Dar es Salaam. A merger between the TPB Bank and the TIB Corporate Bank is currently in the pipeline, it has been confirmed.
If it goes through as planned, this would be the third merger involving TPB after Twiga Bancorp Bank and Covenant Bank mergers. Tanzanians woke up on Friday morning to get reports of the merger which were circulating on social media after an unknown staffer leaked a memo signed by the TPB Bank CEO, Mr Sabasaba Moshingi, informing his staff about the subject.
Officials who talked on conditions they were not named confirmed the merger - but said that the move needed to be announced by the Bank of Tanzania (BoT) who, as the central bank, were the authorised spokespersons. In any case, the merger process was still in its early stages. “We only communicated the matter with our staff because gossip had become rife on the subject and we wanted to assure them that, despite the proposed merger, their jobs were safe,” said one of the officials. The Tanzania Union of Industrial and Commercial Workers (Tuico) reportedly advised TPB to communicate the matter to the workers.
The leaked memo was dated January 14, 2020- and was headed ‘Information on the merger between TPB Bank and TIB Corporate Bank.’
The memo congratulated the bank’s entire staff for attaining the best performance ever since the bank was established, and it made a profit-before-tax of Sh20 billion. It further stated that the government had made the decision to merge both banks with the aim of making it a larger bank that would implement the government’s objectives - and, at the same time, expand the network of financial products and services to both large and small customers. The memo went on to assure the employees that the merger would not adversely affect their employment and they should continue their work. Other senior banking officials also confided that the The Tanzania Agricultural Development Bank (TADB) was also poised to merge with TIB Development bank in line with the apparent government policy. Contacted on the matter, BoT was not ready to speak on either of the news.
On the other hand, a University of Dar es Salaam economist, Abel Kinyondo, said the merger was a positive decision for banks that have minimal capital because it creates stability and certainty.
However, he said a better solution for such a problem was to look at the fundamentals of the economy before deciding on a merger. This is so as to understand why they were failing, and come up with a sustainable solution.