Diamond Trust Bank rights issue over subscribed

Diamond Trust Bank rights issue over subscribed

By Washington Gikunju

Diamond Trust Bank Kenya has received applications worth Sh2.3 billion for its rights issue, surpassing the target by a margin of Sh1.53 billion.

A rights issue is a special type of secondary offer of shares where existing shareholders have the privilege to buy a specified number of new shares from the firm at a specified attractive price within a specified time.

The bank had offered some 15.5 million rights to shareholders at a discounted price of Sh50 expecting to raise Sh776 million on full subscription but surpassed this margin by a whopping 197 per cent.

The Bank Chairman, Mr Mahmood Manji, described the rights issue as a huge success.

“With these new funds we will be able to continue our expansion strategy in Kenya, Uganda and Tanzania,” Manji said. He added that most shareholders not only took up their rights but also applied for many more.

The bank’s principal shareholder, the Aga Khan Fund for Economic Development, took up all its rights through its subsidiary Habib Bank Limited (HBL).

Manji said that HBL operates in 26 countries across five continents and its investment in Diamond Trust will benefit the bank through its expertise in all areas of operations, particularly retail banking, trade finance and human resource training and development.

Manji earlier said the bank plans to continue expanding its network and diversifying its products next year. It has already introduced new asset finance products such as the Shares Loan (to finance the purchase of shares in listed companies) and Floor Plan (to finance the purchase of motor vehicles).

“The new asset finance products we have introduced have significantly contributed to our profitability,” Manji had said at a recent cocktail.

He added that the bank’s ‘Open Banking’ concept had significantly boosted performance by attracting more retail deposits.

“Our performance for the rest of the year looks promising, despite market pressures,” he said.

The bank’s rights issue was intended to raise some half a billion shillings to finance its continued expansion as well as product diversification plans.

The bank currently has 11 branches across East Africa, these include four branches in Tanzania, two of them unveiled this year, two in Uganda, one in Zanzibar and five in Kenya. Its ATM (Automated Teller Machines) network, which was launched in 2004, currently stands at 16 following the installation of new machines in Mombasa mid this year. DTBK is also a member of the countrywide Pesapoint ATM network, which has broadened the bank’s reach to its customers.

Source

Author: ismailimail

Independent, civil society media featuring Ismaili Muslim community, its achievements and humanitarian works.

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