Bank M plans right issue

Bank is planning to raise 30bn/- through right issue and senior note in this second half, in a bid to boost its core capital to drive expansion.

The right issue expected to raise 20bn/- while senior debt or senior note -- a bond 10bn/- which will see the core capital and total capital increased by 15 per cent from the current ratio.

The bank current capital is 74bn/-. Bank M Deputy Chief Executive Officer Ms Jacqueline Woiso said the 30bn/-capital will be completed before this year end to commensurate with the increase of scale of operations.

“The right issue of equity shares and issuance of corporate bonds, the Core Capital Adequacy Ratio and Total Capital Adequacy Ratio of the bank are expected to improve above 15 per cent levels,” Ms Woiso said.

The right issue envisages to raise additional tier 1 capital, which is the eighth time since the bank inception some eight years ago, while the senior note, a special bond that is paid first in case of the issuer bankruptcy, follows under tier 2 capital.

Last October the bank split its shares to face value of 400/- per share from 1,000/- per share of June same year. Cumulatively, Basic Earnings Per share dropped to 122/- in June this year from 392/- of same period last year.

The declining of the earning per share, amid a hefty profit, is seen as a preparation for the listing of the bank by diluting its share ahead of IPO.

In May sources told ‘Daily News’ that the bank has shown interest on listing on Dar es Salaam Stock Exchange main market but was yet to file a formal application.

“They have only shown interest but are yet to submit a formal application,” she said. “I could be in a better position to comment further when the bank submits an application.” Also, reports from Nairobi, Kenya say Bank M has acquired a majority stake in Oriental Bank.
Source: Daily News, reported from Dar es Salaam, Tanzania
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