December 11, 2014
Listed lender NIC Bank has announced an oversubscription of its third Rights Issue which targeted to raise Ksh2.1 billion to boost capital and grow its retail and SME business.
The Rights Issue raised Ksh4.6 billion, representing a subscription rate of 221 per cent.
NIC Bank Group Managing Director John Gachora says the money raised will be used to diversify the bank’s business portfolio as it looks to roll out its ambitious growth strategy in the New Year with a focus on SME (small and medium enterprises), corporate and retail customers.
“We are pleased with the outcome of the Rights Issue. Its success is a welcome vote of confidence by shareholders on the Bank’s long-term strategy. The money raised will help us focus on continued growth in the coming years as we continue to invest in Kenya and the region,” said Mr Gachora.
The bank had offered a total of 42,663,040 new shares at a discounted price of Ksh49.25 per share on the basis of 1 new share for every 14 ordinary shares held.
The listing of the new shares and dispatch of payment of refunds through Electronic Funds Transfer (EFT) or refund cheques will be done on Thursday, December 18th, 2014.
This was the bank’s third successful Rights Issue in seven years having raised Ksh1.1 billion in 2007, which was oversubscribed by 49 per cent. In August 2012, NIC Bank successfully raised a further Ksh2.1 billion, which was oversubscribed by 238 per cent. Capital from previous issues was used to upgrade the bank’s core banking platform, expand in the region and to open new subsidiaries.
The Rights Issue is part of a major debt and equity capital-raising programme initiated by NIC Bank earlier this year. A Medium Term Note issued by NIC Bank received offers of Ksh6.5 billion and was upsized to Ksh5.5 billion from the original Ksh3 billion. This was the first tranche under a Ksh8 billion bond program. The bank listed and started trading its Ksh5.5 billion bond at the NSE in September.
NIC Bank closes 2014 on a high note following the successful capital raising and business growth. Last month the bank reported a Ksh4.7 billion profit before tax, a 19 per cent year-on-year growth, for the third quarter ending September 30, 2014.
“We remain optimistic that we will continue on this growth trajectory into the New Year. Our focus going forward will be to penetrate the Retail and SME markets as well as increase our footprint in the region,” said Mr Gachora.
For further information, please contact: NIC Bank’s Marketing & Communications Manager, Lena Karauri-Sitoyo, firstname.lastname@example.org or +254 20 2888390