Nairobi, Kenya, September 26th 2014 – Family Bank shareholders have given the green light to raise more funds through a rights issue – the third cash call by the bank in five years.
The bank is looking at raising Ksh 3.5Billion to among others support its expansion agenda, enhance the ICT infrastructure and meet stringent CBK prudential guidelines. A set of new enhanced capital ratios are being introduced from 1st January 2015.
Shareholders have expressed great interest to take up their rights – a stamp of approval for the fast-growing bank.
The approval given during the bank’s extraordinary general meeting will see the lender double the issued shares by effecting a 2:1 share split expected to increase the liquidity of the stock and also make it more affordable.
“The upcoming cash call will help the bank advance the expansion agenda and also meet higher capital adequacy thresholds set by the Central Bank of Kenya in their prudential guidelines. It will also enhance our ICT infrastructure to support the expansive branch network of 78 currently serving nearly 1.5million customers. The latest split will see the par value of each share halve from Ksh 2 to Ksh 1 for every ordinary share”, said the bank’s Chairman – Mr. Wilfred Kiboro.
The cash call has been prompted by the unprecedented growth realized by the bank – growing faster than all the listed banks. It is a trend that continues this year – where the past 8 months has seen a growth of nearly 80% for the bank that was last year voted the best to work for.
At the same time, the bank has unveiled its line-up of transaction advisers for the rights issue.
“We are pleased to inform you that among the resolutions passed was the appointment of the transaction advisers to help us carry out this process. We confirm that Standard Investment Bank will be our lead transaction advisers; assisted by Alpha Africa Asset Managers who will be the investment advisors; Deloitte & Touche will be the reporting Accountants while Walker Kontos Advocates are the Legal advisers’’, added Mr. Kiboro.
The share split follows a 1:1 bonus share issue declared by the bank last year and a 5:2 share split four years ago in a move that preceded its maiden rights issue.
“We are encouraged by the strong support from our shareholders. They are ready to support the rights issue informed by the direction the bank is following. With our very ambitious targets on all key financial parameters, we considered the rights issue a faster and preferred option even as we mull over local corporate bond and long-term financing from international institutions” says Managing Director & CEO-Mr. Peter Munyiri.
The bank aims to become a top-tier lender by 2016 and sees the increased funding as key to supporting its growth targets. This year the bank has opened seven branches in Kajiado, Bomet, Laptrust, Kasarani, City Hall, Malindi and Ukunda – a move that has pushed its total branch network to 78.
It is also expanding its agency banking model, targeting a total of 2000 agents by end of the year. Currently the bank has more than 1500 active agents.
The bank is angling for a larger share of the lucrative SME, corporate lending market and the rights issue could open opportunity by increasing the single borrower limit to over Ksh 2.75Billion – enabling the bank to play in the big ticket business market.
“We remain confident of realizing premium returns to shareholders in future as we position our business to optimize on our universal banking model.
The focus on the retail mass market and SME sector will continue to give us a strong competitive position’’, added Mr. Munyiri.