BK-bank shares up for grabs

By: Randa Rugangazi

Yesterday, Bank of Kigali officially launched its initial public offering (IPO) of 300,304,000 shares at the price of RWF 125 per share. The bank is looking to raise RWF 37.5 billion from the IPO.

Bank of Kigali (BK) first declared its intentions for an initial public offering (IPO) December of last year. The government and the bank were going to publicly offer a total of 45 percent of the bank’s shares.

It was announced on 27 June that 300,304,000 shares would be up for grabs to the Rwandan public starting Thursday, 30 June.

The IPO will then close on 29 July and BK bank will be listed on the Rwanda Stock Exchange on 29 August.

During the IPO period, brokers will be taking orders from interested invested for shares.

The shares will then be distributed out to all investors. Different types of investors have a quota of reserved shares.

East African investors have access to 82,591,440 shares. Rwandan incorporated businesses have access to 45,045,600.

The bank’s chief operating office, Lawson Naibo told Igihe.com, “The funds raised will grow the bank’s lending portfolio and expand projects around the country.”

There is optimism for the bank’s shares to be oversubscribed by investors. This follows the successful Bralirwa IPO issued end of last year. Bralirwa’s stock price shot up by more than 50 percent.

The stock’s strong performance was later supported by Bralirwa’s net income growing by 62.8 percent. Net income is the balance of business after the reduction of expense costs.

A company listed on the stock exchange has to regularly release its annual earnings to the public.

Another contributing factor to the high optimism is BK’s strong asset base forecast to grow at 35 percent within the next five years.

This growth forecast is based on a solid business plan in which the bank plans to focus on loans to small and medium sized enterprises.

According to the Ministry of Finance, privatization efforts will boost stock market activity with increased options for investors.

The efforts will also support the country’s economic growth, attract investors, and increase national savings.

“Instead of depending on the government, as a shareholder, for capital to finance upcoming projects”, explained Mr. Naibo.

The Rwanda Stock Exchange provides the bank with access to a new financing platform.