Prudent to Raise N1.2bn Via Rights Issue
Banking
By Amarachukwu Ona
In a bid to consolidate on the remarkable increase in its performance indices in the last three operating years as well as reposition for accelerated growth, Prudent Bank Plc is set to raise N1.2 billion additional capital from its shareholders.
The move, which will place the Prudent Bank among the most capitalised banks in the country has already received the blessing of its shareholders at an extra ordinary General meeting held recently.
At the meeting, shareholders overwhelmingly approved an increase in the bank's authorized share capital to N3 billion from the current level of N2 billion, by the creation of additional two billion ordinary shares of 50 kobo each ranking at par in all respect with the existing shares of the bank.
Furthermore, shareholders approved the right issue of 914,362,200 ordinary shares of 50 kobo at a proportion of three new shares, at a price to be cleared with the Securities and Exchange Commission (SEC).
The overwhelming decision of the bank's shareholders to increase its capital base, THISDAY gathered, was the need to sustain the remarkable growth experienced in the last three operating years as well as enhance the growth potentials of the bank.
Between 2000 when it was converted to a commercial bank and 2003, the bank recorded a 302.9 percent growth in its balance sheet size which rose to N20.934 billion as at March 31, 2003, from N669.439 million. During this period, gross earnings grew from N71.28 million to N4.333 billion, representing 600 percent increase while profit after tax shot up by 470 percent to N576.004 million from N12.520 million. This remarkable performance, in an industry marked with intense competition, and at a period of turbulence, was spurred by increased public confidence in the service delivery of Prudent Bank.
This is reflected in the phenomenal increase in its deposit base, which shot up to N16.108 billion in 2003, from just N106.836 million in 2000.
The steady growth and improved performance recorded during this period enhanced shareholders' confidence hence, an increase in shareholders funds from N535.212 million in 2000 to N2.343 billion.
Already, there are indications of further increase in the bank's performance indices for the year ended March 31, 2004.
For individual shareholders, the right issued represents an opportunity to increase future dividend income from Prudent Bank. For example, from N152.394 m in 2002, dividend paid to shareholders increased by 100 percent to N304.788 m in 2003. This trend is expected to continue even as the bank records improved performance.
However, this sterling performance, according to the Chairman of prudent Bank Mrs. M. O. Onasanya, is the beginning of giant strides and growth in all its performance indices. Addressing shareholders at the bank's last annual general meeting, she stated, "we are not resting on our oars, recognizing that the journey has just begun. We will continue to develop our corporate entity; our strong brand name will be sustained. We will continue to pursue realignment of our organizational structure to engender effectiveness and efficiency".
|
