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MUCOBA BANK PLC IPO

MUCOBA BANK PLC IPO
COMPANY & BUSINESS
 

Sector Bank
Proposed Exchange Main Investment Market –The Dar es Salaam Stock
Exchange (Tanzania)
Shares in Issue 20,000,000.00
IPO Price per share TZS 250
Offer Opening Date 27-July-2015
Offer Closing Date 4-September-2015
Expected Listing Date 5th October 2015

MUCOBA Bank PLC (was established in December 1998 under Companies Ordinance (Cap 212) (currently, the Companies Act, Cap 212 [R.E. 2002]) with Registration No. 35471. MUCOBA Bank PLC was given a license by the bank of Tanzania (BOT) to conduct banking operations as a first Community Bank in Tanzania in May 1999 with license no. MFI A 00001. MUCOBA Bank PLC started operations to the public in June 1999. By resolution dated 17th July, 2004, the company resolved to convert from a private limited liability company to a public limited liability company and also resolved to change its name from Mufindi Community Bank to MUCOBA Bank PLC with certificate of change of name number 35471 dated 29th May 2014. 

The bank as part of its ongoing capital restructuring programme wishes to sell to the Tanzanian general public 20,000,000 ordinary shares of MUCOBA Bank PLC, representing 54.70 % of the issued and fully paid up ordinary share capital of the Company after the offer, at a price of TZS 250 per share by way of Initial Public Offer (IPO) and listing on the Main Market Investment Segment of the DSE. 

Board of Directors

NAME POSITION QUALIFICATION
Atillio Mohele Chairman BA (HONS) Economics UD, Post Graduate
Diploma (Management), MA (Economics)
Ernest C.Usangira Vice Chairman Bsc (Education),
Golden Sanga Director Certificate in Agricultural Economics, Certificate
for Grade III A
Marcellina Mkini Director Diploma (Agricultural Nutrition),
Ben Mahenge General Manager Postgraduate Diploma ( Accounts) Advanced
Diploma (Accounts)

Economic outlook
Overall macroeconomic performance continues to be fairly strong, with Gross Domestic Product (GDP) growing to 7.2% in 2014 [7.0%: 2013]. GDP is estimated to remain on its current growth trajectory into the near future, with the rate of growth averaging around 7% per year. The expected positive outlook is based on the ongoing investment due to discovery of natural gas reserve and the ongoing construction of gas pipeline from Mtwara to Dar es Salaam which is expected to promote other business opportunities and general infrastructure development particularly roads, railways and related investments in power generation in the country which will further boost the domestic production. Other main drivers of GDP growth are the telecommunications, transport, financial intermediation, manufacturing, construction and retail trade sectors.

The Bank projects substantial growth prospects and sustainable macroeconomic stability. A stable growing economy creates steady platform for the banking industry to prosper and MUCOBA Bank is poised to seize opportunities. The Bank will continue implementing its business strategy with due consideration of emerging opportunities and focusing mainly in consolidation of products, systems and platforms such as
internet and mobile banking, ATMs and Point of Sale (POS) terminals to ensure quality service. Additionally to address high cost of funds, the Bank will aggressively focus on the untapped market through Service Centers.

Financials
Since its establishment, the Bank has been performing well and the table below depicts the previous three year’s (I.e. 2012, 2013 & 2014) financial status. In the fiscal year 2014, the bank had a capital of Tsh 828 million as compared to the 721million of the year 2013.The bank expects to have a share capital of5 billion by way of IPO at the end of September 2015. In 2014 the operating expenses increased to Tsh 2.6 billion, a 22.485%. Although there is an increase of expenses for the year 2014 but the profit increased from 292 million to 565 million an increase of 93.15% of profit before tax for the year 2014. Also the total assets decreased from 15 billion to 14 billion in 2014 due to establishment of agent centers in different districts of Iringa Region.

TZS 000's 2014 2013 2012
Net Interest Income 2,304,245 2,144,054 1,573,364
Operating Expenses 2,623,323 2,136,783 1,621,678
Profit before tax 565,722 292,885 240,168
Share Capital 828,038 721,483 593,540
Total Assets 14,566,838 15,030,461 10,997,527
Total Liabilities 12,713,053 13,308,599 9,573,891

Dividend Policy
Declaration of dividend depends on the state of the bank’s financial position. It is subject to Director’s recommendation and approval by the Annual General Meeting. Prospective investors should note that under the Banking Act, approval of Bank of Tanzania is required before the bank declares any dividends. Subject to the approvals, the bank will pay not less than 40% of its profits available for distribution after making due reserves as directed by BOT. Dividends payable will be subject to 5% withholding tax.