Diamond Trust Bank is back for a fourth rights issue in recent years from its 11,136 shareholders at a rate of (Kshs 165) $1.95 per share, with each shareholder entitled to buy 1 share for every 10 held. This follows others done in 2006, 2007, 2012 and now this one.
Contrasting the four issues Year – Nov-06 ; Nov-07 ; Jul-12 : Jul-14
Target (Kshs M) – 735 ; 1,600 ; 1,809 : 3,631
New shares (M) – 15.5 ; 23.3 ; 24.4 : 22.0
Price (Kshs) – 50 ; 70 ; 74 ; 165
Ratio – 1:8 ; 1;6 ; 1;8 : 1:10
Budget (Kshs M) 41.6 ; 54.7 ; 57.6: 100.1
- The IFC remains as a principal funder and shareholder for the bank.
- Diversification has paid off with the bank having 30% of assets and 19% of profits from outside Kenya. While 77% of Diamond Trust’s $61 million after-tax profit is from Kenya, the Tanzania and Uganda operations contributed about $7 million each of profit with Burundi trailing at ~$150,000
- They have extended traditional banking services in the mobile and card age by having M-Pesa at all their ATM machines. They also issue prepaid cards for NationHela, NakumattGlobal and MiCard and handle remittances/money transfer for WesternUnion, MoneyGram and XpressMoney
- Other institutions that may need to have rights issues or raise capital this year include ABC, Commercial Bank of Africa, Consolidated and Equatorial banks.