NIC Bank plans Sh2b Rights Issue

February 23, 2012
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NIC had a successful Rights Issue in 2007/FILE
NAIROBI, Kenya, Feb 23 – NIC Bank has announced plans to raise an additional capital Sh2billion through a Rights Issue.

No mention was made of how many shares will be floated but the proposal is subject to the requisite regulatory approvals.

“The directors recommend for approval at the upcoming Annual General Meeting (AGM) increase in the authorised share capital and the raising of additional capital of Sh2 billion through a Rights Issue,” the bank said in a statement.

NIC had a successful Rights Issue in 2007 where it raised Sh1.2billion against a target of Sh1billion.

At the 52nd AGM slated for May 2 2012, the bank will also seek the green light to set up a Sh961 million branch in Uganda where it hopes to extend its footprint.

The outlet will be a wholly-owned subsidiary unlike its operations in Tanzania where NIC holds a 51 percent stake in a mid-sized commercial bank, Savings & Finance Commercial Bank Limited.

As part of its expansion program, the bank is also planning to set up shop in Rwanda as competition in the banking industry goes regional.

In the statement signed by both the Chairman James Ndegwa and his Managing Director James Macharia, the bank further disclosed that its directors had recommended a bonus issue at the ratio of one for every 10 ordinary shares held.

These revelations were made as the bank announced a 46.4 percent rise in net profit to Sh2.5 billion for the year ended December 2011.

Its total interest income jumped from Sh4.58 billion in the responding period in 2010 to Sh6.28 billion while customer deposits grew by 60 percent to Sh2.26 billion.

The board has proposed a final dividend of 25 cents per share which is similar to that paid out in 2010.

Following the announcement, the NIC share surged six percent to Sh26.50 which is the highest it has touched in the last one month.

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