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Kenya

Stanchart shareholders approve Sh3.2b Rights Issue

NAIROBI, Kenya, May 24 – Standard Chartered Bank shareholders have approved the second Rights Issue in two years, which aims to raise Sh3.2 billion to support a growth strategy.

The bank’s CEO Richard Etemesi said the funds will help to build the bank’s assets, increasing loans and advances, recruitment of new staff, opening of new branches and refurbishment of current branches among other projects.

Thirty seven million ordinary shares of Sh5 each will be offered, thereby increasing the authorised share capital of the bank from Sh1.7 million to Sh1.9 million.

“We are asking the shareholders to give us money to fund the growth prospects that we have between 2012 and 2015. That’s why we are raising Sh3.2 billion. From today, the clock starts ticking, and we expect by October the process (to) be completed,” said Etemesi during the bank’s Annual General Meeting.

However during the AGM some of the shareholders questioned why the board was going for another Rights Issue, arguing that the bank should now be reaping the fruits of its 100 years of its investment in the country.

“I think you should have suggested giving a bonus issue first, and then a rights issue, so that those old people, who would not be able to buy the new shares on the rights issue, will still benefit from the company,” complained one of the shareholders during the meeting.

In 2010, the bank offered its first Sh2.5 billion Rights Issue to buy the custody business from Barclays Bank.

Etemesi however hopes for an over subscription in the offer, despite the current inflation challenges that have blocked many customers from investing in various sectors, especially in the financial sector.

“The underlying inflation figure which constitutes of food, fuel, electricity prices, will show an upward trend. If that is the case, then the Central Bank will have no option but to keep the CBR rate high until such a time we start seeing the reduction in the inflation,” added Etemesi.

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