FDH Bank PR SPECTUS INITIAL PUBLIC OFFER OFFER FOR SALE AND OFFER FOR SUBSCRIPTION Offer for Sale of 979,175,000 Ordinary Shares and Offer for Subscription of 401,031,250 Ordinary Shares at an Offer Price of MWK10.00 per Share and admission to trade on the Malawi Stock Exchange Date of issue: 29th June 2020 A copy of this Prospectus has been delivered to the Reserve Bank of Malawi (‘RBM’) and the Registrar of Companies (‘RoC’) for registration. The RBM and RoC accept no responsibility for the accuracy of any statements made or for the financial soundness of FDH Bank Plc (‘FDH’, the ‘Bank’ or the ‘Company’) or the value of the securities concerned. The RoC registered this Prospectus on 26th June 2020. This Prospectus has been prepared in accordance with Listings Requirements of the Malawi Stock Exchange (‘MSE’). Copies of the Prospectus can be obtained from the Receiving Banks whose addresses are set out in Appendix 3 of this Prospectus , as well as from the Company’s website www.fdh.co.mw/investor from 29th June 2020 up to and including 17th July 2020. The Directors of FDH accept no responsibility for any applications that are, or may be, misdirected. The Directors confirm that the Prospectus includes all such information within their knowledge (or which it would be reasonable for them to obtain by making enquiries) as investors and their professional advisers would reasonably require and reasonably expect to find for the purpose of making an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the issuer and of the rights attaching to the securities to which this Prospectus relates. TABLE OF CONTENTS Corporate information 2 Salient features of the Offer 3 Definitions and Interpretations 7 Part 1 Company overview 11 Part 2 Directors, senior management and corporate governance 15 Part 3 Operating environment: Macroeconomic and sector overview 25 Part 4 FDH’s growth strategy and investment considerations 30 Part 5 Selected financial information 33 Part 6 Management discussion and analysis of the financial condition and results of the company’s business operations 35 Part 7 Risk factors 37 Part 8 Statutory disclosures 42 Appendix 1 Extracts of the articles of association 53 Appendix 2 Reporting accountant’s report 59 Appendix 3 Receiving banks and branches 132 Appendix 4 Terms and conditions of the Offer 135 Appendix 5 Investor application form 139 Appendix 6 Other directorships of board members 141 Appendix 7 MSB Properties Limited 145 Prospective investors should read this Prospectus in its entirety. See ‘Risk Factors’ in Part 7 for a discussion of certain risks and other factors that should be considered prior to any investment in the Shares. EXCLUDED JURISDICTIONS The Offer and the distribution of this Prospectus in jurisdictions other than Malawi may be restricted by law, and a failure to comply with any of those restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, this Prospectus and the Offer do not constitute an offer to issue or sell, or an invitation to purchase, or the solicitation of an offer to buy, any securities in, into or from any jurisdiction in which such offer or solicitation would be unlawful or would require further action in order to be lawful, including, without limitation, in, into or from any Excluded Jurisdiction. To the extent that this Prospectus is sent to any Excluded Jurisdiction, it is provided for information purposes only. Persons in Excluded Jurisdictions may not accept the Offer. No person accepting the Offer should use the mail of any such Excluded Jurisdiction nor any other means, instrumentality or facility in such Excluded Jurisdiction for any purpose, directly or indirectly, relating to the Offer. Persons into whose possession this Prospectus comes must inform themselves about and observe any such restrictions. No actions have been taken, or will be taken, that would permit an offering of Offer Shares to occur outside Malawi. FORWARD-LOOKING STATEMENTS This Prospectus and any document incorporated herein by reference contains statements about the Company that are or may be forward- looking statements. All statements, other than statements of historical fact, are, or may be deemed to be, forward-looking statements, including, without limitation, those concerning: strategy; the economic outlook for the banking industry; cashflows; operating results; growth prospects and outlook for operations, individually or in the aggregate; liquidity, capital resources and expenditure; and the outcome and consequences of any pending litigation proceedings. These forward-looking statements are not based on historical facts, but rather reflect current expectations concerning future results and events and generally may be identified by the use of forward-looking words or phrases such as ‘believe’, ‘aim’, ‘expect’, ‘anticipate’, ‘intend’, ‘foresee’, ‘forecast’, ‘likely’, ‘should’, ‘planned’, ‘may’, ‘will,’ ‘estimated’, ‘potential,’ ‘target,’ or similar words and phrases or other variations or comparable terminology. Examples of forward-looking statements include statements regarding the company’s objectives, a future financial position or future profits, results of operations, cash flows, corporate strategy, estimates of capital expenditures, dividends, or future capital expenditure levels, and other economic factors, such as, amongst other things, interest and exchange rates. By their nature, forward- looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions that forward-looking statements are not guarantees of future performance. The Company’s actual performance, results of operations, financial condition, distributions to shareholders and the development of its financing strategies may differ materially from the forward-looking statements contained in this Prospectus and any documents incorporated by reference herein. Actual results, financial and operating conditions, liquidity and the developments within the banking industry in which the Company operates may differ materially from those made in, or suggested by, the forward-looking statements contained in this Prospectus. Furthermore, prospective investors should keep in mind that any forward-looking statement made in this Prospectus or elsewhere is applicable only at the date of this Prospectus. New factors that could cause the business of FDH Bank or other matters to which such forward-looking statements relate, not to develop as expected, may emerge from time to time, and it is not possible to predict all of them. The Company has no duty, and does not intend, to update or revise the forward-looking statements contained in this Prospectus after the date of this Prospectus, except as may be required by law or regulation. 1 FDH Bank Prospectus CORPORATE INFORMATION AND ADVISORS Registered office of the Company FDH Bank Plc Umoyo House P.O. Box 512 Blantyre, Malawi Tel +265 (0) 1 820 219 info@ fdh.co.mw FDH Bank Transfer Office: Chibisa House, 19 Glyn Jones Road, Blantyre Lead Corporate Advisor Legal Advisor Reporting Accountant Ernst & Young Tembenu, Masumbu & Company Deloitte Chartered Accountants Malawi Gelu House Chartered Accountants Malawi Apex House, Kidney Crescent Kamuzu Procession Rd PCL House P.O. Box 530 P.O. Box 2777 P.O. Box 187 Blantyre, Malawi Lilongwe, Malawi Kaohsiung Road Tel +265 (0) 1 876 476 Tel +265 (0) 1 756 286 Blantyre, Malawi [email protected] [email protected] Tel +265 (0) 1 822 277 [email protected] Transfer Secretary Sponsoring Broker Media and Communications Corporate Graphics MW NICO Asset Managers Limited Continental Capital Limited Corporate Graphics Limited Chibisa House 1st Floor, Ulimi House 31 Chilembwe Road 19 Glyn Jones Road Sharpe Road P.O. Box 2455 P.O. Box 3173 P.O. Box 1444 Blantyre, Malawi Blantyre, Malawi Blantyre, Malawi Tel +265 (0) 1 826 740 Tel +265 (0) 1 832 085 Tel +265 (0) 1 830 679 [email protected] [email protected] [email protected] Underwriter Underwriter Underwriter First Discount House First Discount House Limited Cedar Capital Limited Reunion Insurance Ltd Umoyo House Livingstone Towers Reunion House, Maselema P.O. Box 512 P.O. Box 3340 Private Bag 242 Blantyre, Malawi Blantyre, Malawi Blantyre, Malawi Tel +265 (0) 1 820 219 Tel +265 (0) 1 831 995 Tel +265 (0) 1 874 006 [email protected] [email protected] [email protected] Receiving Bank Receiving Bank Auditors FDH Bank Standard Bank Deloitte FDH Bank Plc Standard Bank Centre Chartered Accountants Malawi Umoyo House African Unity Avenue PCL House P.O. Box 512 P.O. Box 30380 Kaohsiung Road Blantyre, Malawi Lilongwe, Malawi Blantyre, Malawi Tel +265 (0) 1 820 219 Tel +265 (0) 999 331 372 Tel +265 (0) 1 822 277 info@ fdh.co.mw [email protected] [email protected] Attorneys Mbendera & Nkhono Associates 34 Link Road, Namiwawa Off Independence Drive P.O. Box 1785 Blantyre, Malawi Tel +265 (0) 1 822 027 [email protected] FDH Bank Prospectus 2 SALIENT FEATURES OF THE OFFER The information set out in this Salient Features section of the Prospectus is not intended to be comprehensive. To gain a more extensive understanding of the subject matter and information of the IPO, this Prospectus should be read in its entirety. In making an investment decision, investors must rely on their own or their advisors’ examination of FDH and the terms of the IPO, including