Capitec plans to issue $110m in new shares

Monday, 31 October 2011 08:26

Written by South Africa News mg

Retail lender Capitec Bank said it aims to raise up to $110-million by issuing new shares to fund its expansion and boost capital ahead of new global banking requirements.

Capitec, a small but fast-growing retail bank, has been chipping away at the market share of South Africa's "big four" banks by offering lower fees and keeping its branches open later.

The bank said in a statement it will issue up to 4.6-million new shares, representing nearly 5% of its current stock in issue. Shares of the bank tumbled more than 4% on the news.

The bank expects to raise as much as R850-million through the issuance, said finance director Andre du Plessis, adding that the extra capital could help with stricter global banking requirements.

"We don't know what the rules are. All banks are waiting for the outcome. When the rules are finalised everyone will have to go the market to raise money," Du Plessis said in a telephone interview.

"We don't want to be in the washing machine with all the others."

South African banks are relatively well capitalised, but the Reserve Bank expects they will struggle to meet some of the new global benchmarks under discussion, such as requirements on short-term liquid assets.

Branching out
Absa, the South African bank majority-owned by Barclays, has said it will need $43-million this year to boost its liquidity buffer, after spending a similar amount in the previous year.

Capitec said some of the proceeds would go into increasing its presence across South Africa. The bank plans to have a total of 510 branches by the end of the year, from 490 now.

CONTINUES BELOW

Click here

Capitec's target is to open 50 new branches annually at the cost of about R1.2-million each, Du Plessis said.

"On a profit basis, we normally break even within six months of opening a branch," he said from the bank's Stellenbosch offices.

Bank of America's Merrill Lynch unit is acting as sole lead manager and bookrunner for the placing.

Capitec said in January it had raised about R1.05-billion in a cash call that had represented 10% of the company's issued shares.

Capitec's shares have gained nearly 9% year-to-date. They were down 4.2% at R182 at 11.21am GMT.

Johannesburg's broad All-Share index was down 1.3%. -- Reuters

Add a comment

Upper West Rural Banks commended for contributing to development

Monday, 31 October 2011 08:12

Written by Business in Ghana

Nandom (U/W), Oct. 31, GNA – The four Rural Banks in the Upper West Region, namely the Nandom Rural Bank, Sonzele Rural Bank, Sissala Rural Bank and the Lawra Rural Bank have been commended for their great contribution towards the development of the Region.

Alhaji Issahaku Saliah, Upper West Regional Minister gave the commendation during the 2011 Rural Banking Week celebration at Nandom in the newly created Nandom District.

It was on the theme: “One Body, Many Parts, sharing Resources Together”.

He said it was wonderful to note that the Banks had within a short period mobilized a total of GH¢ 9.9 million and granted about GH¢ 3.00 million as loans and advances to people to either start or develop their businesses.

The Regional Minister was impressed by the performance of the banks, especially in financing agricultural production, small scale industries, provision of houses, payment of school fees and health bills.

He said many small scale entrepreneurs would not have been able to go through the rigorous demands of the commercial banks to access loans to start or develop their businesses.

Alhaji Saliah said Government would continue to create the necessary socio-economic environment to enable Rural Banks to offer the much needed services to the people.

He, therefore, admonished the Management of these Rural Banks to focus the 2011 Rural Banking Week celebrations on removing the bottlenecks that were hampering their operations in order to reposition themselves to become more effective to deliver better services to the people.

Mr. Charles K. Gyang, President of the North-Western Chapter of the Association of Rural Banks – Ghana, appealed to the Minister to support the opening of Rural Banks in districts without Rural Banks as that was one of the major ways of helping the people.

He also urged Directors of Rural Banks to be conscious about image building since it was one of the fundamental ways they could succeed.

Mr. Gyang also admonished all staff to base their conduct on two main things - integrity and delivering of quality services.

Mr. Peter K. Latuo, Chairman of the Board of Directors of the Nandom Rural Bank said the celebration of the day presented them with an opportunity to share ideas and work together as one body committed to achieving the same set targets and goals.