KIGALI - Bank of Kigali (BK) Limited yesterday launched its Initial Public Offering (IPO), floating 45 percent of its shares for the public to acquire a stake in one of the biggest banks in the country.
The lender is targeting to raise Rwf 37.5 b from the over 300 million shares as part of the government's broader strategy to divest from companies in which it owns shares, to facilitate the development of capital markets and increase alternative sources of long-term capital for business entities.
“The government is pleased to offer 133,467,400 ordinary shares of Bank of Kigali to the public.
The shares being offered by the government are in addition to the 166,837,000 newly created shares that will also be offered to the public, through the IPO,” the Minister of Finance, John Rwangombwa, said in the prospectus.
“This offer of shares by the government, is a continuation of the efforts and determination to develop the capital market within the overall framework under the Financial Sector Development Programme (FSDP) that was launched in 2007,” he explained.
In the IPO, East Africans are eligible to apply only for the 82,591,440 Offer Shares reserved under this sub-pool, employees and Directors are eligible to apply only for the 7,500,000 shares reserved under this sub-pool.
Rwandans who are incorporated or registered in Rwanda, are eligible to apply only for the 45,045,600 Offer Shares reserved under this sub-pool, while foreign investors who are not East Africans, employees and directors are eligible to apply for shares under the international pool.
The offer which opened yesterday will close on the July 29th this year.
The minimum application is 100 shares each at Rwf125. The announcement of the allotment results will be made on August 12, 2011.
“The last date of making payments of shares under international pool will be on August 19th. While shares will start trading on August 29th on the Rwanda Stock Exchange (RSE),” officials announced.
According BNR data, BK is the leading bank with 27 percent market share by assets, 31 percent net loans, 26 percent customer deposits, and 56 percent profitability as of 31 December2010.
In the financial year 2010, the bank posted Rwf6.1b net profit compared to Rwf5.2b realised in 2009. In the first quarter of 2011, the lender’s net profit increased from Rwf 849.9m in the first quarter of 2010 to Rwf1.9b.
Currently, the bank has 38 branches and service centres spread across the major commercial centres in the country. It intends to expand its branch footprint to over 60 branches and service centres in the next two years.
“BK has a five-year business plan and we plan to have 40 branches by the end of this year and 85 in our business plan in order to serve our clients,” BK’s CEO, James Gatera said. .
Latest statistics by the central bank indicate that the performance of commercial banks in the country improved significantly largely due to the state of economy which registered a growth of 10 percent in the first quarter of 2011 compared to the same period last year.