NIC Bank gets nod to raise Sh8bn for growth

NIC Bank Group managing director John Gachora. NIC Bank has reported a 27 per cent rise in earnings on the back of increased lending and improved performance by the group’s subsidiaries. FILE PHOTO | DIANA NGILA |

What you need to know:

  • NIC Bank Group managing director John Gachora said the bond would be issued in phases over the next five years.
  • The money, Mr Gachora said, would be used to strengthen the bank’s capital base to support growth in lending to the retail and business segments.

The capital markets regulator has approved NIC Bank’s plan to raise Sh8 billion through a corporate bond to finance expansion.

NIC Bank Group managing director John Gachora said in a statement on Tuesday that the bond would be issued in phases over the next five years.

“The approval by the Capital Markets Authority allows us to enter the next phase of the transaction.  We expect to be in the market with the first tranche this month,” he said.

LENDING TO RETAIL

The money, Mr Gachora said, would be used to strengthen the bank’s capital base to support growth in lending to the retail and business segments.

NIC Capital Limited, a subsidiary of NIC Bank Group, is the lead transaction adviser.

NIC Capital managing director Maurice Opiyo said the bond provided the group with an opportunity to tap into the favourable conditions prevailing in the debt market to raise additional capital as it gears to grow its footprint in the region.

“Investor appetite for debt securities has been positive going by the success of recent bond issues,” Mr Opiyo said.

The bank has also laid out plans to raise Sh2 billion through a rights issue after the shareholders’ approval during an extraordinary general meeting last week.

“The firm considers a combination of debt and equity as the right mix to finance business expansion,” Mr Gachora said.