National Bank MD Munir Ahmed (left) with Kajiado Governor David Nkedianye during the launch of the bank’s ‘Jenga Biashara’ financial product targeting small enterprises August 15. PHOTO | DIANA NGILA
What you need to know:
NBK is seeking more capital to give it headroom for additional lending.
Chief executive Munir Ahmed has dispelled claims that the Treasury wants to use the rights issue to dilute its shareholding in the bank.
During the last AGM on May 30, ordinary shareholders approved the cash call to raise Sh13 billion.
National Bank is set to complete the prospectus for its Sh13 billion rights issue in the next two months, chief executive Munir Ahmed has said.
The lender will then submit the document for approval by the Capital Markets Authority (CMA).
Speaking in Kitengela on Friday when he launched the bank’s micro-finance lending department, Jenga Biashara, Mr Ahmed said the bank’s low capital base was hindering its growth.
“We want to move National Bank to the top-tier banks in Kenya by 2017 and to do that we need to expand our capital base by five times,” said Mr Ahmed.
NBK is seeking more capital to give it headroom for additional lending.
The CEO dispelled claims that the Treasury wants to use the rights issue to dilute its shareholding in the bank.
“We have the support of the two major shareholders and we must move fast to raise the money. We hope the CMA will approve our application to enable us complete the process by end of the year,” he said.
The Treasury holds 79 per cent preference shares in NBK while the National Social security Fund (NSSF) holds 21 per cent. In the ordinary shares class, NSSF holds 48 per cent, the public 29 per cent while the government directly owns 22 per cent.
Part of the proceeds of the rights issue will be used to pay off the government’s preference shares, thus diluting the State’s stake in the bank.
CMA is said to be keen on scrutinising the loan-conversion agreements that created the preference shares currently held by the Treasury, before approving use of the rights issue cash to retire the stock.
A task force formed by President Uhuru Kenyatta recommended the creation of the Governance Investments Corporation to run some of its parastatals, but Mr Ahmed said he is not aware of any plans to place the bank under the proposed agency.
“I am not aware of anybody or entity that is seeking to influence the direction of the bank and the two shareholders are in full control of the business,” he said.
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