By John Oyuke and Reuters
Equity Bank has won shareholder approval for a 10-for-one share split.
Chief Executive James Mwangi said this would help the bank admit small investors, who make up the bulk of its banking customers, after complaints the high price of the share was locking them out.
Equity shares were trading at Sh125 in Wednesday’s session, down from a peak of 341 shillings in June last year. Mwangi said the peak prices were turning the bank’s shareholders into a club.
"Do we want to be an exclusive club when more than half of the population has supported us by banking with us?" he asked shareholders.
Mwangi was speaking during the bank’s fifth Annual General Meeting at the Kenyatta International Conference Centre (KICC) yesterday.
The bank sought among other things approval by the shareholders of the proposed split of its shares announced during the release of the 2008 financial results, and a dividend of Sh3 per share.
Small building society
The split still has to be approved by the capital markets regulator, Capital Markets Authority (CMA).
Founded in rural central Kenya as a small building society, the bank uses a low margin, high volumes model that has been credited with spreading banking to the poor who hitherto had been ignored by multinational banks.
Equity had pre tax profits jump of 111 per cent to Sh5.022 billion for the year ended December 31 2008 from Sh2.378 billion the previous year.
The Bank’s total operating income went up by 116 percent to reach Sh12.6 billion while operating expenses grew by 120 percent to Sh7.6 billion up from Sh3.5 billion.
