[2008-02-26]  Crane Bank IPO to Pave Way for Local Firms to List
THIS week began with news of Crane Bank's imminent listing in the last quarter of this year to be precise.

This was revealed by the Bank's MD A.R. Kalan who highlighted that plans were underway to realise this landmark event in Uganda.It is a landmark because Crane Bank will be the first indigenous institution in which a private individual has the largest stake, to go public.

It's no secret that the bank is owned by the Ruparelia family or at least, that they hold majority shares.

"We are already preparing the prospectus to submit to CMA and USE for vetting and approval," Mr Kalan said late last week without disclosing the expected volume of shares that could be listed.

The capital markets authority has in the past revealed that there was a need for indigenous institutions to go public in order to finance their growth and expansion plans as an alternative to debt but had however noted that the biggest impediment was that most of the companies were established and run by the now prominent families who would rather hold on to their interest than allow new entrants.

We have examples like the Madhvani Group, Spear Group, Mr James Mulwana's empire, Mukwano Group to mention but a few, as some of the successful family owned businesses.

An analysis of the bank's performance shows a pretty strong position in the market with significant milestones within the last 12 month period notably, a jump of 62.61 per cent in pre-tax profit to Shs25.1bn from Shs15.4b which translated into an after tax profit rise of 50.55 per cent to Shs18.8b from Shs12.4b.

There was also a substantial ascent in equity and reserves to Shs54.9b from Shs38.4b, an increase of 43.10 per cent. Customer deposits increased to Shs290b from Shs172.4b reflecting a 68.14 per cent augmentation. Customer advances increased to Shs144.2b from Shs118.4b, an increase of 21.71 per cent.

Over the years the bank has been entrenching itself in the market both in the upscale Kampala market and upcountry where it boasts of some five branches.

There has also been an increase in share capitalisation and has close to doubled its gains from foreign exchange transactions. The bank boasts of a strong asset base in excess of Shs360b and has also grown its liabilities particularly customer deposits thereby enforcing its position as a bank of choice in the Ugandan market.

The general overview is that Crane Bank is reflecting a perpetually strong brand characterised by an upsurge in customer deposits, foot print and generally a strong balance sheet position.

Mr Kalan said the bank aims to open four new branches countrywide in Arua, Kabale, Hoima and Mbarara districts.

He said high interest rates is a concern in the whole industry and affects both the lenders and the borrowers.This year, we are going to start a mortgage facility of up to 15 years and we feel that there is a vacuum in the housing industry yet the middle class [consumer] is growing," he added.

This information and more is valuable for any intending investor in the near future. The intending listing being in the third quarter will also give people the opportunity to closely monitor the bank's performance over the coming months and this will have the effect of stimulating investor confidence or otherwise depending on results posted.





Source: copyright@ AllAfrica