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Trans-National Bank in Sh1bn private share sale plan

Trans-National CEO Sammy Lang’at.  PHOTO | FILE
Trans-National CEO Sammy Lang’at. PHOTO | FILE 

Trans-National Bank plans to raise Sh1 billion through a private share offering to finance its expansion plans.

The lender, classified among Kenya’s small-tier banks, said the private placement would help to grow the ownership base besides funding the opening of more branches.

Trans-National is ranked 35th in size out of Kenya’s 44 banks, with 39,000 deposit accounts which give it a market share of 0.2 per cent.

“The funds will help support growth of the bank through opening more branches countrywide,” said chief executive Sammy Lang’at told the Business Daily in an interview last week.

“We also want to broaden the ownership of the bank so we can attract more customers.”

Mr Lang’at disclosed that Trans-National had opted for a restricted stock offering rather than a public share sale because the lender is targeting sophisticated investors.

He added that the bank did not have near-term plans for an initial public offering.

The plans to raise expansion capital come at a time when the bank has embarked on refurbishing its branches after adopting a seedling for its logo, to reflect growth.

Trans-National’s net profit dropped by a quarter to Sh158.1 million in the period to December 2013 compared to Sh213.3 million a year earlier, impacted by lower foreign exchange earnings and increased provisions for bad loans.

It currently has 17 branches and plans to open two new outlets by end of the year.

Mr Lang’at said the lender has revamped its IT platforms to offer services through electronic channels such as mobile, Internet and agency banking as well as use of its debit and credit cards accepted on the Kenswitch network.

The small lender started off as Transnational Finance in 1984, a non-bank, deposit-taking institution that also provided hire purchase and other loans.

It established a separate fully-fledged bank in 1985 dubbed Trans National Bank Ltd. The two financial firms merged in 1996, and Transnational Finance ceased to exist.

Transnational’s ownership is associated with confidantes of former President Daniel arap Moi.

Sovereign Trust, a company associated with Joshua Kulei, a former aide to the ex-president, has 23.03 per cent shareholding in the lender.

Simbi Investors, associated with Simeon Nyachae, former provincial administrator and minister during Moi’s regime, has 8.2 million shares or 4.11 per cent of the bank; while Losupuk Ltd, associated with the late former vice president George Saitoti, holds (2.79 per cent).

Other major shareholders are listed as Archers and Wilcock Ltd with a 23.75 per cent stake, and Kenyerere Ltd – associated with Jared Kagwana - with 2.15 per cent stake.

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