Family Bank has today received formal approval from the Capital Markets Authority to raise up to 8 billion shillings in tranches through a multi-currency Medium Term Note (MTN) by way of public offer to strengthen its capital base and support lending.
The Bank targets to raise 4 billion in its first tranche with the balance to be raised within the next five years in various tranches/series.
“We are positioning the Bank for the second phase of growth as per our 2020 – 2024 strategy anchored on growth and stability of the bank. Through this capital raising, the Bank is eyeing to strengthen its capital base to support lending to micro, small and medium-sized enterprises and heavily invest in technology infrastructure while diversifying our product and market offerings,” said Family Bank CEO Rebecca Mbithi.
Profit before tax over the past five financial years grew at compounded annual growth rates of 21.3% from 2016 to 2020. Interest Income continues to be the Bank’s primary revenue stream contributing on average 77% of total income, over the past five years.
There has also been an impressive increase in non-funded income, which has grown by a compounded annual growth rate of 4.9 percent over the past five financial years from 2.1 billion shillings in 2017 to 2.6 billion shillings in 2020.
The growth is mainly attributed to a significant increase in foreign exchange trading income and fees and commissions on loans and advances. On the balance sheet side, the Bank has recorded impressive growth in total assets at a compounded annual growth rate of 6.9%, customer deposit at 13.9%, shareholder funds at 1.3%, and loans and advances at 3.1% over the past five financial years during the period 2016 to 2020.
Ms. Mbithi also added, “We are confident of the Bank’s upward trajectory of growth not only backed on our financial strength, our footprint as Kenya’s fourth-largest bank in branch network but also the competence of the Board, Management and staff coupled with strong market offering necessary to scale the Bank’s growth’s ambitions.”
The lead transaction advisors are NCBA Investment Bank and Genghis Capital, PricewaterhouseCoopers (PwC)as the reporting accountants, MTC Trust and Corporate Services Limited as the Note Trustees, Mboya Wangong’u & Waiyaki Advocates as the legal advisors, and Tim-Sky Media Services as the Media and Public Relations consultants.
This issuance comes after the Bank successfully redeemed its five and a half years (5 and ½ year) Medium Term Note worth KES 2.0188 billion on 19th April 2021.