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K-Rep report reveals owners of Sh3.8bn bank

A K-rep Bank branch along Kenyatta Avenue in Nairobi. Centum Investments has placed a bid for 65.9 per cent shares of K-Rep Bank, in a transaction that values the lender at about Sh3.8 billion. PHOTO | SALATON NJAU | NATION
A K-rep Bank branch along Kenyatta Avenue in Nairobi. Centum Investments has placed a bid for 65.9 per cent shares of K-Rep Bank, in a transaction that values the lender at about Sh3.8 billion. PHOTO | SALATON NJAU | NATION 

Kimanthi Mutua, the founding managing director of K-Rep Bank, is the single-largest individual owner of the lender controlling a 0.75 per cent stake in the lender, which is now subject of an acquisition bid by the NSE-listed investments firm, Centum .

Documents seen by the Business Daily, which for the first time reveal the 18 shareholders behind K-Rep Bank, indicate that the estate of the late Bonaya Godana, a former Foreign Affairs minister, is the second largest individual owner of the lender with a 0.68 per cent stake.

Other prominent individual shareholders of K-Rep Bank include former diplomat and ex-chairman of the Truth, Justice and Reconciliation Commission, Bethuel Kiplagat, who has a 0.36 per cent stake, while a past chief executive of Centum and TransCentury Tony Wainaina has 0.12 per cent shares.

Centum Investments has placed a bid for 65.9 per cent shares of K-Rep Bank, in a transaction that values the lender at about Sh3.8 billion.

Details of the exiting shareholders who are set to pocket up to Sh2.5 billion in exchange for the two-thirds stake of the bank are yet to be made public.

People familiar with the ongoing negotiations however say K-Rep’s institutional shareholders, who include African Development Bank (21.98 per cent stake), K-Rep Group (19.74 per cent), International Finance Corporation (15.18 per cent), and FMO of Netherlands (6.59 per cent) are among the most likely sellers.

Mr Mutua served as the founding MD of K-Rep Bank from 1999 to 2010, and was instrumental in transforming what started as a community micro-enterprise program into a full-fledged commercial bank.

He was succeeded by Albert Ruturi, the current managing director.

The bank began operations in 1984 as a community program dubbed Kenya Rural Enterprise Program (K-Rep), backed by World Education Inc, a Boston-based non-governmental organisation. K-Rep acquired a banking license in April 1999 and started operating as K-Rep Bank in December 1999.

The lender reported an 83.6 per cent jump in full-year after-tax profit for 2013 to Sh360 million.

As at March 31 this year, the bank’s quarter-one net profit stood at Sh120 million, while its balance sheet had total assets of Sh14 billion.

Centum already holds 1.66 per cent shares of K-Rep, which is categorised as a tier-three (small) lender as per the Central Bank of Kenya classification based on the size of its balance sheet and market share.

A successful acquisition by the Nairobi Securities Exchange-listed investment firm will make it the majority shareholder of K-Rep with a 67.54 per cent stake.

The list of K-Rep’s shareholders also includes former Deloitte executive and finance consultant Mwenda Thiribi with 8,241 shares.

Prof Kabiru Kinyanjui, chairman of the Kenya National Examinations Council, is the fourth largest individual investor with 7,495 shares.

Prof Kabiru is also the chairman of K-Rep Group – an investment vehicle for the bank’s founders – which owns 450,000 shares or 19.74 per cent holding. K-Rep Group has also said it will acquire additional shares to increase its stake to 22 per cent.

Other faces behind the bank include Mr Aleke Dondo, a former managing director at K-Rep Development Agency – the research and development subsidiary of K-Rep – who has 6,495 shares.

Dr Francis Kihiko, the chief executive of Jitegemea Credit Scheme has 5,495 shares. Prof Judith Bahemuka, a sociologist and rural development lecturer at the University of Nairobi, has 4,995 shares while Mr Francis Kimunyu is listed as K-Rep’s smallest investor with 500 shares.

In 2011, IFC, the World Bank’s private sector lending arm, invested $1 million (Sh86.7 million) in the bank in return for a 15.18 per cent equity stake or 346,000 shares.

ShoreCap International (SCI), where Kenny Nwosu serves as an investment officer, is ranked fifth with 247,447 shares or a 10.86 per cent stake. Mr Nwosu is the chairman of K-Rep Bank, a position he has held since March 2009.

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