Jamii Bora Bank to proceed with capital raising plans in 2nd half of 2016 to increase capital

 
 
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Tags:
Banking
SME
Banks

Industry:
Banking

Location:
Nairobi - Nairobi - Kenya

Subject:
Mergers

NAIROBI, Kenya - July 6, 2016 - PRLog -- Jamii Bora Bank Limited (JBBL), one of the fastest growing SME banks in the country intends to raise capital 2nd half of 2016. The lender's core capital and total capital to total risk weighted assets thinned to 15.2 percent and 16.0 percent in the first quarter of 2016 from 22.0 percent and 22.8 percent, remaining above the minimum statutory ratio by 4.7 and 1.5 percentage points respectively. Management is cognizant of the need to increase its buffers and has already received approval from its shareholders to proceed with a cash call. This will serve the dual purpose of strengthening its capital adequacy ratios and also assist the bank sustain its current and future growth strategy.

The lender recently raised KShs1.2 billion in form of convertible debt from Equator Capital Partners and Progression Capital Africa Limited which is expected to be converted before November 2016 and is looking to raise KShs3.8 billion  of equity.. KShs3 billion will be injected from strategic investor/s while the rest will be raised through a rights issue. Management expects this to take place before close of the year.

The third tier bank which currently has over 400,000 customers and a network of 26 full-fledged branches and 3 satellite branches across the country is looking to use the funds to grow its rural and urban network, invest in technology and innovations and also increase its capacity to lend in the SME sector. The lender recorded a 56 per cent rise in its loan book to KShs.10.48 billion in the first quarter of 2016. The lending was largely supported by the bank's ability to mobilize deposits of KShs10.55 billion up from KShs. 8.57 billion within the same period.

The robust loan book growth largely boosted the lender's asset base by 26 per cent to KShs 17.28 billion. Notably, the lender intends to increase its asset base to KShs.25 billion by remaining focused on addressing the needs of the Enterprises. The Small and Medium Sized Enterprise (SME) sector, which is estimated to account for over 80% of employment opportunities has grown remarkably over the last few years and is expected to maintain the same trend.

The bank's net interest income rose from KShs.133 million to KShs.192 million within the same period. Nonetheless, owing to its branch expansion plans, the lender's operating expenses grew at a faster pace of 20 per cent more than itsexpansion operating income of 9%.  The lender's branch network increased from 23 to 26 within the same period. There are plans to open 2 branches in Embu and Ruaka and three satellite branches at select retail outlets.  The slower income growth is as a result of the heavy investment in expansion where the branches are yet to break-even but expected to do so in the next 6-12months.

For more information visit our website http://www.jamiiborabank.co.ke

Contact
Edwin Mwai
***@jamiiborabank.co.ke
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Tags:Banking, SME, Banks
Industry:Banking
Location:Nairobi - Nairobi - Kenya
Subject:Mergers
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