Housing Finance says rights issue an option in capital bid
HF managing director Frank Ireri. Photo/FILE
What you need to know:
Housing Finance’s core capital to total risk-weighted assets stood at 16.56 per cent as at the end of June, just slightly above the Central Bank of Kenya (CBK) statutory minimum of 12 per cent.
Increasing the bank’s capital will give it capacity to accept more deposits needed to originate loans.
The financier’s last rights issue was in 2008 when it raised Sh2.3 billion.
Housing Finance will be looking to raise more capital from next year and has identified a rights issue as one of the options. This is after the bank shelved a plan to issue a Sh20 billion bond citing ‘crowding out’ by State bonds.
“Definitely in 2015 and 2016 we will be looking to raise more capital in one way or another,” HF managing director Frank Ireri said at a media briefing.
The financier’s core capital to total risk-weighted assets stood at 16.56 per cent as at the end of June, just slightly above the Central Bank of Kenya (CBK) statutory minimum of 12 per cent. The same ratio stood at 20.98 per cent in June 2013.
The CBK will increase adequacy ratios in 2015 requiring lenders to increase capital. National Bank and NIC are the other commercial banks that are making rights issues to boost capital bases.
Housing Finance’s last rights issue was in 2008 when it raised Sh2.3 billion. Increasing the bank’s capital will give it capacity to accept more deposits needed to originate loans.
Mr Ireri said the home loans firm is also looking at other sources of finance especially from the foreign market, a popular source for the listed mortgage lender.
The bank recently received a Sh1 billion loan from Norwegian DFI Norfund and has also borrowed from the European Investment Bank, Ghana International Bank and the International Finance Corporation.
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