AfDB doubles stake in EA regional bank

The AfDB board approved the equity investment, which will see its stake in the regional bank increase from 6.67 per cent to 15 per cent.

The African Development Bank (AfDB) has more than doubled its ownership in East African Development Bank after making a $24 million (Shs60 billion) capital injection.

The AfDB board approved the equity investment, which will see its stake in the regional bank increase from 6.67 per cent to 15 per cent.

“This transaction will increase AfDB’s shareholding in EADB to 15 per cent,” EADB director-general Vivienne Yeda told the media.

Kenya, Uganda, Tanzanian and Rwanda are major shareholders of the bank. The development lender had loaned out Shs198 billion ($76.5 million) to businesses in Kenya, Tanzania, Uganda, and Rwanda at the end of 2011.
FMO Netherlands, DEG Germany, Consortium of Yugoslav Institutions, SBIC - Africa Holdings, Commercial Bank of Africa, Nordea Bank Sweden, Standard Chartered Bank (London), and Barclays Bank (London) also own stakes in EADB.

The bank said the additional money would boost the regional lender’s balance sheet and improve its credit worthiness.

“This confidence will also extend and provide leverage in our relationship with other multilateral development banks, development partners, and rating agencies,” said Ms Yeda.

Rating agency Fitch assigned AfDB a B, or stable, outlook in November, an improvement from B – following strengthening of the bank’s books.

Fitch said in 2011 impaired loans as a percentage of total lending stood at 10.7 per cent, less than half the 27.3 per cent ratio in 2010.

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