News Column

NIC Joins the Fray in Search of Fresh Capital

July 7, 2014

Constant Munda

Mid-tier lender NIC Bank has joined a growing list of publicly traded companies making cash calls to boost expansion strategies as well as meet statutory capital requirements.

The lender will hold an extraordinary general meeting on July 29 during which it will seek shareholders' go-ahead to issue rights on approval by the Capital Markets Authority.

The lender joins other mid-tier banks National Bank of Kenya and Diamond Trust Bank, which have received approval to raise Sh10 billion and Sh3.6 billion respectively through cash calls to boost capital bases.

The Central Bank also requires that banks raise the ratio of capital to total risk-weighted assets to 14.5 per cent by next January from 12 per cent currently.

NIC in a notice to the Nairobi Securities Exchange on Friday said the amount to be raised, the ratio of rights, price offer and date of issue will be set by directors once it gets the nod.

DTB's offer is highly discounted at Sh165 per share, 25.31 per cent lower than its six-month average of Sh238 a piece. The rights issue kicked off last Monday and will close on July 25.

DTB said it will use the proceeds from the offer to enter new markets in Rwanda, South Sudan, DRC, Mozambique and Madagascar.

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Source: AllAfrica

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