MKOMBOZI COMMERCIAL BANK TO RAISE TSHS 5 BILLION THROUGH IPO

Dar es Salaam. Mkombozi Commercial Bank is planning to raise Sh5 billion through its initial public offering (IPO) early next month.

The bank’s aim is to increase its capital and finance expansion programmes.

The church-owned bank said in a prospectus emailed by Tanzania Securities Ltd last week that it wants to raise the funds to reach the regulatory target as set by the Bank of Tanzania (BoT) and use the surplus to boost its capital base.

“This will enable the bank to tap into new areas of business, open more branches to increase its outreach and, generally, expand its operations,” the statement said.

The IPO kicks off on November 3 and ends on November 29. It is expected to list on the Enterprise Growth Market (EGM) segment of the Dar es Salaam Stock Exchange (DSE) on December 22, 2014.

The six-year-old bank is offering 5,000,000 shares at a price of Sh1,000 each. The share offer will represent 22.9 per cent of the bank’s issued and fully paid-up ordinary share capital.

BoT requires all banks to raise their capital base to Sh15 billion by 2015. Mkombozi Bank has so far a core capital deficit of Sh1.2 billion, the statement said.

The bank, which started operations in 2009, recently raised Sh5.8 billion from the rights issue to boost its capital.

Mkombozi Bank, which has five branches, posted a Sh119 million profit after tax in 2013 and its accounts books for the first quarter of this year indicated a profit of Sh565 million.

The bank becomes the third company to list on the newly established EGM after Maendeleo Bank and Swala Oil and Gas.

Maendeleo Bank was fully subscribed while Swala was oversubscribed by 37 per cent.

DSE has a market capitalisation of Sh23 trillion and it has a target of raising it up to 50 per cent of Tanzania’s gross domestic product by 2017.