The DCB Commercial Bank Plc board chairman, Prof Lucian Msambichaka, (centre), receives a cheque from retired President Benjamin Mkapa shortly after the former head of state bought shares in the lender’s Rights Issue. On the left is the bank’s managing director, Mr Godfrey Ndalahwa. PHOTO| SALIM SHAO
What you need to know:
The money will bring DCB’s total paid up capital to Sh25.8 billion from the current Sh16.9 billion, the bank’s board chairman says
Dar es Salaam. A rights issue for the DCB Commercial Bank Plc officially went live yesterday as the Dar es Salaam Stock Exchange (DSE)-listed lender seeks to raise a total of Sh8.9 billion to boost its capital.
Once successfully raised, the money will bring DCB’s total paid up capital to Sh25.8 billion from the current Sh16.9 billion, the bank’s board chairman, Prof Lucian Msambichaka, said in Dar es Salaam yesterday.
“This initiative will grow the bank’s capacity to conduct business, stimulate growth and increase efficiency of its operations,” he said.
According to the bank’s managing director, Mr Godfrey Ndalahwa, the money will help DCB Commercial Bank Plc in implementing its five-year business plan, which was approved last year.
The plan envisages, among others, to boost the bank’s asset size from the current Sh154 billion to Sh362 billion in a period of five years.
The plan also seeks to boost the number of DCB’s customers from around 156,000 to 300,000 in five years.
The ratio of Non Performing Loans (NPLs) to total gross loans, said Mr Ndalahwa, should also go down from the current 17.7 per cent to only about seven per cent in five years.
The new capital will help DCB Commercial Bank Plc to open five new branches and 25 service centres across the country while also banking on technology to reach the envisaged number of new clients.
Mr Ndalahwa said each share fetches a discounted price of Sh265, noting that each of the existing shareholders will be allowed to buy one on every two shares he/she has.
Last Friday, DCB’s share closed at Sh340.
“Both existing and new investors can immediately start applying to purchase the new shares. Allotment to new investors will, however, be made later upon confirmation that the all existing shareholders have not been able to fully take up their allotted shares,” he said.
A total of 33,913,948 shares are up for grabs as trading of the bank, which was the first to list on the DSE, remain suspended to pave way for the Right Issue.
The first phase of the share sale, which involves only existing shareholders, started yesterday and will be completed on December 3 while the second phase will start on December 4 and end on December 18.
Since the bank was established 17 years ago, it has issued dividends amounting to Sh11.8 billion to its shareholders from a total net profit of Sh16.5 billion.
