Family Bank has urged its shareholders to purchase more shares in the ongoing rights issue, to raise over Sh3 billion to power its expansion. Each share in the rights issue that opened on October 14 , 2013 and closes on November 28, 2014, is going for Sh25.
“The bank is on the right course as we confront a rapidly changing industry guided by our universal banking strategy with the ultimate goal being to play in the top tier space by 2017,” Family Bank chief executive Peter Munyiri said.
The lender has been on an unprecedented growth momentum since conversion to a bank seven years ago. The bank has more than doubled its footprint to 78 branches from 34. Family Bank is assured of raising at least Sh2.5 billion given that the lender’s anchor shareholders own a total 83.15 per cent stake.
“The majority shareholders have indicated they will fully take up their rights,” said Wilfred Kiboro, the bank’s chairman.
The bank is seeking to raise Sh3.1 billion in new capital to fund its expansion, enhance ICT infrastructure and meet new prudential guidelines on capital under which Central Bank of Kenya requires banks to increase their capital ratios to 14.5 percent by January 2015. The shareholders approved the ongoing rights issue a month ago through which it is offering one new share for every nine held by its existing owners.
“We are angling for a larger share of the lucrative (small and medium enterprises) and corporate lending markets. This cash call will certainly open up more opportunities for the bank by increasing our single borrower limit to over Sh2.75 billion, thus enabling the bank to play in the big ticket business market,’’ noted Mr Munyiri.
The bank aims to become a top-tier lender by 2016 and sees the increased funding as key to supporting its growth targets. 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 1,500 active agents. This year it has opened seven new branches in Kajiado, Bomet, Laptrust, Kasarani, City Hall, Malindi and Ukunda, a move that has pushed its total branch network to 78 with two additional branches set to open before close of the year.
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