The presence of the Tanzania banking sector on the Dar es Salaam Stock Exchange (DSE) is expected to increase again next year as the second of the country’s largest commercial banks, CRDB, has recently approved a proposal to list at the DSE.
Members of the board of directors as well as 66 percent of the total shareholders recently met to discuss the decision and ultimately agreed to sell as many as 296 million of the bank’s shares, including 5 percent of the shares that are currently being held by the DANIDA Investment Fund.
Based on the agreement, shareholders have determined that more than 197.8 million of the rights issue shares should be reserved for sale to the founding shareholders and an additional 247.3 million bonus shares should be given to them as compensation for their loyalty to the bank.
The chairman of the board for CRDB bank, Mr. Martin Mmari, has said that he anticipates the plans to list on the stock exchange to gain momentum in January 2009 after the valuation of the bank’s shares has been completed by the stock market experts that the bank has been working with, namely Solomon Securities and Orbit Securities, the lead advising group and the lead broker respectively.
Mr. Mmari went on to say that he expects to officially list the bank’s shares at the DSE by June 2009, following an Initial Public Offering (IPO) in April.
In the coming year, CRDB is, therefore, expected to join the National Microfinance Bank (NMB), which successfully opened its shares earlier this year, at the DSE.
Bank executives are hopeful that the decision to list the shares of the CRDB will prove equally beneficial to the company.
According to the managing director of CRDB, Dr. Charles Kimei, the decision to list at the DSE will not only help to improve the overall management and transparency of the bank, but it will also provide tax incentives to the company.
“This is the culmination of shareholders’ demand for the past 12 years that I have been working with the bank,” said Dr. Kimei.
According to a November report by the Guardian Sunday, Dr. Kimei said that once the approval for the listing had been granted by the shareholders, the bank would begin the process of preparing the shares to be listed, which would take several months to complete.
In addition, Dr. Kimei said that CRDB had already met most of the required conditions set by the Capital Markets and Securities Authority (CMSA) to list on the DSE and the bank was currently in the process of developing a new legal framework on the matter.