Family Bank has urged its shareholders to purchase more shares in the ongoing rights issue to raise over Sh3 billion to power its expansion. The bank has been promoting the rights issue since it opened in October. The offer, going for Sh25, closes on November 28.
“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 CEO Peter Munyiri said.
The lender has been on an unprecedented growth momentum since conversion to a bank seven years ago. It 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 the Central Bank of Kenya requires banks to increase their capital ratios to 14.5 % by January 2015. Shareholders approved the ongoing rights issue a month ago through which it is offering one new share for every nine held.
“We are angling for a larger share of the lucrative SME and corporate lending markets. This cash call will open up more opportunities 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 is also expanding its agency banking, targeting 2,000 agents by yearend. It has more than 1,500 active agents. This year it has opened seven new branches among them 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.