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Money Markets

Consolidated Bank capital falls to CBK minimum limit

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Customers at Consolidated Bank. Consolidated Bank has been operating on thin capital adequacy ratios which made it turn to its majority shareholder, the Treasury, for a Sh1 billion capital injection. Photo/ANTHONY KAMAU | File

Customers at Consolidated Bank. Consolidated Bank has been operating on thin capital adequacy ratios which made it turn to its majority shareholder, the Treasury, for a Sh1 billion capital injection. Photo/ANTHONY KAMAU | File  Nation Media Group

By George Ngigi

Posted  Thursday, November 29   2012 at  19:12

In Summary

  • To maintain its growth momentum the bank, which has previously relied on ploughing back of profits, needed capital injection just as its peers in the industry but its ownership structure has seen it remain in a limbo for over an year.
  • Other banks, faced with low capital adequacy ratios have turned to their shareholders.
  • These include Standard Chartered, Jamii Bora, CFC Stanbic who have executed rights issues while Chase Bank and Equatorial Commercial Bank have invited strategic investors to put in more cash.

Delays by the Treasury in injecting additional funds in Consolidated Bank have seen the capital ratios of the State-owned lender drop to the statutory minimum, barring it from taking any more customer deposits.
As at the end of September, the bank’s core capital to total deposits ratios was at eight per cent, which is the regulatory minimum set by the Central Bank of Kenya (CBK).
Consolidated Bank has been operating on thin capital adequacy ratios which made it turn to its majority shareholder, the Treasury, for a Sh1 billion capital injection.

Money Markets

Consolidated Bank capital falls to CBK minimum limit

Share Bookmark Print Rating
Customers at Consolidated Bank. Consolidated Bank has been operating on thin capital adequacy ratios which made it turn to its majority shareholder, the Treasury, for a Sh1 billion capital injection. Photo/ANTHONY KAMAU | File

Customers at Consolidated Bank. Consolidated Bank has been operating on thin capital adequacy ratios which made it turn to its majority shareholder, the Treasury, for a Sh1 billion capital injection. Photo/ANTHONY KAMAU | File  Nation Media Group

By George Ngigi

Posted  Thursday, November 29   2012 at  19:12

In Summary

  • To maintain its growth momentum the bank, which has previously relied on ploughing back of profits, needed capital injection just as its peers in the industry but its ownership structure has seen it remain in a limbo for over an year.
  • Other banks, faced with low capital adequacy ratios have turned to their shareholders.
  • These include Standard Chartered, Jamii Bora, CFC Stanbic who have executed rights issues while Chase Bank and Equatorial Commercial Bank have invited strategic investors to put in more cash.

Delays by the Treasury in injecting additional funds in Consolidated Bank have seen the capital ratios of the State-owned lender drop to the statutory minimum, barring it from taking any more customer deposits.
As at the end of September, the bank’s core capital to total deposits ratios was at eight per cent, which is the regulatory minimum set by the Central Bank of Kenya (CBK).
Consolidated Bank has been operating on thin capital adequacy ratios which made it turn to its majority shareholder, the Treasury, for a Sh1 billion capital injection.

Money Markets

Consolidated Bank capital falls to CBK minimum limit

Share Bookmark Print Rating
Customers at Consolidated Bank. Consolidated Bank has been operating on thin capital adequacy ratios which made it turn to its majority shareholder, the Treasury, for a Sh1 billion capital injection. Photo/ANTHONY KAMAU | File

Customers at Consolidated Bank. Consolidated Bank has been operating on thin capital adequacy ratios which made it turn to its majority shareholder, the Treasury, for a Sh1 billion capital injection. Photo/ANTHONY KAMAU | File  Nation Media Group

By George Ngigi

Posted  Thursday, November 29   2012 at  19:12

In Summary

  • To maintain its growth momentum the bank, which has previously relied on ploughing back of profits, needed capital injection just as its peers in the industry but its ownership structure has seen it remain in a limbo for over an year.
  • Other banks, faced with low capital adequacy ratios have turned to their shareholders.
  • These include Standard Chartered, Jamii Bora, CFC Stanbic who have executed rights issues while Chase Bank and Equatorial Commercial Bank have invited strategic investors to put in more cash.

Delays by the Treasury in injecting additional funds in Consolidated Bank have seen the capital ratios of the State-owned lender drop to the statutory minimum, barring it from taking any more customer deposits.
As at the end of September, the bank’s core capital to total deposits ratios was at eight per cent, which is the regulatory minimum set by the Central Bank of Kenya (CBK).
Consolidated Bank has been operating on thin capital adequacy ratios which made it turn to its majority shareholder, the Treasury, for a Sh1 billion capital injection.