National Bank Shareholders Approve Alternative Sources of Capital at AGM

Shareholders of National Bank (NBK) have decried the delay in the planned rights issue, approved in the 2013 AGM- which was to boost the bank’s objectives in the transformation program.  National Bank has the since the start of implementation of the transformation program after the 2013 AGM achieved good performance, doubled of assets and expanded the scale of business. It however continues to struggle due to capital inadequacy. Speaking at the bank’s annual general meeting at the KICC, shareholders urged Treasury and NSSF- the two major shareholders in the bank-to move fast and agree a way forward so not to delay the rights issue any further.

Shareholders, in the meantime, have approved request by the management of Bank to turn to other sources of capital, including sourcing debts from international funds and partners.

In the well-attended meeting, the shareholders gave a nod to the retention of Deloitte and Touche as auditors as well as endorsed recent changes by the bank’s board and management expected to strengthen corporate governance.

“National Bank, in spite of the serious capital shortfalls  has established a  profitability and growth trend since 2013. Loan facilities that resulted to our 2015 loss on account of heavy provisions against loan loss are fully secured and the management is reporting positive gains in the recovery process. This, and  the report of a profitable Q1 2016, herald good tidings,” said Chairman Mohammed Abdulrahman Hassan.

Read: National Bank Strengthens Credit Risk Function to Record Ksh 478Mn Q1 2016 Profits

Wilfred Musau, acting Managing Director and Chief Executive while responding to shareholders query on earnings said the bank had bounced back in Q1 2016 with a profit after tax of Ksh.335M.  Measures are already in place to ensure better performance from all divisions.  “The management of National Bank  is confident to deliver on objective of our transformation program which is to be a leading profitable tier 1 digital bank . With the approval from shareholders to source capital elsewhere, we can fully realize the potential of our transformation program,” he said.

The shareholders have assured the management team of their support.

In 2015, the bank registered a 3.3% growth in net loans & advances to KShs 67.8b and increased customer’s deposits by KShs 5.6b to KShs 110.6b while Assets grew from 123B to Ksh125B. The bank’s Total revenue from operations remained steady at  Ksh 9.55B in 2015 despite the bank reporting a loss of Ksh1.15B.

National Bank is also working to launch mobile loans services via its NatMobile platform, as the banks takes advantage of its robust technology deployment driven by the  transformation program.