Industrial and Commercial Development Corporation (ICDC) has completed the purchase of Development Bank-owned Finance House building at Sh1.2 billion.
The State-owned long-term financier added it would subsequently sell the prime property on Nairobi’s Loita Street to a willing buyer and channel the proceeds to financing industrial, commercial and other entrepreneurial undertakings in the economy.
Industrial and Commercial Development Corporation (ICDC) has completed the purchase of Development Bank-owned Finance House building at Sh1.2 billion.
The State-owned long-term financier added it would subsequently sell the prime property on Nairobi’s Loita Street to a willing buyer and channel the proceeds to financing industrial, commercial and other entrepreneurial undertakings in the economy.
“The conclusion of the payment was between January and April this year…the building had some encumbrances from some old insurance companies, so we were tracking that to make sure that the title is free of encumbrance. That has since been addressed,” ICDC executive director William Haggai told Business Daily.
Mr William revealed all the sales proceeds had been disbursed to the State-owned Development Bank of Kenya (DBK), which has been battling liquidity pressures.
ICDC held an 89.32 percent stake in Development Bank as at 30 June 2017.
“When we got approval to purchase the building, we also got an approval to dispose of the building because we are not in the business of owning real estate. Once we have the property transferred to us we will try as much as possible get someone to take it off our hands then we make the money available for industry,” he said.
Development Bank closed the sale of the building in the beginning of 2019 in efforts to shore up its capital.
With the bank’s perennial negative liquidity position, it means that the troubled lender has been highly constrained in terms of issuing new loans, despite this being its main source of income.
Latest available data, which is for 2017, shows that the ICDC pre-tax profit was nearly just a third (Sh497 million) of what it was in 2015 (Sh1.52 billion).
Return on assets shrank to two per cent in 2017 compared to six percent in 2015.
As at 2017, ICDC’s total assets stood at Sh22.5 billion up from Sh22.3 billion in 2016.
Out of this, property and equipment stood at Sh1 billion while investment in property was worth Sh967.1 million.
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