- The tier-II bank said it would use the funds to increase its branch network from the current 92 outlets in 37 counties.
Family Bank plans to expand its presence to all 47 counties as it gears up for tier-1 status in the next three years, with the drive being funded by the proceeds of its corporate bond that started trading on the Nairobi Securities Exchange (NSE) on Wednesday.
The tier-II bank said it would use the funds to increase its branch network from the current 92 outlets in 37 counties, widening its presence and customer base as it also considers an initial public offering proposal.
“We target to be in every county though we recognise that it’s not a determinant to be a tier-1 or II bank,” said Family Bank chief executive Rebecca Mbithi during the bell ringing ceremony for the bond at the NSE #ticker:NSE on Wednesday.
The lender raised Sh4.42 billion against a Sh3 billion target in the bond issuance that has a maturity of 5.5 years. It has also been given the green light to raise an additional Sh1 billion as a greenshoe option in the offer that is the first tranche of a Sh8 billion medium-term note.
“The capital raised will to support the digitisation of the bank’s operation to grow and scale out customer numbers, strengthening balance sheet to increase lending to SMEs and finance its regional market entry,” said Ms Mbithi.
The lender’s chairman Wilfred Kiboro said the success of the bond would help in the efforts to become a top tier lender by strengthening the balance sheet and capital ratios.
“We are very happy that investors had the confidence to come and invest with Family Bank, and it shows the economy is picking up. The purpose of this to help with our balance sheet and capital ratios and grow as a bank. Our intention is to become a tier-1 bank within our plan to 2024,” he said.
The bank had in 2015 floated another bond — which has matured and been redeemed — that allowed it to expand from 30 counties to the current 37 and grow from 1.6 million customers at the time to more than 2.4 million today.
The issuance came after the bank posted a 71.2 percent growth in net earnings to Sh510.17 million in the three months to March.