ABC Bank facing New Year with optimism despite 2014 hiccups

NAIROBI: ABC Bank is aggressively aligning its operations with the financial market in a bid to shore up its margins and market share this year.

The bank released a Sh650 million private bond in May last year with a greenshoe option of Sh350 million to raise the total long-term lending portfolio and to support its growth strategies. The bond was oversubscribed by 57 per cent.

“The bond issue has enabled us to provide longer term credit to our small and medium enterprises (SME) clients. It will also boost the bank’s capital structure to enable us manage Central Bank’s capital adequacy ratio requirements in 2015,” said ABC Bank Group Managing Director Shamaz Savani. Looking ahead into the year, Mr Savani says they plan to raise more capital through various vehicles to support their expansion strategy.

New branches

“We plan to open two new branches in Nairobi to cater for our increasing number of customers. We will also continue to reinforce our Diaspora Banking strategy to reach new frontiers,’’ he noted.

Savani said ABC will continue investing in innovation, brand building, human capital development and pursuing more Public-Private Partnerships. “We are facing the new year with a strong desire to serving our customers even better, driven by our sound footing as reaffirmed by various organisations,” he added.

In November last year, Global Credit Rating Company affirmed the national scale long term rating assigned to ABC Bank of BBB (KE) and upgraded the national scale short term rating to A2 (KE) from previous rating A3 (KE). The ratings are valid until this October.

The new ratings are supported by the bank’s moderate business and financial risk profile, growth in business, efficiency in balance sheet, commencement of non-performing loans recovery, cost control and the successful private bond issue.

The favourable rating, Mr Savani observes, “assures investors of the fundamentals of the business, its actual strength, financial standing and management soundness.”

The bank also signed key partnerships with other institutions including the Kirinyaga-based Fortune Sacco and Postbank last year in an effort to strengthen its foothold in the market.