NIC Bank expects an over subscription in its ongoing Rights Issue. According to NIC Bank Group Managing Director James Macharia, the trend will not be different from the previous time when the bank went back to shareholders to raise more capital. Macharia says the bank has committed shareholders and he believes that they will all take up their full Rights.

NIC Bank executed a Rights Issue in 2007 of KES 1,153,803,700. The proceeds of the Rights Issue were used to fund NIC Bank’s expansion plans which included NIC Bank’s entry into Tanzania and its branch network expansion, recently in Uganda.The Rights Issue in 2007 was over subscribed by about 48%, according Mr. Macharia, and he says he expects the same with the current Rights Issue.

Following this Rights Issue in 2007, total assets of the Group grew from KES 31.3 billion as at 31st December 2007 to KES 78.9 billlion as at 31st December 2011. Over the same period, Profit before Tax grew from KES 1.0 billion in 2007 to KES 3.6 billion in 2011.

According to to Macharia, the growth and success achieved by NIC Bank in recent years and its future plans has necessitated an increase in its capital base. The bank looks to raise an additional capital estimated at KES 2,073,212,211, which will provide NIC Bank with the required financial strength necessary to pursue both its local and regional expansion activities including entry into Uganda.

The Rights Issue is subject to a minimum subscription of fifty percent (50%) of the New Shares that is KShs. 1,036,606,106 or 49,362,196 New Shares. The Directors reserve the right not to proceed with the final allotment of the New Shares unless this minimum threshold is achieved. Also, should there be an under subsciption on the offer but one above the minimum subscription threshold, the Directors will seek to utilize the funds raised in a manner that will still achieve the objectives set out in the Information Memorandum.