[2008-07-24]  RBM grants FDH banking licence
FDH Group on Tuesday said it will set up a merchant bank by March next year after the Reserve Bank of Malawi (RBM) approved and issued a banking licence to the Group on last Tuesday morning.

RBM issued the FDH Group with licence number 0024 for the FDH Merchant Bank Limited.

Breaking the news, a visibly happy FDH chief executive officer Thomson Mpinganjira said in an interview in Blantyre on Tuesday that following this development a restructuring of the holding company will take place and a new holding company, FDH Financial Holdings Limited, will be formed.

Mpinganjira said the new holding company will hold 100 percent shares in First Discount House (FDH), FDH Stockbrokers Limited and FDH Merchant Bank Limited.

"We expect to start FDH Merchant Bank Limited operations by 1 March 2008. We have already identified a place and we are talking with one of the shareholders, Old Mutual, to give us offices for the bank.

"One of the things that we will be doing now is that we will be restructuring as a group so that there is a holding company. There will be a series of meeting this week to see how we can go forward. The launch of the new bank will depend on how fast we will move. But we have the money ready and RBM is aware that we have the money handy," he said.

Mpinganjira said FDH has met all RBM’s requirements including raising the minimum initial capital of US$1.5 million (about K215 million).

He said that FDH and its shareholders have also solely managed to raise the expected initial capital of K300 million for the merchant bank.

The Group embarked on a capital raising initiative by planning to list on the Malawi Stock Exchange (MSE) in August this year before shelving the plans.

"We have pumped in the money ourselves. So far, we have spent over K214 million on this initiative if we include the K25 million we spent on our preparations to list on the stock exchange. We plan to inject another K300 to K400 million in the first three to six months of the bank [being in operation]. The money will be used to lend. Our target is small-scale entreprenuers [SMEs]," disclosed Mpinganjira.

FDH Merchant Bank Limited is expected to employ about 20 people in its first year of operations and employ extra 15 employees in the second year, according to Mpinganjira.

Currently the Group employees 20 people at First Disount House and FDH Stockbrokers Limited in Blantyre.

Commenting on the coming of a merchant bank, the Bankers Association of Malawi (BAM ) on Tuesday said the new development was an indication that the country’s economy was growing.

"It’s good news! It’s a new baby and we at BAM are excited about it. FDH is not new on the financial market,. They are members of BAM and we wish them good progress as they continue to diversify," said Fanuel Kumdana, BAM’s executive director.

FDH is owned by Kingdom Financial Holdings Limited of Zimbabwe which has 40.16 percent, TF Mpinganjira Trust with 39.84 percent and Old Mutual plc which ahs 20 percent shareholding.

FDH was expected to list on the MSE this year and had plans to raise US$1.8 million (about K252 million) for setting up the merchant bank (See story titled Why FDH did not list on page...).

FDH started operations in 2002 having been licenced a year earlier. It was the second discount house after Continental Discount House which was established in 1998.
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