This archive report was first published on 10 August 2020.
Regional lender NCBA Bank has recapitalised to the tune of Ksh748.87 million ($7.48 million) after shareholders approved a resolution for bonus shares rather than cash dividends to bolster the bank's business amid the Covid-19 pandemic.
Published on August 10, 2020, the recapitalisation is part of the bank's efforts to increase its nominal share capital and make room for further capital injection through issuance of bonus shares to shareholders.
At the bank's virtual annual general meeting held on July 24, the shareholders also approved a resolution by the directors to create an additional 606.19 million ordinary shares of Ksh5 ($0.05) each over a period of five years (July 2020 - July 2025).
NCBA managing director John Gachora told The EastAfrican that the creation of additional shares would enable the board to act quickly and address the bank's capital requirements without waiting for shareholder approval during the AGM.
"It makes it easier should the board need to issue bonus shares or react like we did for this time with Covid-19, where we submitted a previously announced cash bonus dividend for bonus shares. In future, we are avoiding waiting until an AGM before we can distribute such an offer," said Mr Gachora last week, ruling out the possibility of future cash calls (rights issues).
