Jamii Bora’s plan to raise Sh1bn gets the nod

Shareholders of Jamii Bora Bank have approved a plan to raise Sh1 billion by the first quarter of 2015 to increase its capital base.

Initially, the financial institution had intended to raise Sh330 million annually over the next three years, but opted to reduce the period to one year. This is due to the coming into effect of the Central Bank of Kenya’s new capital requirements from January 2015.

Speaking to the Nation after the bank’s annual general meeting (AGM) Tuesday, the chief executive, Mr Sam Kimani, said they were considering a number of options.

They include launching a rights issue, undertaking a private placement of new shares to investors, converting its Sh1 billion debt into equity or issuing another long-term debt of Sh1 billion.

“We need this capital for growth. You know in the last two years, we have basically been doubling our balance sheet, and we believe that by 2015, we will require additional capital,” Mr Kimani said in an interview.

He said the bank was looking for strategic investors, especially banks that may be willing to inject in more capital.

“At our point of growth currently, we would want to consider bringing in strategic investors, who can bring in not just money, but also value in terms of business growth. We have also got a corporate bond of Sh1 billion, which we raised last year and the people who bought it have been requesting us to convert part of the bond to equity,” said Mr Kimani.

The capital raising plan will be launched in the last quarter of this year so that the bank is able to secure the funding within the first quarter of next year.

The bank’s shareholders also approved the creation of an extra five million shares priced at between Sh230 and Sh250 currently at the over the counter market (OTC), according to Mr Kimani.