to help clients launch and expand businesses, feed and educate their children and create jobs in their communities. At the end of 2016, more than 10 million clients in 22 countries across Africa, Asia, Latin America and Europe were using an Opportunity International loan, savings account, insurance policy or training to improve their lives. Through microfinance and complementary products and services in education, agriculture and health, the organisation has helped clients create or sustain 17 million jobs on its way to achieving its goal of 20 million jobs by 2020. More than 95% of Opportunity’s loan clients are women who would otherwise likely not have access to financial services because of legal and cultural gender inequities. The global headquarters of Opportunity International are in Chicago, with other key offices in Australia, Canada, Germany, Hong Kong, Singapore, Switzerland and the United Kingdom. The organisation serves clients through a network of more than 23 000 people worldwide. Discover more at opportunity.org or oibm.mw/index.html, or join the conversation on facebook.com/opportunityintl and twitter.com/opportunityintl

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The 2017 FMB sponsored Hockey leagues are set to commence this Saturday 22nd July at Chichiri hockey stadium. FMB has been sponsoring the 8 and 11-aside Hockey Leagues since 2013 and this year adds another milestone to the sponsorship. Through supporting hockey, FMB will continue to assist in developing the already impressive talent which the Malawian hockey players possess.

Over the years FMB has continued sponsoring various sporting disciplines including football, rugby, basketball, golf and hockey; with these sponsorships, FMB aims to have a notable impact on the development of sports in Malawi, with the objective of enabling Malawian teams compete at an international level. This year FMB expects both the women’s and men’s categories to be even more competitive than in previous years.

Total sponsorship towards the hockey leagues this year is MK2.5 million, and we hope the popularity for the sport in our communities continues to grow.

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The shareholders of First Merchant Bank Plc, at the Annual General Meeting held on 6th June, 2017, approved the of a final dividend of 50 tambala per share (MK1,168,125,000) for the financial year ended 31st December, 2016.

Members whose names will appear in the register as at close of business on Friday, 4th August, 2017 will be eligible for this dividend payable on Friday, 11th August, 2017.

The register will be closed from Monday 7th August, 2017 to Wednesday 9th August, 2017 (both days inclusive) during which time no transfers will be registered.

OSWALD MTOKALE
COMPANY SECRETARY

The post FMB | Notice of final dividend in respect of year ended 31 December 2016 appeared first on First Merchant Bank Limited (FMB).

Pursuant to the Companies (Panel on Take Overs and Mergers) Rules 2016, Rule 13, the Board of Directors of First Merchant Bank Plc (“FMB”) advises that it has received notification from FMB Capital Holdings Plc (“FMBCH”), a company incorporated in the Republic of Mauritius and registered in Malawi as a foreign company, of its firm intention to make a takeover offer for the entire issued share capital of FMB.

FMBCH will through an offer document to be issued to FMB shareholders propose a takeover scheme whereby FMBCH offers to the shareholders of FMB to acquire their shares in exchange for shares in FMBCH. One share in FMB will be exchanged for one share in FMBCH and no cash option will be offered (hereinafter referred to as the “Offer”). The Offer is being made by FMBCH alone and it is not acting in concert with any other party. At the date of the Offer FMBCH does not have any shareholding in FMB.

The current stated share capital of FMBCH is 100 ordinary shares of no par value held by Minerva Nominee One Limited as nominee for Magni Holdings Limited. Magni Holdings Limited in turn holds these shares as nominee and trustee for the intended shareholders of FMBCH as and when the proposed Offer is accepted by the shareholders.

The shareholder of FMBCH and FMBCH Board have resolved that in the event the Offer becomes unconditional, FMBCH will issue such number of new ordinary shares in FMBCH as are required to satisfy the Offer. The directors of FMB have confirmed that they intend to accept the Offer for the shares that they own directly and will endeavour to procure acceptance of the Offer by entities in which they have a beneficial interest.

Conditions of the Offer
The Offer is conditional upon FMBCH having received acceptances in respect of voting shares which together with voting shares acquired and agreed to be acquired before or during the Offer will result in FMBCH holding more than 50% of the voting shares of FMB. The Offer is also conditional upon the admission of the shares of FMBCH to the official list of the Malawi Stock Exchange.

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On Saturday 5th August, 2017 FMB launched its sponsorship of the monthly mug at Kasasa Golf Club in Dwangwa, Nkhotakota District. The launch was marked by a golf tournament which attracted golfers who are members of Kasasa Club and its surrounding areas.

The event attracted over 30 golfers who graced the greens as they teed-off with a shot gun start in a medal format. After the tournament an awards ceremony was held to celebrate the outstanding competitors in the tournament. Gurtej Nain came first in men’s category with Mphatso Mtambo coming second and Dan Mvula third; all winners went away with cash prizes.

The ladies equally shined in the women’s category with first position going to Lusayo Sibale and Chimwemwe Chavula coming second.

FMB’s sponsorship of the monthly mug is testament of the good relations that exist between FMB and Illovo along with their subsidiaries Ethanol / Ethco.

The sponsorship of the Kasasa Golf Club monthly mug further highlights FMB’s continued support of golf which is an interactive and disciplined sport. It gives FMB staff a chance to interact with their clients in a more relaxed setting; the clients themselves also take the opportunity to network and strike business deals in such settings.

This sponsorship is among one of FMB’s many sponsorship of various sports disciplines in Malawi, some of which include: football, hockey, rugby, cricket and basketball.

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REVIEW OF THE PERIOD

The macro economic environment in the four countries in which the group operates continued to be challenging in the first half of 2017, with Mozambique experiencing default in its sovereign debt. However there are signs of recovery and stability in Malawi and Zambia as evidenced by Kwacha stability in both countries and a downward trend in inflation and bank rate especially in Malawi. Strong and prudent fiscal management continue to underpin the economic stability in Botswana. Central banks in all countries are focusing on price stabilization and supporting domestic demand to guide them in their monetary policies.

Robust performance in Malawi, Zambia and Botswana has underpinned growth in the group’s half year profit after tax of K5.03 billion, representing a year on year growth of 79% from June 2016. Deposits grew by 21% with the group continuing to focus on reducing cost of funding by growing its current and savings accounts. Assets for the group have grown to K365 billion year on year with a significant growth registered in money market investments.

The group is closely monitoring the operating environment to ensure that it is well positioned to take advantage of opportunities that will arise without taking unnecessary risks that might negatively affect its capital position and shareholder wealth. In view of this, the loan book grew by 21% with excess liquidity invested in low risk money market instruments. The 22% growth in group’s interest income has therefore been largely driven by growth in earnings from money market investments.

Non-interest income has grown 35% year on year against the backdrop of increased transactional banking income and a rebound in the group’s investments in the listed equities. Costs for the period grew by 9% and cost to income ratio for the group decreased to 58% from 70%, a testament of the group’s policy to contain costs.

OUTLOOK

We remain optimistic of continued improvement in macroeconomic environment in all countries in the short to medium term. This will have a positive impact on the group’s performance for the rest of the year.

DIVIDEND

The Directors have decided that a first interim dividend will not be paid. This decision has been made in an effort to maintain a strong regulatory capital position considering the restructuring process that the company is currently undergoing.

By order of the Board,

Dheeraj Dikshit – Group Managing Director
Michael Kadumbo – Chief Finance Officer
Hitesh Anadkat – Chairman

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FMB, at the beginning of this week, rolled out a ‘Back to School’ money transfer campaign under its Hello Paisa money transfer platform to encourage both its customers and non-customers to receive funds from South Africa through the Bank. During the Back to School campaign everyone who receives funds through Hello Paisa at FMB from as low as K28,000 going up will receive a free ‘back to school’ item.

The promotion is timely as schools especially at primary school level are this week resuming classes marking the beginning of a new academic year. Customers transacting on the Hello Paisa platform during the campaign who receive any amount from MK28,000, will receive a ‘back to school’ goodie ranging from pencil cases, writing materials, lunch boxes to back packs, as long as the transactions take place within the campaign period, and for as long as stocks remain available.

The campaign started on Monday (4th September) and will run up to 16th October 2017.

People are encouraged to send funds to Malawi from South Africa through Hello Paisa as it is does not give limitations on the amount of money one can send to Malawi; it is also the most secure and instant channel of ensuring that funds get to the rightful beneficiaries in a timely manner.

Anyone can receive funds through Hello Paisa at FMB on presentation of valid proof of identification; FMB has a wide network of branches and agencies through which beneficiaries can get Hello Paisa transactions processed.

FMB has been processing Hello Paisa transactions for more than two years now, during which period transactions have more than quadrupled in volumes.

The post Hello Paisa – FMB “back to school” campaign appeared first on First Merchant Bank Limited (FMB).