, NAIROBI, Kenya , Jan 20 – The Commercial Bank of Africa (CBA) has listed its Sh7 billion medium term note at the Nairobi Securities Exchange (NSE) as it seeks to accelerate its Pan African growth agenda.
The bank raised the Sh7 billion in the first tranche of the medium term note issue which saw an over subscription of 40 percent, where the bank exercised a green shoe option of Sh2 billion.
The bank had planned to raise Sh8 billion over a two year period beginning with Sh5 billion as the first tranche with a green shoe option of Sh2 billion, and the remainder by the end of June 2015.
CBA Group Managing Director Isaac Awuondo said the capital injection is crucial to the bank’s regional expansion plans as it seeks to enter into new markets in the region which requires a significant amount of funds.
“Our main aim for raising this capital was to facilitate our geographic expansion within the region. This vision is now a step away from being a reality. We will deliver on our promises and I want to thank investors for their support,” said Awuondo.
The bank intends to extend its presence in Kenya, Uganda and Tanzania.
On his part, NSE Chairman Eddy Njoroge urged firms in the banking and insurance sectors to follow the example of the bank to also use the Capital Markets to enable them meet their regulatory obligations.
“As we consolidate our financial services regulators, listed firms particularly those whose services encompass insurance, banking and other financial services should find it easier to comply,” Njoroge added.
Earlier the bank hinted some of the money will be used to enter the Rwanda and Burundi markets in 2015 through acquisitions, partnerships and/or wholly owned subsidiaries.
The bank also plans to use part of the money to meet the new Central Bank of Kenya’s capital adequacy ratio rules that come into effect in January 2015.
The regulator wants banks to raise their buffers by up to 2.5 percent of their deposits a move mainly aimed at cushioning institutions in times of economic stress.