Credit Bank, led by Kenya’s Nyachae family, wins $35 million shareholder backing

Credit Bank Plc, the Nairobi-based lender owned by the family of the late Kenyan politician and businessman Simeon Nyachae, has secured shareholder approval to raise Ksh4.5 billion ($35 million) through a rights issue, a move aimed at shoring up its balance sheet and meeting tougher capital rules set by Kenya’s banking regulator. 

Shareholders at an extraordinary general meeting on Dec. 19 approved the issuance of up to 45 million new ordinary shares priced at Ksh100 ($0.77) each. The offer will be made through a private placement to existing shareholders and other qualified investors. 

Polling results showed near-unanimous support. About 19.7 million shares, representing 99.9 percent of votes cast, were in favor of authorizing the issue and allotment. The bank said proceeds would be used to strengthen its capital base.

Credit Bank plans private placement

The capital raise comes as Credit Bank works to comply with stepped-up minimum capital thresholds. Lenders must meet a core capital requirement of Ksh3 billion ($23.3 million) by Dec. 31, 2025, rising steadily to Ksh10 billion ($77.6 million) by the end of 2029. 

As of September, Credit Bank reported core capital of Ksh1.23 billion ($9.5 million), leaving a shortfall of Ksh1.77 billion ($13.7 million) against the first deadline. The board is now expected to finalize the terms of the private placement, including timing and allocation. 

ShoreCap, Sansora back capital, note

Ahead of the vote, two major shareholders, ShoreCap III LP and Sansora Group of Companies, committed Ksh1 billion ($7.7 million) each toward the capital plan, subject to regulatory approval. The bank said discussions are ongoing to complete the injections before year-end. 

Shareholders also approved the issuance of a Ksh194.7 million ($1.5 million) convertible note to ShoreCap III LP. The note carries a six percent interest rate, payable semiannually, and has minimum maturity of five years, allowing it to count as supplementary capital. ShoreCap may convert the note, in full or in part, into ordinary shares. 

Sansora, a firm linked to the late Cabinet minister Simeon Nyachae, has separately asked the Central Bank of Kenya to allow it to temporarily exceed the 25 percent shareholding limit for up to 36 months as the bank seeks new investors.

Nyachae legacy bank builds future

Founded in 1986, Credit Bank remains closely linked with the Nyachae family. Grace Nyachae, widow of Simeon Nyachae, sits on the board, and the family retains a significant stake in the bank. Credit Bank plans to acquire a property on Kiambere Road in Nairobi’s Upper Hill district, valued at $9.3 million, through an asset-for-shares swap involving 12 million shares.

The lender is one of more than 10 banks racing to meet the 2025 capital deadline. Peers such as ABC Bank Kenya and the Development Bank of Kenya are also weighing rights issues, with ABC already pursuing Ksh400 million ($3.1 million) from shareholders.