DTB raises stake in Uganda unit with Sh1.1bn injection

DTB Group has invested an additional Sh1.1 billion in its Ugandan unit, raising its stake in the subsidiary.

The Nairobi Securities Exchange-listed firm participated in DTB Uganda’s rights issue in April that raised a total of Sh1.4 billion.

DTB, which previously held a 56.97 per cent stake in the subsidiary, did not say to what level its equity had jumped after the cash call.

The move comes soon after the lender invested a similar amount to participate in a rights issue at its Tanzanian subsidiary where it acquired an extra 2.75 per cent stake after taking up shares worth Sh168.1 million left by a section of minority investors.

This saw its interest in the subsidiary rise to 65.68 per cent from the previous 62.93.

“The reason for the investments is to allow the subsidiaries to grow and meet higher capital requirements that have been announced in the two markets,” said Alkarim Jiwa, the chief financial officer at DTB.

The company is the latest Kenyan multinational bank to raise its investment in regional subsidiaries, with NIC Bank also disclosing it provided Sh376.2 million of capital to its Ugandan unit last year to boost its capital ratios.

The capital injections will see DTB claim a larger share of the subsidiaries’ assets and future earnings, with the company keen on growing its presence in the East African region.

DTB plans to expand to other African markets in the next three years, eyeing an entry into Rwanda, South Sudan, Democratic Republic of Congo, Mozambique and Madagascar.

“This transformational journey is anchored on DTB evolving as a regional, omnichannel bank that is centered on providing a seamless banking experience to its customers,” the bank said in its latest annual report.

DTB Tanzania made a net profit of Sh937 million last year while that of Uganda stood at Sh808.7 million in the same period.

READ: DTB firms grip on Tanzania unit with Sh1.1bn injection

The lender’s Burundi unit had a net profit of Sh55.4 million, with the regional units boosting DTB’s total earnings.

The parent company posted a 15.6 per cent growth in net profit for the year ended December, helped by higher income from lending and transaction charges.

Its net profit in the period stood at Sh6.5 billion, up from Sh5.7 billion the year before.

DTB declared a dividend of Sh2.5 per share, an increase from the previous Sh2.4 per share.

The bank has also proposed the issuance of bonus shares at a rate of one share for every ten held.

The new shares will not qualify for the dividend, which is expected to be paid on June 12.

“Such new shares will rank pari passu in all respects with the existing shares in the capital of the bank except for the aforementioned dividends and any further dividend paid prior to the bonus issue,” the company said in a statement.

The bank will issue 24.2 million new shares based on the current outstanding shares of 242.1 million shares. DTB’s interest income rose 24.1 per cent to Sh25.8 billion as the loan book expanded 28.9 per cent to Sh177.5 billion.

Other income, including fees on transactions, increased 24.4 per cent to Sh4.7 billion.