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Mist surrounds the authenticity of the ‘Bank of The Year award’ which First Merchant Bank (FMB) has been winning for the past three consecutive years.
Some members of the banking sector have since described the honour as not reflecting the capacity and capability of the awarded banks.
Banking industry sources familiar with the ‘Bank of the Year award’ by The Banker magazine said organisers of the international award usually send out forms to interested banks across the world to fill-in forms and pay an entry fee of about K2.1 million (US$20,000).
A senior banker said one cannot judge the performance of a bank by looking at forms in an office.
The banker said deposit and lending levels and infrastructure also need to be considered.
“When you pay the US$20,000 the next step is for you to fill the forms and indicate your management team, directors and the balance sheet, that’s all,” said the banker.
But The Banker magazine, established in 1926 and published by the United Kingdom-based Financial Times’ business section, said in one of its editions that emphasis is based on the questionnaires sent to 750 banks nominated based on results, achievements, technology initiatives and overall strategy.
“The Bank of the Year award is decided by a global editorial team and reflects not only latest results and performance data but also information provided by institutions nominated in each category and country,” explains The Banker.
In Malawi, FMB has won the award for three consecutive years from 2002 to 2004 while Commercial Bank of Malawi—now Stanbic Bank— won the award in 1998.
FMB marketing manager George Kamvulumvulu yesterday defended the award.
He said it was a true reflection of the situation on the ground because his bank has been a leader in innovations in the country.
He said the award’s authenticity is proved by the fact that this year seven out of the country’s 10 commercial banks entered the competition and FMB emerged the best after edging out “a big and respectable bank” by three points.
Kamvulumvulu said FMB has also got wind of the concerns from rival banks and some anonymous letter writers who, he said, have cautioned the bank that it was “wasting money and time flighting adverts in newspapers about the award.”
He said one writer further wrote that the defunct Malawi International Transport Company (Mitco) won a similar international award of excellence and good performance but closed shop the following year.
But Kamvulumvulu said the award has boosted FMB’s business through international publicity by The Banker magazine, a development he said has contributed to the nine-year old bank’s growth.
“While other people are disputing the award, it has helped us to gain mileage in our business,” he said.
Kamvulumvulu said international banks such as Standard Bank Group, the parent company for Stanbic Bank Malawi, ABSA Bank of South Africa, Barclays, Citigroup, HSBS and JP Morgan could not have been joining the competition if it were cheap.
On its website www.thebanker.com, The Banker said what caught the judges’ attention was FMB’s growing success at exploiting synergies and cross-selling opportunities between the core banking operations and the bank’s lease financing, corporate finance and asset management operations.
This year, The Banker, among others, named Barclays Bank Kenya, Barclays Botswana, Standard Bank Group in South Africa, Standard Chartered Bank of Zambia, Standard Bank Lesotho and Stanbic Bank in Zimbabwe as banks of the year in their respective countries.
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