Family Bank shareholders have approved plans to raise more funds through a rights issue as the lender eyes opportunities beyond Kenya.
The lender is seeking to raise Sh4Billion – not only to ensure it stays way above the statutory enhanced capital ratios but also to fund its growth strategy. This will be the fifth cash call by the bank in six years. In 2014 the Bank raised Sh3.1 billion; Sh977 million in 2010 and by Sh1.1 billion raised in 2012
The cash call has been prompted by the unprecedented growth realized by the bank. The lender was feted last year for being the fastest growing Bank in Kenya.
“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. For now we consider the rights issue a faster and preferred option even as we mull over other financing options from international financiers,” said managing director & CEO Peter Munyiri.
The Bank is pursuing a multi-pronged capital raising strategy – a mix of debt and equity – as part of the lender’s five-year capital raising plan. Last year the Bank raised Sh2 billion through a corporate bond that is currently trading at the Nairobi Securities Exchange.
Last month the bank received Sh3.42 billion (30Million Euros) from European Investment Bank (EIB) to provide lower-cost long-term loans to small and medium sized businesses in Kenya. This is the second tranche by the European lender, with the first tranche of Sh2 billion having been secured two years ago. The funds, which are ready for disbursement, come several months after the lender secured a similar facility of Sh1 billion from a Netherlands Financier – Oiko Credit International.
The third tranche of Sh1.14 billion is expected in a months’ time. Coupled with the Sh2 billion disbursed two years ago and the latest funding of Sh3.42 billion, it will bring the total facility so far secured by Family Bank to Sh6.6 billion. The bank aims to become a top-tier lender and sees the increased funding as key to supporting its growth targets.
