NAIROBI, Kenya, Aug 10 – The Kenya Commercial Bank (KCB) Group has announced that it managed to raise Sh12.45 billion in its recently concluded rights issue, which represents a success rate of 83 percent.
Although the figure is Sh2.5 billion short of what the bank sought to raise from its shareholders, the board has expressed satisfaction with the results which are above the targeted success rate that was pegged at 50 percent and which also surpasses the minimum level of success sanctioned by the Capital Markets Authority.
While releasing the allocation results, Chairman Peter Muthoka said they received 55,996 applications from shareholders for a total of 637,284,167 rights provisionally allotted to them.
“The shareholders also applied for 95,107,199 additional shares in line with the provisions of the published Information Memorandum. A total of 732,391,366 shares were taken up against 887,111,110 shares offered in this rights issue, representing an 82.56 percent uptake,” he said.
Since there was no over oversubscription in this issue which is the third in six years, all applicants will get a 100 percent of the shares applied for.
“Following this allotment, the total number of issued ordinary shares for KCB increases to 2,950,169,366 ordinary shares of Sh1 each up from 2,217,777,777 ordinary shares held before the rights issue,” Mr Muthoka said.
Untaken rights which amount to 154,719,744 will now form part of the bank’s authorised capital for future issuance. The authorised capital for the bank is 3.5 billion shares.
The additional capital also means that at Sh35.4 billion, KCB now has the largest capital base in the region.
It’s also the biggest bank in asset value and in branch network as well. Last year, the group closed the year with a balance sheet of over Sh195 billion which put pressure on its capital and ability to grow which necessitated the floating of the issue.
Of the raised amount, approximately Sh12 billion will be credited to the group’s capital account which will thereafter be used to spur regional growth and increase loans.
With the rights issue firmly behind them, the chairman said they will now embark on a strategy that will put their business on a platform that would propel it to a growth and profitability path. The bank hopes to grow its market share from the current 15 percent to about 20 percent in the next two to three years.
“The journey does not end here for we have a lot of work to do to put KCB in its rightful place in the corporate map of the region,” he reiterated.
The bank intends to grow its capital through earnings retention which will go a long way in cushioning its business from negative effects that can be brought about by having a deficit in its books.
The passing of a new constitution in Kenya also gives the institution the confidence that its future outlook will be positive.