The bank’s chief executive officer, Munir Ahmed, said last Friday that the additional capital of Sh10 billion the bank will seek through the rights issue will be used to open operations in Tanzania, South Sudan, Uganda and Somalia.
“We have already commenced preliminary surveys of the regional market,, but we see it kicking off in the next 12 months,” said Ahmed.
Analysts have termed the bank’s expansion plans, especially in Somalia, as strategic and not ambitious given the country’s return to stability and any key business and trade opportunities that are set to open up.
Also, given the current macro-economic stability and rising investor confidence in the country, the plan to raise money through a rights issue will be well received by the market, with the prospects of attracting strategic investors like the World Bank’s investment arm, the International Finance Corporation.
“The bank has a forward looking management and we anticipate them to propel the bank to high growth levels,” Ashanti Research analyst Kamanda Morara said on the phone.
“The bank’s deposits have also grown so fast and its plan to go into Islamic banking position it very well to take advantage of emerging growth opportunities in the counties and the regional countries.”
The bank has unveiled a new logo and adopted yellow colours away from the traditional green in what the management says signals the start of a new way of doing its business. The bank has previously heavily relied on the government for business and retail investors, but is now warming up to corporate investors and small and medium enterprises in a turnaround strategy.
It aims to transform itself into one of the top-tier banks in the country in the next five years with its turnover rising to Sh31 billion by 2017 from Sh8 billion in 2012.
“Through this transformation strategy, we want to regain NBK’s glory and propel it back to the Top tier banks by growing our balance sheet, expanding our market footprint, managing risks and streamlining costs,” Mr Ahmed said.