December 9, 2014
Listed lender NIC Bank has today signed loans worth $55 million (Sh 4.87 billion) with the International Finance Corporation (IFC) that provide it with long term funds to substantially grow its lending base across the region.
The first of the loans signed today, will see the private lending subsidiary of the World Bank advance $35 million (Sh 3.1 billion) to NIC Bank in the form of a senior loan for onward lending to its Personal and Small and Medium Enterprise (SME) customers.
Through the second agreement, the IFC will advance to NIC Bank a Tier II capital loan facility of $20 million (Sh 1.7 billion), further bolstering the Bank’s capital position and allowing it to finance large scale projects across the region.
Group Managing Director John Gachora welcomed the deal with IFC, saying it would support the bank’s growth strategy in the Corporate, Retail and SME segments.
“This is a big deal for us. The investment by IFC puts us in a good position and creates a strong foundation for our medium term strategy. The loans will enable us to grow our loan book aggressively, including financing projects with high foreign currency funding requirements.” said Mr Gachora.
Mr. Oumar Seydi, IFC Director for Eastern and Southern Africa, said today: “IFC’s investment in NIC Bank represents our commitment to financial inclusion and innovation in East Africa. We seek to partner with banks such as NIC, which demonstrate sound business strategy and governance record.”
The deal with IFC marks the third and final phase of NIC Bank’s successful capital-raising strategy which it has been executing since August this year. First off was a Sh3 billion bond issue, the first tranche out of a Sh8 billion program. The Medium Term Notes received offers of Sh 6.5 billion and was upsized from Sh 3.0 billion to Sh 5.5 billion. The bond was listed and commenced trading on Nairobi Securities Exchange in September.
The second phase was a Rights Issue through which the Bank sought to raise Sh 2.1 billion via a total of 42,663,040 new shares at a discounted price of Sh 49.25 per share on the basis of one new share for every 14 ordinary shares held. The issue is currently in its closing stages.
NIC Bank is set to close the year on a high note following the successful capital raising and sustained business growth and innovation. Last month, the bank reported a Sh 4.7 billion profit before tax, a 19 per cent year-on-year growth, for the third quarter ending September 30, 2014.
“We remain optimistic we will maintain this growth momentum into 2015. Our focus will be to deepen our presence and offering in the retail and SME segments as well as increase our footprint in the region,” added Mr Gachora.
For further information, please contact: NIC Bank’s Marketing & Communications Manager, Lena Karauri-Sitoyo, firstname.lastname@example.org or +254 20 2888390