M Oriental Bank Limited has called an Extra-Ordinary General Meeting (EGM) of its shareholders to approve a significant increase in its authorized share capital, marking a pivotal step in the bank’s expansion strategy. The meeting is scheduled for 3 October 2025 at Chyullu Hills, Apollo Centre in Nairobi.
The bank, formerly Oriental Commercial Bank, has proposed to raise its authorized share capital from KES 3.5 billion to KES 4.5 billion, a move that would allow the issuance of additional ordinary shares to strengthen its financial base. The proposal, outlined in a notice to shareholders, comes at a time when Kenyan banks are under pressure to meet stricter capital adequacy requirements and scale operations to serve a growing market.
According to the notice signed by Company Secretary Anne Otunga, the directors are seeking approval to increase the bank’s authorized share capital by creating an additional 50 million ordinary shares with a nominal value of KES 20 each. This will raise the total authorized share capital to KES 4.5 billion, divided into 225 million ordinary shares.
The directors have also requested shareholder approval to allot and issue up to 99.99 million new shares within the next five years. These shares may be issued at a price to be determined by the board, subject to compliance with Kenyan corporate laws and regulatory requirements.
The resolutions proposed draw on provisions of the Companies Act, 2015 and the bank’s Articles of Association. Notably, the board has sought to waive pre-emption rights of shareholders under Section 338 of the Act. This would enable the directors to issue new shares without first offering them to existing shareholders, a common step taken by firms looking to raise capital quickly.
“The directors be and are hereby authorized to allot and issue such ordinary shares, subject always to compliance with all applicable laws and regulatory requirements,” the notice states.
The board emphasized that any issuance would be carried out transparently, with all necessary filings made with the Registrar of Companies and other regulators.
M Oriental Bank has been steadily building its presence in Kenya’s competitive banking sector. The proposed capital injection would provide the bank with additional flexibility to expand lending, invest in technology, and strengthen its balance sheet against economic shocks.
For shareholders, the allotment of nearly 100 million new shares could result in some dilution of ownership, depending on the terms set by the board. However, the move also presents opportunities for investors to participate in the bank’s next growth phase.
By waiving pre-emption rights, the directors gain the flexibility to bring in new investors, potentially broadening the shareholder base. Kenya’s banking industry has faced multiple headwinds, including tighter regulations, rising non-performing loans, and increased competition from digital lenders. Banks have responded by seeking stronger capital buffers and exploring new growth opportunities.
M Oriental Bank’s planned capital increase mirrors similar moves by other mid-sized lenders aiming to stay competitive. With a stronger balance sheet, the bank could expand its loan portfolio, invest in digital transformation, and tap into underbanked segments of the Kenyan economy.
The EGM will allow shareholders to vote on the resolutions. If approved, the directors will have the mandate to proceed with the issuance and allotment of shares over the next five years. Shareholders or proxies wishing to attend must register at the bank’s head office on Koinange Street, Nairobi, at least 48 hours before the meeting.
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