DTB kicks off Sh1.8b Rights Issue

July 18, 2012
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, NAIROBI, Kenya, Jul 18 – The Diamond Trust Bank (DTB) kicked off a Rights Issue on Tuesday, from which it targets to raise Sh1.8 billion to finance its expansion programme.

The bank will be offloading an additional 24.6 million shares to the existing shareholders, priced at Sh74 each and in the ratio of one share for every eight held at the closure of the register on July 2.

The bank’s Chief Executive Officer, Nasim Devji said DTB plans to spend the raised capital to fund its asset growth, increase its branches locally and in the east African Region.

“We cannot grow our branches, infrastructure, our credit, and so on without capital. Capital is like our main artery,” said Devji.

She said the bank’s key shareholders who hold over 50 percent stake have already shown interest in the Rights Issue which is set to close on August 10.

“We need to grow our micro business, and this will take us to the next level,” added Devji.

The Rights Issues will list at the Nairobi Securities Exchange on the September 12.

This will be DTB’s third Rights Issue after two successful ones in 2006 and 2007 where it raised close to Sh2.5 billion. The bank also received a total of Sh2.1 billion from the International Finance Corporation (IFC) in the form of a long- term line of credit.

“The first Issue was for about Sh780 million at the time, and that was over-subscribed, and the second Rights Issue was for about Sh1.6 billion closer to the amount we are raising now. So we have so much hope in this one,” said Alkarim Jiwa, DTB General Manager for Finance and Planning.

The bank used part of the funds for regional expansion with a view of using a wide branch network to grow its market share in the small and retail banking business.

DTB plans to launch its agency banking this October, to tap the lower end of the market. In addition, the CEO said there are plans to come up with micro entrepreneur unit within the bank

‘This will not be a subsidiary, but a business unit within the bank that we plan to start in the last quarter of this year. We are hoping that over time these micro entrepreneurs will graduate to become our SME customers,” said Devji.

Apart from Kenya, DTB has presence in three other East African countries – Tanzania, Uganda and Burundi.

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