Shareholders of NIC Bank Limited today gave the nod for the listed lender to reorganise the business to create a Non-Operating Holding Company.
The shareholders gave their approval at an Extraordinary General Meeting (EGM) held today at KICC to pass the resolutions.
The move paves the way for NIC Bank, one of the oldest listed firms on the Nairobi Securities Exchange, to convert into a non-operating holding company to be known as ‘NIC Group PLC’. The reorganisation will also include the creation of a new wholly owned subsidiary, ‘NIC Bank Kenya PLC’.
NIC Bank Chairman, James Ndegwa told shareholders that the reorganisation was driven by the need to support the Bank’s medium and long term strategy through a structure that facilitates optimal use of capital, better strategic management, more effective risk management and improved governance of the subsidiaries.
“We are grateful to our shareholders who have supported the vision we have for this institution to increase its footprint in the region. The new structure will support the Bank’s ability to meet its long term ambitions of regional expansion and to ring fence the various businesses resulting in better alignment of the proposed NIC Group PLC’s resources, and better equity value for our shareholders,” said Mr John Gachora, Group Managing Director of NIC Bank.
He noted the reorganisation would have minimal impact on shareholders, customers, employees and the regulators.
The reorganisation is in line with the Central Bank of Kenya regulations, issued in 2013, which recognizes the concept of a banking group that comprises of non-operating holding company that owns controlling stakes in licenced banking and other financial institutions as well as non-banking entities.
“The Bank’s strategy to grow its Retail and SME segments is bearing fruit and we expect to continue seeing growth driven by the various investments we have made including growing our branch network from 27 at the start of the year to 33. Despite the recent changes we have seen in our industry, NIC Bank is well positioned to continue growing and the reorganisation will ensure we are able to better capitalise on various growth opportunities,” said Mr Gachora.
NIC Bank is targeting to complete the reorganisation by the end of the year.