August 6, 2014
Shareholders of NIC Bank today gave the nod for the listed lender to raise Ksh 2.1 Billion via a Rights Issue. The proceeds of the Rights Issue will be used to accelerate its regional expansion bid, as it eyes a larger slice of the East African cross-border financial market.
The move paves the way for NIC Bank, one of the oldest listed firms on the Nairobi Securities Exchange, to seek approval for the transaction from the Capital Markets Authority.
NIC Group Chairman, James Ndegwa told shareholders that the additional capital would boost the lender’s increased focus on the region as the East African Community integration opens lucrative opportunities for banks to finance cross-border trade.
“We really appreciate our shareholders’ support and with this approval, we believe that they will fully participate and assist the Bank realize its target and record another successful rights issue as was the case in 2007 and 2012,” said Mr. Ndegwa.
In 2007, NIC raised Ksh 1.1 billion through a Rights Issue, which was 49 per cent over-subscribed. In 2009, NIC Bank acquired a majority stake in Tanzania’s Savings & Finance Commercial Bank (S&F) which it re-branded to NIC Bank Tanzania Limited in 2010.
In August 2012, NIC Bank successfully raised a further Ksh 2.1 billion through a Rights Issue which was over-subscribed by 238 per cent. In February of the same year, NIC set up a commercial banking subsidiary in Uganda, NC Bank Uganda Limited (NCUG) which began operations on 1st June of that year. The Bank continues to register steady growth, tapping the growing regional economy.
Earlier last month, the bank announced it would pursue a mix of debt and equity by raising additional capital through a corporate bond and rights issue.
NIC Group Managing Director John Gachora said the two-pronged strategy will also enable the lender to grow its SME book and diversify its business portfolio. “If successful, the corporate bond and rights issue will help us focus on continued growth in the coming years with more focus on deal-making opportunities in Kenya and the region,” said Mr. Gachora.
It is expected that the Rights issue will be launched in September, subject to the necessary approvals, and close towards the end of November 2014.
Last month, the bank announced an 11% jump in profit before tax for the first six months of 2014 driven by increased lending to key sectors in Kenya and the region. It posted a Ksh2.9 billion profit compared to the Ksh2.6 billion recorded during the same period last year.
For further information, please contact: NIC Bank’s Marketing & Communications Manager, Lena Karauri-Sitoyo, firstname.lastname@example.org or +254 20 2888390