Leasing and Finance Company, Standard Bank, INDEbank, National Bank of Malawi: From Owings Chawanda

LEASING AND FINANCE COMPANY LIMITED (LFC)
Leasing and Finance Company (LFC) has passed the stage where it would be described as history in the making; it is history.
The institution was established to provide asset and real estate loans on flexible collateral terms, and won the hearts and acclaim of people looking for the easy way out on real estate investments.
In a way, it could be argues that LFC influenced the conversion of New Building Society into a bank, christened NBS. Now, NBS is listed on the Malawi Stock Exchange.
How did Leasing and Finance Company, a relatively nascent company, bulldoze the elephant that was New Building Society into turning to real time banking? The story cannot be separated from the history of mortgage in Malawi.
For a long time, New Building Society enjoyed some monopolistic advantage, making it the only option for mortgage needs for over three decades. When multiparty politics of government came in 1994, after the June 14 Referendum on whether people wanted multiparty democracy of a continuation of the one party regime, things changed.
Market liberalization became the buzzword. So came other mortgage service providers, including Leasing and Finance Company Limited.
Actually, Leasing and Finance Company did not fall from the sky; it (the idea to establish it) originated right here in Malawi, within the corridors of National Bank of Malawi (NB).
In short, LFC was a subsidiary of NB.
At least until some two years ago when NB Board of Directors decided to make a strategic move. The Board reached a consensus to get rid of LFC as a subsidiary and make it a Division within the Bank.
And so died the history of the name Leasing and Finance Company. It its stead came Asset Finance Division, the successor of what remained (in terms of property) of LFC.
But the Asset Finance Division still maintains LFC’s portfolio of products, which include real asset/estate finance.
Though LFC moved from Chayamba Building in Blantyre (where Izwe Loans now operates) and now occupies the second flour of NB’s Henderson Street (Blantyre Main), it maintains the same staff members.
And nothing has really changed because LFC had blue corporate colours. So does NB.
Like father like son; only that the son has gone back to the father’s nest.
Opportunities for asset finance borrowing exist in Asset and Finance, though companies wishing to enjoy these facilities must have sound collateral.

NATIONAL BANK OF MALAWI (NB)
National Bank of Malawi was established in 1971 after the meager of Barclays Dominion Colonial Oversees (DCO) and Standard Bank., which had its origins in the Republic of South Africa.
The merger of the two companies brought together complementary operations and helped the Bank provide a countrywide range of products and financial services.
Today, NB is Malawi’s leading bank, with a network of 25 service centres. Plans are in the offing to increase the number of these centres in strategic areas.
The Bankers Association of Malawi, whose chairperson in National Bank of Malawi’s Chief Executive Officer George Partridge, has been imploring local banks to establish shop in rural areas as well as under-banked communities.
NB has shown willingness to play ball, with the establishment of, at least, three branches in areas deemed out-of-focus by most financial institutions.
NB was listed on the Malawi Stock Exchange on August 21, 2000 with an over-subscription of 3.4 times.
The Banks shareholding, as at December 31, 2009, is as follows:
Press Corporation Limited: 51.8%
Old Mutual Group: 25.0%
Members of the Public: 22.0%
Employees (ESOP): 1.2%.

The Bank has 9 directors comprising 7 non-executive and 2 executive directors.
The non-executive directors are mainly appointed by main shareholders, Press Corporation, to provide strategic direction and control of the bank.
Opportunities for investors wishing to own shares exist through the Malawi Stock Exchange.
Those who can influence the bank include Press Corporation Limited, the main shareholder, and Reserve Bank of Malawi governors.
Currently, the bank is constructing a headquarters in Blantyre, and opportunities exist in infrastructure development for the bank. Construction firms stand a good chance of winning contracts.
There are also investment opportunities for computer and other IT equipment providers.

INDE BANK
INDEbank (as the owners write it) is a registered financial institution under the Banking Act of 1989, and is engaged in commercial banking business.
INDEbank has partner organisations in AMSCO and DEG, which have built the human resource capacity of the Bank.
It also has partnership relationships with the African Export Import Bank (Afrexim-bank) and the Development Bank of Southern Africa (DBSA). These have helped INDEbank in positioning itself to support Malawian exporters in medium term project financing.
INDEbank runs a number of subsidiaries. These are:
1. Indetrust Holdings Limited: 51% control. Nature of operations including renting out of property e.g. INDEbank House, Blantyre
2. Indetrust Limited: 100% ownership. It is a pension fund manager (Dormant company)
3. INDEbank Financial Services Limited: 100% ownership. Nature of operations- Dormant company.

The Bank has four branches and two agencies. Three branches are in Blantyre and one in Lilongwe.
The two agencies are in Mponela (Central region) and Luchenza (Southern region).
The INDE group f companies has exposure to the following risks from its use of financial instruments:
1. Credit risk
2. Liquidity risk
3. Market risks
4. Operational risks, and
5. Currency risk

The group has been making steady profits, averaging 177 million pre-tax during the past two years.
Opportunities exist to invest in INDE group but the problem is that most of the subsidiaries are doing the same work that would be done by contractors, thereby cutting out on private sector opportunities.
Government and Press Corporation Limited (not forgetting Reserve Bank of Malawi) have influence over the group.

STANDARD BANK LIMITED
Standard Bank is a comeback kid. Only that the kid never wants to go back home; he establishes his own household, instead.
The name Standard Bank is not new in Malawi. The company was there in the 1970s, before it merged with Barclays Bank Dominion Colonial Overseas (DCO) in 1971 to form National Bank of Malawi.
The merger of the two banks was good for Malawi, as it brought financial services to a large chunk of the national population. And so the name Standard Bank disappeared in Malawi, only to appear again after the year 2003.
Standard Bank (South Africa) bought majority shares in the then Commercial Bank of Malawi (CBM), which converted Commercial Bank of Malawi into Standard Bank.
In other words, Standard Bank helped make what we now call National Bank of Malawi and disappeared. When time came to re-set shop in Malawi, Standard Bank (the new kid) never wanted to go back home (buy National Bank of Malawi) but establish its own household in CBM.
The Standard Bank Group’s Global Leadership Centre (GLC) plays an important role in developing excellence among executive and operational leadership. The GLC offers internationally designed management development programmes aligned to global best practices.
In 2008, for example, William le Roux, Head of Corporate and Investment Banking and Robert Otieno, Head of Global Markets, finished their terms of secondments to Malawi and returned to their home countries: South Africa and Kenya, respectively. Locally trained and groomed locals succeeded them.
The bank has been implementing growth strategies and improved its management information systems, with main focus on Personal and Business Banking, as well as Corporate and Investment Banking.
The bank’s profit after tax has been increasing from K1.3 billion in 2007 to K2.1 billion in 2008. New financial reports have been delayed by auditors but insiders say the bank has not been affected by the global financial crisis and stands to improve on last year’s performance.
Standard Bank has various committees that control various aspects of operations. These include:
1. Board Committees
2. Board Audit Committee
3. Board Credit Committee
4. Credit Risk Management Committee
5. Asset and Liability Committee
6. Executive Committee

The Bank revised its code of ethics in 2007, and the new code is designed to empower employees and enable faster decision making at all levels. This will reduce the delays involved in communicating with South Africa (headquarters).
Alex Chitsime is the bank’s current chairperson.
Opportunities exist in all aspects of financial service provision, but also in infrastructure development.