National Bank Managing Director Munir Ahmed. Photo/FILE
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NBK said it had budgeted to receive proceeds from the cash call by this month but it has now been forced to revise the schedule.
The bank said that the delay has constrained its lending and deposit-taking capacity besides derailing its restructuring as well as expansion plans.
National Bank is facing a capital adequacy crisis following a delay by the Capital Markets Authority (CMA) to approve its Sh10 billion rights issue.
The bank says it had budgeted to receive proceeds from the cash call by this month but it has now been forced to revise the schedule.
NBK, which is 48 per cent owned by National Social Security Fund and 22 per cent by the Treasury, said that the delay has constrained its lending and deposit-taking capacity besides derailing its restructuring as well as expansion plans.
“We are nearing our capital limits; we needed this money yesterday,” said managing director Munir Ahmed.
“In fact, if you look at our loan book once the half year results come out, there won’t be a significant difference from the last quarter since there is as much as we can lend.”
NBK’s loan book stood at Sh47.2 billion in March, having grown 19.4 per cent from Sh39.5 billion December. Its customer deposits grew 4.87 per cent to Sh81.7 billion in the same period.
The bank’s core capital at the time stood at Sh10.4 billion, having increased by more than Sh500,000 in one year. Its core capital to total deposit ratio was 12.3 per cent in March, just 1.8 percentage points above the threshold set by the Central Bank of Kenya.
The lender’s total capital to total risk weighted assets (loans) ratio in the same period stood at 16.5 per cent, being two percentage points higher than the minimum requirement of 14.5 per cent.
According to Mr Ahmed, the bank sent in their information memorandum to the regulator in mid-May after which they were asked to make some amendments which they claim to have made promptly.
Normally, the CMA takes between two and three weeks to reach a decision on such applications. The authority declined to respond to the Business Daily’s queries saying it does not discuss applications with the Press.
“I am not aware of any pending issues on the side of the bank so I do not know why the application has been delayed,” said Mr Ahmed.
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