KCB new shares Start Trading at EAC Markets

Over 730 million new KCB Group shares were today listed and commenced trading at the regional stock exchanges.
A total of 732.3 million shares were taken up against 887.1 million shares offered in the KCB Rights Issue which opened on July 1, 2010 and closed on July 23, 2010. This represented an uptake of 82.56 percent.
“The introduction of these new shares results in over 2.9 billion issued ordinary KCB shares that are eligible to trade in the Nairobi Stock Exchange, the Dar es Salaam Stock Exchange, the Uganda Securities Exchange and the Rwanda Over-the-counter Market, where KCB shares are cross-listed,” KCB Group Chairman Peter Muthoka said.


The bank received 55,996 applications from shareholders for a total of 637.2 million rights provisionally allotted to them. The shareholders also applied for 95.1 million additional shares in line with the provisions of the Information Memorandum.
The bank’s new capital position means that it can double its business over the coming years within the Central Bank of Kenya’s prudential capital ratios hence increasing opportunities for it to grow revenues and enhance shareholder returns, he said.
“It creates the appropriate avenue for the bank to grow key assets areas such as mortgage lending and support our young subsidiaries to stabilize and start returning profits,” said Muthoka.


The total value of shares taken up was KShs12.5 million of which about KShs 12 billion will be credited to our capital account after expenses.
Following the allotment, the total number of issued ordinary shares for KCB increases to 2.9 billion ordinary shares of KShs1 each up from 2.21 billion ordinary shares held before the rights issue.


The balance of 154.7 million untaken rights form part of the bank’s authorized capital for future issuance. The authorized capital for the bank is 3.5 billion shares.
During the third Rights Issue, KCB Group strengthened and modernized the documentation process to ensure security of information and ease of retrieval.
Muthoka said the bank wants to implement a structured engagement programme with investors to give them the opportunity to understand business in more depth in terms of future prospects and value generation initiatives so that they can continue to invest in the business.


“We shall also continue to embrace transparency and professionalism in line with global best practice ensuring our operational standards are world class and efficient as we build the business for the future,” he added.


The bank offered 887.1 million ordinary shares to eligible shareholders at the ratio of two new shares for every five ordinary shares held at a discounted offer price of KShs17.


KCB Group held other Rights Issues in 2004 that raised KShs2.3 billion and in 2008 whose proceeds topped KShs5.2 billion.
Yesterday, KCB traded 1,613,000 shares at a price of Kshs 18.75. In the last 12 months, the bank’s shares have traded at a high of KShs 24 and a low of KShs 17.65.
KCB is a regional brand with presence in Kenya, Uganda, Tanzania, Rwanda and Southern Sudan and has a total of 212 branches. The bank has the largest balance sheet at KShs220 billion and over 370 Automated Teller Machines (ATMs) with connection to 110 PesaPoint units and 250 Kenswitch outlets.