National Bank of Kenya is seeking funds to keep its head above the waters after capital requirements fell below the regulator’s requirements.
The lender has been waiting for its top shareholders, the National Social Security Fund (NSSF) and the Government, who own a combined shareholding of 70 per cent to inject more capital. NBK wants Sh4.4 billion shareholder loan to shore up its capital after total risk-weighted assets ratio stood at 11.9 per cent as at December 2016, which is 2.6 percentage points below the CBK’s statutory minimum of 14.5 per cent.
“We are engaging our shareholders... we are coming up with a proposal to look at debt to bridge the gap as we await for equity. We have done presentations to our shareholders and we have received positive feedback,” NBK Chairman Mohamed Abdirahman Hassan said. Plans to raise capital have been delayed over negotiations to collapse State owned banks including National Bank, Consolidated Bank and Development Bank into one unit.
NSSF that owns 48 per cent of the bank is a major determinant in the consolidation. “Consultations are ongoing following related studies that analysed feasibility of mergers. Not sure we can consider NSSF an impediment. The issue is about consensus building on the preferred option,” Privatisation Commission CEO Solomon Kitungu said.
The lender issued a bonus share to retain Sh153 million more than the Sh147 million the bank made last year after taxes. 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.