BIB increases its Capital to 700 million Birr
Addis Ababa, Ethiopia – Berhan International Bank (BIB) has increased its authorised capital by 133pc to 700 million Br in an attempt to meet the 500 million Br minimum capital the central bank has required all banks to attain by 2016.
BIB is one of the nine banks that were operational when the central bank issued the directive in September 2011. These banks were given a window period to meet the directive without stopping their operation, while banks that were still under formation or any that wanted to enter the industry had to reach the new limit.
The Bank has now a paid up capital of 180 million Br and subscribed capital of 228.1 million Br.
The decision to beef up the registered capital was made at extraordinary meeting of shareholders held on May 14, 2012, at the Global Hotel. The bank had to amend its memorandum and article of association for that.
Ã¢â‚¬Å“We will certainly have a paid up capital equivalent to the authorised amount within three to four years time,Ã¢â‚¬Â Daniel Kitaw, chairman of the board of the bank, said.
It was decided at the meeting that existing shareholders can buy extra shares within three months, before the sale become open to the public.
The subscription will be free of premium payment for the existing shareholders. The general assembly delegated the board of directors to settle on the amount of premium expected to be paid by new subscribers.
The bank will need as much as 320 million Br to meet NBEÃ¢â‚¬â„¢s threshold requirement.Ã‚Â
Berhan was recently contacted by the promoters of Hawassa Bank, who wished to merge with it by transferring the 20 million Br they had collected from the sale of shares. HawassaÃ¢â‚¬â„¢s founders had given up on their plan to establish the bank when the central bank raised the paid up capital from 75 million to 500 million. Having had no ground for merger, because Hawassa was still under formation, the promoters asked the central bank permission to transfer the money in their account to BIB; that, however, required an assembly of the shareholders to decide on the fate of their money. Both the promoters and the board of BIB are eager for the union and trying to work towards it.
Ã¢â‚¬Å“We both are positive in working together. We are currently discussing the process,Ã¢â‚¬Â Daniel said.Ã‚Â Ã‚Â Ã‚Â
Berhanu Shefnie, member of board of directors of Berhan, also believes that raising BIBÃ¢â‚¬â„¢s authorised capital will smooth the process of transferring the shareholders of Hawassa to his bank.
Source: Addis Fortune