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Kenyan bank fast tracks privatisation

NAIROBI, Kenya Jun 24 – Consolidated Bank plans to fast track its privatisation in an effort to inject additional capital to support its growth.

Speaking on the sidelines of an Annual General Meeting on Thursday, Consolidated Bank Chairman Eunice Kagane said the institution was looking for a strategic investor who would be able to raise the bank’s capital base to expand its network while maintaining profitability.

“We are on course to privatise the bank but we still have a few things being looked after by a consultant in order to look into the bank and establish what we really want from the privatisation,” Ms Kagane said adding the process should be completed in the next two years.

Consolidated Bank is currently weighing a number of options such as an Initial Public Offer to raise additional funds.

“The raising of the capital will either follow an IPO, contribution from the shareholders or the floatation of a bond in the open market,” she said.

Consolidated Bank has over the last couple of years shaken off its loss making ways, posting Sh116 million in pre-tax profit for its 2009 financial year up from Sh84 million the previous year.

The bank was formed in 1989 to take over nine financial institutions which were on the brink of collapse. It inherited debts to the tune of Sh5 billion years, which have now been reduced to Sh1 billion.

These institutions were Jimba Credit, Citizen Building Society, Nationwide and Union Bank of Kenya. Others were Kenya Savings and Mortgages Company, Estate Finance Company, Estate Building Society, Business Finance and Home Savings and Mortgages.

It has also embarked on a Sh100 million re-branding exercise as it looks to shed off its loss-making image.

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Consolidated Bank Chief Executive David Wachira said the bank is eyeing an additional five branches in the next two years to add to its current network of 12 across the country.

The bank has identified Nakuru, Eldoret and Nyahururu as potential growth areas. He however said the bank would be more inclined on agency banking rather than the traditional construction of bank branches.

“Our focus is on agency banking because that is a lot easier for us but at the end of the day you still need a footprint in certain areas,” he said.

He said the bank has already identified more than 350 potential agents and is waiting for the Central Bank’s approval.

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