Cooperative Bank shareholders have approved the board’s capital retention strategy as it seeks more funding to finance regional expansion.
On Friday, the owners endorsed a proposal that will see the bank retain Sh698.47 million of its total earnings last year (2013). Also, during the bank’s sixth Annual General Meeting (AGM) in Nairobi, they agreed to take home additional shares in the ratio of one ordinary share for every six ordinary shares held in a bid to preserve capital and create room for the growth of the bank’s business. They also approved a dividend payment of 50 cents per share.
Similar model
Under the arrangement a total 698,473,000 ordinary shares of Sh1 each in the capital of the bank will now be distributed to the shareholders through a bonus issue still subject to regulatory approvals. The bank, the country’s third largest bank by asset base is sniffing for investment opportunities in the region with key focus on the Ugandan, Ethiopian and Rwandan markets.
Chief Executive Gideon Muriuki said the bank requires additional capital for expansion but ruled out the possibility of Rights Issue.
Muriuki said following a successful entry in Southern Sudan through a joint venture with the cooperative movement of the country Coop Bank is keen replicating a similar model in other markets within the region.
“We are looking at Uganda, Ethiopia and Rwanda. We want to pursue discussions with the respective cooperative movements of these countries in order to replicate a similar model we have in Southern Sudan,” he said.
“We tried a joint venture model in South Sudan. We thought it is an excellent model to replicate in other markets.”
The bank’s profit before tax rose by nine per cent to Sh10.87 billion in 2013 from Sh9.98 billion in the previous year.
