CBA Group Eyes Accelerated Growth On Medium Term Note Success
Nairobi, January 20, 2015
Kenya’s largest privately owned bank, CBA Group, has listed its maiden Medium Term Note today in the Nairobi Securities exchange (Fixed Income Segment) in an official bell ringing ceremony.
In the First Tranche of the Medium Term Note issue, CBA raised Kes7 billion, which was an oversubscription by 40 per cent, to deem the program a remarkable success. The First Tranche of the Medium Term Note was issued to the public in notes amounting to Kes5 billion.
As a result of the oversubscription, CBA elects to exercise the green shoe option of Kes2 billion. This means that CBA has the right to sell investors more securities than it originally planned.
The bank’s plan was to raise Kes8 billion over a two-year period beginning with Kes5 billion as the First Tranche in November 26, 2014 and the remainder by the end of June 2015.
“Last year we embarked on a journey to this growth milestone with the launch of the Medium Term Note programme in December. I am happy to report the first tranche of the Medium Term Note Program was very successful. This is an affirmation of the soundness of our strategy by the investment community and is a step in the right direction for the bank. This capital injection is crucial to our regional expansion plans,” said MD CBA Group Isaac Awuondo during the bell ringing ceremony.
The Medium Term Note program was necessitated by CBA’s strategy to expand regionally into new markets which required significant amounts of funds, over and above new capital injections by shareholders.
“Our main aim for raising this capital was to aid us enter new African markets. This vision is now a step away from being a reality. We will deliver on our promises and I urge our investors to continue investing in the bank and in our future. Let us grow our economy together,” said Mr Awuondo.
CBA’s key strategic objective is to acquire, maintain and grow market share, so as to become an integrated regional financial services provider. The bank therefore, intends to extend its presence in Kenya, Uganda and Tanzania in which it already has operations.
“The country’s vision 2030 agenda focuses on local and regional expansion, just like CBA. The Mombasa-Nairobi standard gauge railway, whose construction starts next year, is set to open up at least 40 business centers but divert business from the road to the port city,” said Desterio Oyatsi, CBA Board Chairman, during the bell ringing ceremony.
He went on to add: “This plays in to CBA’s vision of being a respected and significant financial services business partner in Africa. CBA believes in creating lasting partnerships that enhance economic growth.”
The success of CBA Group is unmatched; first with its revolutionary mobile banking platform, M-Shwari in partnership with Safaricom Ltd and now the oversubscription of First Tranche of its Medium Term Note program.