DTB opens Sh1.8 billion rights issue for regional expansion
Diamond Trust Bank yesterday opened its rights issue targeting funds to expand its East Africa presence. The group with subsidiaries in Tanzania, Uganda and Burundi is targeting to raise Sh1.81 billion in the next three weeks. The rights are being offered at a discounted price of Sh74 for one share out of every 8 held, and the process will close on August 10.
DTB Group CEO,Nasim Devji, said the proceeds will go to funding its asset growth, investment in the branch network and alternative channels in Kenya and additional investments in its subsidiaries. “DTB’s Vision 2020 is anchored on some strategic initiatives like broadening the group’s target customer segments by pursuing a financial inclusion strategy aimed at the micro-enterprise sector,”said Devji.
The bank plans to open a micro-finance unit within its operations where it will carry a pilot project in Kenya for two to three years. Devji said it is also planning to start Agency banking in October in a bid to reach the micro-enterprise segment. “We also plan to expand the Group’s presence in other countries within SSA ,” she added.
Devji said the top five shareholders including Aga Khan Fund for Economic Development, Jubilee Insurance, Diamond Jubilee Investment of Uganda, International Finance Corporation who hold a total 51.68 per cent of the shareholding, intend to take up their rights. The company is issuing 24.5 million new shares which will bring the number of its ordinary shares trading to 220,100,096.
This is DTB's third rights issue, previous ones held in December 2006 and 2007 consecutively were oversubscribed. DTB due to announce its first half results before the end of this month. It had reported a 24 per cent jump in 2011 pre-tax profits to hit Sh2.99 billion. The new shares will start trading at the NSE on September 12.