In the heart of Malawi’s evolving financial landscape, CDH Investment Bank stands as a beacon of innovation and ambition, blending the sophistication of investment banking with the accessibility of traditional commercial banking.
As the financial sector in Malawi matures, CDH Investment Bank is poised to lead the charge, driven by a vision to become the premier specialist bank for a select clientele while delivering transformative value to stakeholders. This article explores the bank’s strategic direction, the state of investment banking in Malawi and the innovative solutions that will shape investment banking in Malawi and its future, addressing key trends, challenges, and opportunities.
1. What is your vision for CDH Investment Bank, and how do you plan to implement strategies that align with this vision?
Our vision is to remain Malawi’s best specialist bank, delivering exceptional value to a discerning clientele while making tangible impact on customers’ lives. We will continue to go beyond traditional commercial banking, delving into governance, planning, research, corporate finance and advisory. We have successfully proved a concept which we will continue investing in for the foreseeable future. Our collective genius, which seamlessly combines corporate finance and investment banking services with traditional commercial banking activities to deliver impressive value to its stakeholders and clients and in the process generating an impressive return on shareholder’s equity, will remain our model. To achieve this vision, we will continue to focus on our mission of delivering financial solutions through continued investments in talent identification and development, digital transformation, sustainability and ESG.
2. What is investment banking, and how does it differ from traditional commercial banking?
Investment banking and commercial banking are often conflated, but they serve fundamentally different roles in the financial ecosystem. I am pleased to be given the opportunity to demystify these differences and explain why both are critical to a thriving economy like Malawi’s. Investment banking is the high-octane engine of corporate finance. Investment banks primarily assist companies with capital raising, strategic advisory, market making and trading of financials securities. Capital raising involves helping companies and governments raise funds through equity and debt issues. Equity issues for example, include initial public offerings (IPOs) and private placements, while debt issues include, corporate bonds and syndicated loans. Under strategic advisory, investment banks advise their customers to effectively conclude mergers and acquisitions (M&A), restructurings and divestitures, valuations and fair opinions. For example, CDH Investment Bank has successfully advised banks, insurance and manufacturing companies in equity restructurings. CDH Investment Bank is a registered advisor to provide valuation services by the Registrar of Companies and is also a licenced corporate finance advisor with the Malawi Stock Exchange.
Market makers are financial institutions (mainly investment banks) which provide liquidity to markets by continuously quoting bid and ask prices for financial securities, standing ready to trade when natural buyers/sellers aren’t immediately available, and profiting from the gap between the bid and offer spreads. Trading on the other hand is the buying and selling of financial securities either on behalf of clients or on own account. Trading is critical as it helps a market discover fair prices of financial securities (known as price discovery) and assists in risk transfer. Investment banks are therefore financial architects – designing bespoke solutions for large-scale growth. That is why CDH Investment Bank’s primary mission is provision of financial solutions making innovation our central value. Commercial banking on the other hand is the backbone of daily finance. Commercial banks focus on deposit-taking (savings/current accounts), lending (mortgages, SME loans, overdrafts) and payment systems (mobile money, cards). Their role is liquidity management and financial inclusion – serving individuals and businesses’ day-to-day needs.
Malawi needs both commercial banks and investment banks. Commercial banks ensure financial stability and inclusion while investment banks fuel large projects in critical areas of energy, water, financial services, telecoms and agri-processing, just to name a few, that drive GDP growth. Commercial banking powers today’s economy; investment banking builds tomorrow’s. As Malawi’s capital markets mature, this synergy will become even more vital.
At CDH Investment Bank, we bridge these worlds—offering capital raising and strategic advisory while understanding local banking nuances. We also make markets and lead in trading financial securities assisting in price discovery and risk transfer. CDH Investment Bank pioneered mobility of financial securities through market making and trading in 1998. Our recent work on advising banks and government exemplifies how investment banking can transform Malawi’s economic landscape.
3. What is the current state of the investment banking landscape in Malawi?
Malawi’s investment banking sector stands at a pivotal juncture. While still nascent compared to regional peers, the industry is demonstrating exciting potential to become a catalyst for transformative economic growth. Here is my assessment of the current landscape: Our investment banking ecosystem is characterized by growing but limited capital markets. The Malawi Stock Exchange which has been instrumental in our capital market development, had 16 listed equity counters with market capitalisation of K15.40 trillion (USD8.80 billion), and 107 listed government debt securities with nominal value of K5.86 trillion (USD3.35 billion) as of 31st March 2025. Trading volumes are relatively low compared to regional exchanges, limiting liquidity. The recently listed corporate bond (by MyBucks Banking Corporation Limited, now Centenary Bank), led a promising sign of
deepening debt markets based on which we hope to see more corporate debt securities listed on the market. Traditional IPOs and rights issues have dominated but we have seen work around green bonds, early-stage private equity activity and structured financial solutions, mainly Exchange Traded Funds (ETFs) being discussed at a good level.
Opportunities for investment banks lie in expanding capital raising for productive sectors, mainly financing large scale commercial farming, advisory for agricultural export companies seeking regional expansion, structured solutions for hydro and solar energy projects to deepen power availability, Public-Private Partnerships (PPP) advisory for road and road/infrastructure, mergers and acquisitions for banks and financial institutions and capital raising for microfinance institutions.
4. What is the biggest challenge for investment banking services in Malawi?
The biggest challenges for investment banking services in Malawi are limited market depth, talent gaps, and currency risks. Malawi’s economy is relatively small, and its capital markets are underdeveloped, which restricts the availability of investment opportunities and capital flows. The market has a limited institutional investor base beyond pension funds and insurance companies. In addition, there remains an acute shortage of experienced investment bankers. Efforts to identify and develop investment bankers have been lucklustre, resulting in a market which lacks much vibrancy and creativity.
The challenge is exacerbated by the lack of awareness of the development needs of investment bankers. Further, the current foreign exchange volatility and limited availability complicate cross-border transactions.
Looking ahead, the investment banking sector needs to advocate policies which attract more listings and investors, invest in training the next generation of investment bankers and introduce more structured finance and risk management solutions. At CDH Investment Bank, we have put capacity development at the forefront of our strategy. The coming decade presents a tremendous opportunity to establish Malawi as an investment banking hub for the region, that depends on the young generation to embrace the focus that is required to develop into a solid investment banker.
5. What market trends do you anticipate impacting the investment banking sector in Malawi?
We identify four pivotal trends which will redefine the industry in the coming 3-5 years, presenting challenges and exciting opportunities for corporates, investors and policymakers.
Firstly, we anticipate that green finance will take the centre stage. Malawi’s vulnerability to weather related shocks will lead regulators and customers to drive sustainable finance structures. In addition, global ESG (environmental, social and global) capital flows, which are on the rise, will present an opportunity for many corporates to tap into. We also anticipate that continued digitization of financial services will reshape the landscape, prompting the industry to enhance technological infrastructure for seamless transactions and client services. Significant innovation and investment will be required to widen the investor base beyond pension fund and insurance companies to reach more retail investors.
Further, the low market capitalization to GDP ratio (less than 15% versus Kenya’s 32% and Tanzania’s 25%) and the demand for foreign currency hedging will drive regional integration through cross-listings, COMESA cross-border trade harmonization (for example, cross-border mergers and acquisitions) and new currency hedging solutions to manage the Kwacha volatility.
Lastly, we anticipate that there will be significant regulatory modernization. Many outdated regulations which stifle innovation will be repealed to excite talent and innovation, for effective customer service. This will require continuous engagement between regulators and the market which we have seen to be thriving. The Capital Market Association and the regulator have a good working relationship which has led to many positive advancements in the market. It therefore remains imperative for investment banks to focus on developing investment banking skills for our people to effectively anticipate and drive these new changes. As we say in CDH Investment Bank, “Investment banking is a skill, not a product or service”.
6. Given the Malawi banking sector operational environment, how do you plan to make sure that CDH Investment Bank’s investment banking arm remains agile and responsive to market demands?
The investment banking industry has always been dynamic and high octane, a privilege to serve only with innovation and desire for service. It remains imperative for all investment bankers to continually develop themselves through continuous reading, networking and client development.
First, we will continue our relentless pursuit of talent and invest resources to develop those who have decided to become top investment bankers. As technology advances, we will continually invest in innovative solutions to stay ahead of the market. By maintaining regulatory foresight and implementing scenario-based risk management strategies, we will stay ahead of market shifts. Our client-centric approach, combined with tailored advisory services and flexible deal structures, will enable us to meet the diverse needs of our clients and drive sustainable growth.
7. How would you rate the bank’s contribution to the financial services spectrum, local private sector/businesses, and the economy at large, over the past decade it has been in operation?
CDH Investment Bank has been instrumental in supporting local businesses, the government, and the broader economy. Over the past decade, we have significantly contributed to the growth of the financial services sector through our advisory services, capital market development, and the financing of critical projects. One of our key achievements in the capital markets was serving as the lead advisor for the largest rights issue in Malawi’s history, on behalf of NBS Bank Plc.
In addition to our work with public entities, we have facilitated access to capital for numerous private sector businesses, driving economic development in crucial sectors such as infrastructure, agriculture, and energy. Our efforts continue to foster sustainable growth and create long-term value for the Malawian economy.
8. What innovative investment banking solutions do you envision for the Bank
Innovation is at the core of CDH Investment Bank’s strategy, and we are dedicated to launching investment banking solutions that will drive the growth of Malawi’s capital markets and empower our clients. First, CDH Investment Bank plans to introduce green financing products that encourage investments in renewable energy, sustainable agriculture, and eco-friendly projects. These efforts will not only promote environmentally responsible development but also support sectors critical to Malawi’s socio-economic growth. Second, with rapid technological advancements, we aim to enhance our digital financial offerings, focusing on products that broaden access to capital markets for a wider range of clients.
Finally, we plan to introduce new investment vehicles, such as Exchange Traded Funds (ETFs) and derivative markets, providing Malawian investors with fresh opportunities to diversify their portfolios and
participate in modern financial instruments.
9. In what ways does CDH Investment Bank contribute to the sustainable economic development?
We support sectors that drive long-term growth, such as agriculture, infrastructure, and renewable energy. Through our investment banking services, CDH facilitates capital raising for businesses, helping them expand and create jobs, which stimulates economic activity. The bank also promotes financial inclusion by offering tailored financing
solutions to small and medium-sized enterprises (SMEs), a critical segment of Malawi’s economy.
By offering advisory services on government projects, the bank helps finance vital infrastructure projects, improving essential services like energy and transportation, which in turn boosts overall economic productivity. Finally, by fostering regional and international investment, CDH Investment Bank helps attract foreign capital, further supporting Malawi’s sustainable economic growth.
10. What does the future hold for CDH Investment Bank?
While the world undergoes rapid change and society faces uncertainties, CDH Investment Bank stands poised for opportunities. As we envision the future, our goal is to build a strong, specialist bank that embraces the future, delivers on promises, and champions the communities we serve. We will continue to partner with experts to advise governments and corporates, ensuring impactful project completion. Our commitment extends from conceptualization to closure, linking international investors with Malawi, and facilitating national development initiatives. Flexibility and agility will characterize our approach, responding to diverse and rapidly changing needs. We remain fully committed to investing in our people, creating an environment where everyone can thrive. Technological investments will enhance service delivery, and we embrace continuous development as a core aspect of our culture.
11. Any last word?
We are optimistic about the future. At CDH Investment Bank, we will continue to champion innovation, adaptability, and growth, and remain a trusted partner to our clients. Our aim is to be more than just bankers – we strive to be strategic partners and advisors, providing valuable guidance to support our clients’ long-term success and growth.
