In Kuwait's first electronic IPO on Nov 25, 50% of bank's shares will be on offer
KUWAIT: Warba Bank is raising its capital on Nov 25 through an initial public offering (IPO). On this occasion, the bank held a press conference yesterday to explain the goals of the offer and the bank's expectations from it.
"This will be the first electronic IPO held in Kuwait's history in cooperation with Kuwait Clearing Company. We have set up a special website for the IPO, where the number of shares will be mentioned. The offering is for up to 50 percent of the total shares, but interested buyer can demand more shares online," CEO of Warba Bank Shaheen Al-Ghanem said during the conference.
There will be two categories of buyers. "Those who will buy up to 16,500 shares will be able to pay through K-Net and will receive a message and an email confirming the completion of the buying process. In case of an interest to buy more than 16,500 shares, the system will print a document with the number of demanded shares and the directions to follow. These include going to his bank to transfer the payment for the demanded shares to Warba Bank's account. They will then receive another document of payment which they will take to KCC to complete the process," he added.
The record growth achieved by the bank over the last two years has prompted it to go for an amendment to increase capital. "We expect to complete the growth percentage, so we need to raise the capita in addition to supporting the bank's growth objectives. We expect growth mainly from our financial portfolio," stressed Ghanem.
"The Central Bank of Kuwait issued new regulations last week on consumer and housing loans that raised the limit from KD 15,000 to KD 25 000 for consumer loans, and maintained the housing loan at KD 70,000 - a total of KD 95 000, which brings more opportunities. We hope that Warba Bank will get a good share in this market. We expect that the mortgage law will be issued by 2019, which will give us good opportunity for growth. We also hope that the government will continue offering more projects in the oil sector. We closed some outstanding deals in financing oil projects, and we hope to continue in this field," he concluded.
Chief Financial Officer Khaled Hafez said that the bank was founded in 2010 - just after the economic crisis - with limited capital, "when the smallest bank at that time had double our capital". "The capital of any bank is related to the ability to compete in financing, and we succeeded to grow very well since 2010. Our assets grew by around KD 2 billion; last year we scored high growth and were ranked as the third-largest among Kuwaiti banks assets-wise and financing portfolio-wise," he pointed out.
"The upcoming capital raising amendment will support our competing ability to enter new sectors, finance more clients and boost our growth trajectory. In the third quarter of 2018, the rate of return on shareholders' equity crossed 6 percent in a very short period, which is a great achievement. Furthermore, we are working on having more positive reserves to be able to give dividends by 2019," explained Hafez. The price of the share issue is low to attract buyers. "The share issue price is 180 fils, while the average price is 230 fils, which should attract investors and encourage them to buy," he added.
By Nawara Fattahova