CfC Stanbic project financing is mainly concentrated in power, infrastructure and commodities.
As at June 2014, the bank’s loan book stood at Sh97.5 billion against customer deposits of Sh114.6 billion.
CfC Stanbic is looking to accelerate its project financing after raising capital levels with a successful Sh4 billion bond.
Speaking while announcing results of the bond, chief executive officer Greg Brackenridge said the proceeds will increase the capital adequacy, tier-two capital and help to better match the maturity of its assets and liabilities.
CfC Stanbic project financing is mainly concentrated in power, infrastructure and commodities. Mr Brackenridge did not disclose projects in the pipeline.
As at June 2014, the bank’s loan book stood at Sh97.5 billion against customer deposits of Sh114.6 billion.
“It is a signal that we want to expand our business and lend more medium-term money, whether it is for individuals buying property or companies which need longer-term financing when they are investing in increased capacity. We will also expand our branch network, opening three or four branches this year,” said Mr Brackenridge.
In December CfC Stanbic loaned ARM Cement Sh4.5 billion, to be used in building a grinding plant in Tanga this year with the capacity of 2,500 tonnes per day, as well as expanding capacity of its Rwanda cement grinder to 2,000 tonnes daily.
CfC Stanbic and its South African parent Standard Bank also loaned Rift Valley Railways (RVR) Sh1.82 billion in September.
Standard Bank was among the arrangers for the Sh70 billion 310 megawatt Lake Turkana wind power project financing and was ranked second in the Africa 2014 investment bank fee earnings.
CfC Stanbic’s approved medium-term note plan is of up to Sh10 billion through multicurrency instruments, the first tranche being the Sh4 billion seven-year subordinated bond with a coupon of 12.75 per cent issued in Kenya shillings.
The bond attracted bids worth Sh5.08 billion, representing a 27 per cent oversubscription. The bank has only taken up the Sh4 billion it set out to borrow.
Fund managers took up 88 per cent of the bond, insurance companies nine percent and retail investors three percent.
Mr Brackenridge said there are no immediate plans to issue the remaining Sh6 billion notes until customer demand for financing make it necessary.
Lending to corporates on fixed terms and in foreign currency is likely to offer some cushion to banks’ interest income following the cut in the Kenya Banks’ Reference Rate (KBRR) rate to 8.54 per cent from 9.13 per cent.
Shilling-denominated loans are linked to KBRR. Fixed rate loans are not affected by the KBRR, as well as dollar and euro loans linked to Libor or US Treasury rates.
“In the case of CfC Stanbic, half of our loans are issued in currencies other than Kenya shillings. The impact on us will only be on the other half, of which some loans are also on fixed rate terms,” said Mr Brackenridge.
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