[Photo/businessdaily]
National Bank of Kenya shareholders have unanimously approved the issuance of bonus shares aimed at shoring up the bank’s capital base.
The decision was ratified during the bank’s 48th annual general meeting held on Friday.
“We are grateful to our shareholders for approving the bonus share as this shows the level of confidence they have in the future of National Bank,” said National Bank Chairman Mr. Mohamed Hassan. “Following the approval we will issue one new share for every 10 shares held by existing shareholders. This will help us raise Sh153.99 million in reserves which we will capitalize.”
The Additional 30.79 million shares will be issued at a price of Sh5, bringing the total fully paid-up share capital at National Bank to 338.79 million ordinary shares.
The bank recorded a profit before tax of Ksh 182 million for the period ending 31 December 2016, marking a significant increase in profits compared to 2015 which stood at a loss of Ksh 1.6 billion. This is as a result of better management of cost of funds and increased volumes from clients.
The business grew interest income to Ksh 12.3 billion from Ksh 12.2 billion in the same period 2015, representing 1% increase. Interest expense declined 27% from Ksh 5.9 billion to Ksh 4.3 billion this year due to deliberate shift in funding mix from expensive deposits.
“This has been a momentous growth for us, overcoming a difficult external environment and emerging stronger and well positioned for sustained growth,” National Bank of Kenya Chief Executive Officer Wilfred Musau said. “The bank requires additional capital to support this growth and we thank you shareholders for your continued support towards achieving this goal”.
In 2016, the bank continued positioning itself as the go-to bank for the unbanked and low-end customers who are “the pillar” of developing economies, successfully revamping its Small Enterprise Banking Segment and Amanah Business Segment.
“This has helped to accelerate our balance sheet growth while catering for financial requirements of Small enterprises,” Mr. Musau said.
As part of its promise of excellent service delivery as well as provision of value adding banking solutions to its customers, the bank has partnered with institutions to offer Real Time collections via its Payment Gateway platform for Institutions.
“This has given us an opportunity to grow a cheap deposits base while offering our customers accessible, easy and real time banking that lets them manage their accounts, wealth and all other financial problems within minutes’’ Mr. Musau said.