NIC discloses Ndegwa siblings’ Sh2.2bn direct stake in the bank

Its good to see that banks have complied with CBK directive to list its owners in detail.

http://www.businessdailyafrica.com/image/view/-/3378678/medRes/1434285/-/maxw/600/-/2ipjo/-/james.jpg
NIC Bank chairman James Ndegwa. PHOTO | COURTESY

By VICTOR JUMA

Posted Monday, September 12 2016 at 19:07
IN SUMMARY
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[li]The family’s patriarch, the late Philip Ndegwa, first bought into NIC in the 1990s through First Chartered when he acquired a 20 per cent stake from Barclays Bank of Kenya which was selling its majority interest in the lender.[/li][/ul]
NIC Bank chairman James Ndegwa and his brother Andrew Ndegwa directly hold 6.5 per cent shares of the lender each, a filing by the group has revealed. The ownership disclosures, which values their direct stakes at about Sh1.1 billion each, are contained in a circular to shareholders of the Nairobi Securities Exchange-listed firm. The circular gives finer ownership details of the bank as opposed to the previous consolidation of the Ndegwa family’s stake at 25 per cent, comprising holdings by investment vehicles First Chartered Securities Ltd and ICEA Asset Management Ltd. Mr James Ndegwa owns 42 million shares in NIC currently valued at Sh1.1 billion based on the bank’s Friday closing price of Sh27.7. His ownership is higher than Mr Andrew Ndegwa’s stake by 10,795 shares. Both siblings sit on the board of the bank. The Ndegwa family is one of Kenya’s most wealthy, holding stakes in other companies through various investment vehicles. The listing of their direct stakes in NIC Bank could indicate that the distribution of the multi-billion-shilling family fortune could have started. Mr James Ndegwa is the chairman of First Chartered while Andrew Ndegwa is its executive director. Besides NIC, the Ndegwas also have interests in insurance, agriculture, manufacturing and real estate development and management.

The family’s patriarch, the late Philip Ndegwa, first bought into NIC in the 1990s through First Chartered when he acquired a 20 per cent stake from Barclays Bank of Kenya which was selling its majority interest in the lender. Through a series of rights issues and acquisitions, the family’s interest has grown to 25 per cent in what is now a diversified Kenyan banking multinational with a presence in stock brokerage and insurance agency. NIC says the planned restructuring into a diversified group owned by a non-operating holding company will make the firm more nimble in terms of further expansion and management of existing operations.

“The reorganisation will support the group’s medium and long term strategy through a structure that facilitates optimal use of capital, better strategic management, more effective risk management, and improved governance of the subsidiaries,” the bank said in the circular.

NIC plans to transform into a non-operating holding company, overcoming the restrictions placed on lenders under the Banking Act. Once the restructuring is complete, the company will change its name to NIC Group Plc that will own all the operating subsidiaries. Kenyan banks are barred from lending to entities in which their shareholding exceeds 25 per cent, but the holding companies are allowed to source for funding for their subsidiaries. Banks are also limited to lending a maximum of 20 per cent of their core capital to associate companies.

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