KCB Group Limited shareholders on their aim to boost its capital levels, have approved KShs 10 billion right issue during Annual Gerenal Meeting held in Nairobi. The organization has scheduled an additional of one billion new shares to be made towards the end of this year.
The shareholders also gave a go ahead for the payment of a dividend of Ksh2 per share, a half to be paid in cash and the balance in the form of shares, known as a scrip dividend.
KCB Group Chairman, Ngeny Biwott said that the funds will be used to support its regional expansion and help in boosting its minimum capital requirements to allow doubling its loan book and its deposits.
Mr Biwott said that “The Scrip Dividend is part of KCB Group’s strategy to conserve cash payout from the Company’s retained profits in the light of its commitment to business growth, and in order to allow its shareholders to derive value on account of higher dividend in future due to increased shareholding”
He also added that, “The issue will enable shareholders to increase their investment without incurring dealing costs”
KCB is known to operate as a diversified financial service provider spanned in East Africa region with a large branch network in the Region of over 250 branches, 962 ATMs and 12,000 agents offering banking services on a 24/7 basis. It is seeking to take up huge infrastructure projects in Africa with an aim of hitting 10 markets by the year 2020. Currently, it provides both retail and wholesale services in Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan and Ethiopia.
In the recent past, the bank ventured into new business lines which led to new streams of income and high lending rates. This saw KCB registering an increase of 16% in profit after tax and Post Tax earnings of Kshs 19.6 billion in December 2015 which rose from 16.8 billion in 2014. KCB’s international business contribution rose from 12.8% up from 8.3% in 2014.
In 2010, KCB managed to raise Ksh12.4 billion in a rights issue. The bank says it is continuously monitoring its capital and funding position to ensure they are within the regulatory and internal buffers.
“We believe the market fundamentals are right for us to raise extra funds and we are confident about the stability of KCB. We remain focused to our strategy of growing the business in East Africa and spread our wings further in Africa,” said KCB Group CEO Joshua Oigara.
Since last year, KCB has collaborated with Safaricom through strategic partnership and product innovation in developing superior expertise in micro lending. According to latest Bank statistics, it show that the Bank disbursed over KShs 8 Billion in loans to over 5 million KCB-Mpesa customers, instantly on their mobile phones. The focus on the micro, small and medium enterprises is to not only harness the large numbers of businesses in the region but to also work with them to grow into mid-sized and even large corporates of the future.