KCB plans to raise Sh15bn for business growth

Mr Kihanda indicated that the bank is unlikely to go for equity capital through a rights issue as it has previously done.

Analysts indicate that a rights issue will not only dilute shareholders wealth but may also not get a full subscription due to the subdued environment at the equity market.

The rapid regional expansion of KCB Bank has exposed it to a number of risks that come with entry into new markets.

For instance, its entry into Southern Sudan exposes it to the ongoing political risks associated with the planned referendum and possible cessation from North.

Ironically, Southern Sudan operations are the only regional unit to report profit.

The bank expects Rwanda and Uganda operations to post profit this year.

Its operation in Tanzania dipped into negative territory after reporting profit in 2007.

This was attributed to its expansion which raised its operational costs.

However, the bank expects to return to profitability this year.

The drive for more capital is also informed by the need to fund the bank‘s initiative of consolidating operations and increasing customer numbers.

The bank has been on a modernisation drive which is expected to position it for intense competition.

The drive through branch expansion, installation of a new core banking platform and revamping of its corporate image has whittled down its income.