Coop makes full allocation for IPO

December 15, 2008

, NAIROBI, Kenya, Dec 15 – The Co-operative Bank has announced full allocation for all investors who participated in the recently concluded Initial Public Offer (IPO).

The IPO received 66,576 applications for a total of 564,084,400 shares and raised over Sh5.3 billion additional capital.

“We are pleased that we are allocating the total amount each applicant applied for. Not a single of our investors will have to go through the frustrations of the refund process recently experienced in the market,” said the bank’s Managing Director Gideon Muriuki.

Mr Muriuki revealed that the bank was on target to record a Sh3.4 billion profit before tax by the end of this month from which another Sh2 billion would be retained to bring the bank’s total capital base to over Sh14 billion.

He said the additional capital is adequate to cater for strategic growth and expansion.

Trading of the bank’s shares at the stock market is now set to be launched on the December 22.

The Bank had been mulling over listing since 1997 but the idea had to be shelved after its headquarters was destroyed by the 1998 terrorist bombing.

Co-op Bank then slipped into loss-making culminating in a Sh2.3 billion loss and subsequent shake-up of the management.
However, in the last few years the bank’s prospects have looked up with a profit of Sh2.3 billion realised last year.

The new shares come into the market with fears that existing shares may swamp the market, but the bank’s management has sought to allay such fears.

According to the bank’s information memorandum, few shares will be available in the market upon listing with the holding limited company for the country’s cooperatives – with 62 percent of the bank’s shares – having been locked in for five years.
Staff members took up an allocation of four percent of the shares and are locked in for two years.
The bank has a strong niche in the cooperative movement segment, which is estimated to hold seven million bankable individuals.

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