OFFER

Family Bank receives CMA's nod to float Sh8 billion bond

It is Kenya’s fourth-largest bank in branch network after Equity, KCB and Cooperative Bank

In Summary
  • Its gross earnings have grown at compounded annual growth rates of 21.3 percent from 2016 to 2020.
  • This issuance comes after the bank successfully redeemed its five and a half years (5 and ½ year) Medium Term Note worth Sh2.0188 billion on April 19. 
Family Bank CEO Rebecca Mbithi speaking at the investor forum
Family Bank CEO Rebecca Mbithi speaking at the investor forum
Image: HANDOUT

Family Bank has received formal approval from the Capital Markets Authority to raise up to Sh8 billion to strengthen its capital base and support lending.

The bond will be in tranches through a multi-currency Medium Term Note (MTN).

The Bank targets to raise Sh4 billion in its first tranche with the balance to be raised within the next five years in various tranches.

Family Bank CEO Rebbeca Mbithi said they are  positioning the lender for the second phase of growth as per  2020 – 2024 strategy anchored on growth and stability.

''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,”  Mbithi said.

This issuance comes after the bank successfully redeemed its five and a half years (5 and ½ year) Medium Term Note worth Sh2.0188 billion on April 19. 

The lead transaction advisors for the bond are NCBA Investment Bank and Genghis Capital, PricewaterhouseCoopers (PwC) as the reporting accountants.

MTC Trust and Corporate Services Limited are the Note Trustees, Mboya Wangong’u & Waiyaki Advocates as the legal advisors and Tim-Sky Media Services as the Media and Public Relations consultants.

The bond will be advertised for 1o days. 

Family Bank has been on a growth trajectory in recent time, rising from losses to report growth in gross and net earnings over the past five financial years.

Its gross earnings have grown at compounded annual growth rates of 21.3 per cent from 2016 to 2020.

Interest income continues to be the Bank’s primary revenue stream contributing on average 77 per cent 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 per cent over the past five financial years from Sh2.1 billion in 2017 to Sh2.6 billion 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 lender has recorded impressive growth in total assets at a compounded annual growth rate of 6.9 per cent, customer deposit at 13.9 per cent, shareholder funds at 1.3 per cent and loans and advances at 3.1 per cent over the past five financial years during the period 2016 to 2020.

 “We are confident of the bank’s upward trajectory of growth not only backed on our financial strength,  footprint as Kenya’s fourth-largest bank in branch network but also the competence of the board, management and staff,'' Mbithi said.