, NAIROBI, Kenya, Aug 6 – Shareholders of NIC Bank have approved for the listed lender to raise Sh2.1 billion through a Rights Issue.
The proceeds of the Rights Issue will be used to accelerate its regional expansion bid, as it eyes a larger slice of the East African cross-border financial market. The move paves the way for NIC Bank to seek approval for the transaction from the Capital Markets Authority (CMA).
NIC Group Chairman James Ndegwa told shareholders that the additional capital would boost the lender’s increased focus on the region as the East African Community (EAC) integration opens lucrative opportunities for banks to finance cross-border trade.
“We really appreciate our shareholders’ support and with this approval, we believe that they will fully participate and assist the Bank realize its target and record another successful rights issue as was the case in 2007 and 2012,” said Ndegwa.
On his part, NIC Group Managing Director John Gachora said the two-pronged strategy will also enable the lender to grow its Small Medium Enterprise (SME) book and diversify its business portfolio.
“If successful, the Corporate Bond and Rights Issue will help us focus on continued growth in the coming years with more focus on deal-making opportunities in Kenya and the region,” said Gachora.
The Rights issue is expected to be launched in September subject to the necessary approvals, and close towards the end of November 2014.
In 2007, NIC raised Sh1.1 billion through a Rights Issue, which was 49 percent over-subscribed.
In 2009, NIC Bank acquired a majority stake in Tanzania’s Finance Commercial Bank which it re-branded to NIC Bank Tanzania Limited in 2010.
In August 2012, NIC Bank successfully raised a further Sh2.1 billion through a Rights Issue which was over-subscribed by 238 percent.
Last month, the bank posted a Sh2.9 billion profit compared to the Sh2.6 billion recorded during the same period last year.