Credit Bank PLC has announced plans to list on the Nairobi Securities Exchange (NSE) by the end of 2023, aiming to raise at least Sh1 billion from the public.
This will be the first listing in the exchange’s main segment in about a decade following the self-listing of the NSE in July 2014.
It comes hot on the heels of the bank’s recent capital raise from the sale of a 20 percent stake to Mauritius-based private equity fund, Shorecap III.
The deal was consummated in April following approvals from the Competition Authority of Kenya (CAK) and the Central Bank of Kenya (CBK).
Securing the capital injection was crucial in laying the groundwork for going public given that it serves as a pointer of confidence from a strategic investor with regard to the growth prospects of the bank.
The family of the late politician Simeon Nyachae is the anchor shareholder at Credit Bank PLC, holding a 27.1 percent stake through the Sansora Group of Companies, a stable of four family-owned entities.
The company’s longest-serving director, Grace Nyachae, told the Business Daily that shareholders were not worried about the timing given the prevailing downturn at the exchange, which has depressed the valuations of listed banks.
“There is no perfect timing for anyone to go to market. Over the past eight years, the bank has increased its shareholder equity from Sh1.4 billion in 2015 to Sh4.0 billion. Going forward, we plan to raise an additional Sh1 billion from the listing,” Mrs Nyachae said.
During his debut visit to the NSE as president on October 11, 2022, President William Ruto pledged to have at least five State-owned entities go public within 12 months and challenged the private sector to match the same.
“I have said and made a commitment and asked the ministry concerned that between five and 10 public enterprises that are mature should be listed in the next 12 months. I expect that the private sector will work with the capital markets so that we can also have companies from the private sector listing at the exchange,” Dr Ruto said. In the full year ended December 2022, the Sh30.9 billion net assets tier three bank reported a Sh66.0 million loss before tax, according to data from the CBK. The bank’s loan book closed in December 2022 at Sh21.1 billion having grown from Sh17.8 billion as at the close of December 2021.
Unlike the previous expectation that the bank would go to market via a listing by introduction, Mrs Nyachae said that both the Capital Markets Authority and the CBK have granted the lender the green light for listing on the mains segment.
In listing by introduction, fresh capital is raised by the listing entity unlike going to the main market where new shares are issued.
“As part of the process, we are simultaneously creating an employee share ownership programme to give staff an opportunity to participate. We believe that listing on the Nairobi Securities Exchange will not only drive our growth and expansion plans,” Mrs Nyachae said.
Homeboyz Entertainment (NSE:HEL) was the last company to list at the NSE -- through introduction by floating 63.0 million shares in the Growth Enterprise Market Segment of the exchange in 2020.
Credit Bank PLC began operations in 1986 as a non-bank financial institution before securing a commercial banking licence in 1995.
Between 1995 and 2010, the lender served a niche market, mainly large businesses, before the strategy review in 2010, which positioned it as a retail-facing bank.
