CRDB Bank's 152bn/- right issue has been described as the biggest capital raising initiative in the history of the Dar es Salaam Stock Exchange (DSE).
The right issue, conducted in a span of one month, was successful by 100 per cent and was staged when there were three primary offers, from two banks and unit fund.
The DSE Chief Executive Officer, Mr Moremi Marwa, said the right issue breaks all records to become the biggest capital raise followed by TBL's 120bn/-.
"Since it started listing shares in 2008, CRDB has demonstrated the real meaning of creation of liquidity through the stock exchange," Mr Marwa said during the listing of addition of the bank.
The DSE chief also said the addition 435.3 million shares elevated the bank to become the biggest listed firm with huge number of trading shares standing at 2.6 billion.
The Capital Market and Securities CEO, Ms Nasama Massinda said the right issue's full subscription demonstrated investor's confidence on stock market.
"This situation is an indication that there is high demand for capital market products," Ms Massinda said in a speech read on her behalf by CMSA marketing manager.
The bank right issue which was the second since listed at the bourse almost a decade ago was subscribed 70.5 per cent by shareholders and 29.5 per cent by three underwriters.
The CRDB Chairman Mr Martin Mmari said the right issue would enable the bank to post good financial results as the capital base has increased. "The second half results will be good more than of the first half, and the following years," Mr Mmari said.
He added the Burundi unit is progressing well and expect to break even this year giving the happening of the political situation.
The CRDB acting Managing Director, Ms Esther Kitoka said the issue despite to be subscribed 70.5 per cent by shareholders compared to 80 per cent of pervious because of various options.
"The previous right issue happens when our shares were not listed but this time around shareholders have various option of accessing the shares," Ms Kitoka said "while those who did not buy were paid by underwriters."
The Orbit Securities Managing Director, Mr Juventus Simon, said the subscription rate was low to the previous one due to the fact that it went parallel with three primary offers.
"The right offer was conducted parallel with three IPOs namely Umande Unit Trust, Yetu Microfinance Bank and Mufindi Community Bank," Mr Simon told Daily News.
He said share prices are envisaged to stabilise for a while since the shareholders might like to hold following the entrance of underwriters.
The share exchanged hand at 400/-. The bank during the first half of this year CRDB posted a pre-tax profit of 92.5 bn/- which went up from 58.81 bn/- of same period last year.
The reason of raising capital follows the regulator decision to increase core capital and total capital adequacy ratio by 2.5 per cent each to 15bn/-. Others are expansion drive and embrace state-of-the-art IT.
