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Kenya Bank to Spend UGX 25 Billion on Uganda Subsidiary


NIC Bank expects to complete its Sh2 billion rights issue by end of July, making it the second listed firm to tap the capital markets this year.

Firms issue bonus shares to raise growth capital
Mr James Macharia, the bank’s chief executive officer, said that the rights issue was awaiting requisite approvals.

Mr Macharia spoke on Wednesday during the signing of an agency banking partnership with Kenya Post Office Savings Bank (Postbank).

“We are in the process of getting advisors and service providers. We have an annual general meeting scheduled for May 2, where we will get formal approval from our shareholders,” he said.

During the release of its full year results late last month, NIC officials said they would seek an increase in the authorised share capital and subsequent raising of an additional Sh2 billion through a rights issue.

Shareholders will also approve the setting up of a Uganda subsidiary on which the bank is expecting to spend Sh961 million (USh25 billion).

“Thereafter it will be probably six weeks or two months maximum and hopefully after that the money will be in the bank,” Mr Macharia said.

NIC will come to the capital market for cash at a time when investors, who have been going for short term fixed income securities and Treasury bills, are cautious about investing in stocks.

However, Mr Macharia said that the bank was optimistic that the rights issue would be a success.

In 2007 the bank offered 16.48 million shares through a rights issue that attracted Sh1.7 billion and oversubscription of 49 per cent.

On Wednesday, NIC and Postbank signed an agreement that will allow NIC’s customers to access their accounts though Postbank’s 97 branches and its agency banking model country wide.

NIC has 20 branches, its customers will now be able to make transactions such as cash depositing, withdrawals, and loan payments through Postbank’s branches.

Business Daily

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May 03, 2012
NC Bank in Uganda To specialize in Asset Financing
by: Anonymous

NC Bank from Kenya which is yet to officially announce its commercial operations in Uganda will be focusing on asset financing in a move intended to support businesses yearning for the service.

John Okulo, the bank's managing director told The Independent in an exclusive interview that the bank has seen gaps in this product hence prompting them to start business in Uganda.

"We are going to specialise in asset financing for the start and in future, after we have fully established ourselves, we will embark on other products," Okulo said.

"We are starting as a corporate bank and our intention is to add value to the economy through supporting companies that need financing in assets," he said.

NC bank is a subsidiary of National Industrial Credit Bank (NIC), in Kenya which is now establishing its presence in other East African countries. The bank already has six branches in Tanzania and Okulo says they will soon be going to the rest of the countries.

The Independent Newspaper
2 MAY 2012

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