Kampala — Shareholders of Stanbic Bank Uganda are set to get additional shares from the firm in its effort to widen its capital base. Mr Philip Odera, the bank's managing director told Daily Monitor in interview that the bank will offer bonus shares to investors to increase its paid up capital from about Shs5 billion to Shs25 billion as required by the central bank.
Stanbic, which is Uganda's largest bank by assets, is owned by at least 25,000 institutional and retail shareholders. Each shareholder is set to receive an extra share per piece at almost no cost, save for a 10 per cent withholding tax.
Shareholder approval
"If the shareholders agree to the issuance of additional shares, that will allow us to increase our paid up capital," Mr Odera said in an interview over the weekend. The bank will seek the approval of the shareholders, at its Annual General Meeting due on Tuesday. However, Mr Odera sounded very confident that the shareholders would approve the bonus issuance in order to help the bank move forward in line with Uganda's new financial regulations.
The innovation will come in the wake of new financial regulations that were issued by Bank of Uganda last year. The rules require commercial banks to increase their paid up or minimum capital requirements from Shs4 billion to Shs25 billion by March 1, 2013.
New BoU regulation
The adjustment is meant to secure Uganda's financial industry from future domestic and external financial shocks, according to Mr Emmanuel Tumusiime Mutebile the Governor Bank of Uganda. A minimum capital requirement provides a basis for a bank to ensure sound management and act as a buffer to protect depositors and creditors.
Stanbic becomes the second institution to take advantage of its listed status to increase its capital base without
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