Family Bank Limited CEO Rebecca Mbithi plans to expand the bank’s presence to 47 more counties, while eyeing tier-1 status. It will achieve this by using the proceeds of a corporate bond that it traded on the Nairobi Securities Exchange (NSE) on June 30, Business Daily reported.
Mbithi is the bank’s managing director and CEO. She was appointed in February 2019.
In a statement on the NSE, Mbithi said: “We target to be in every county though we recognize that it’s not a determinant to being a tier-1 or II bank.”
The move came in June after the bank raised Ksh 4.42 billion ($39 million) against a Ksh 3-billion ($27.8 million) target in its issued bond, with a 5.5-year maturity tenure.
The 147.3-percent oversubscription was raised by local fund managers, banks, retail investors, insurance companies and other institutional investors.
According to Mbithi, the capital raised will be used to support the bank’s digitization, which will help grow and scale out customer numbers, strengthen the balance sheet to increase lending to small- and medium-sized enterprises and finance its entry into regional markets.
Family Bank will use the funds to increase its branch network from the 92 existing outlets in 37 counties.
It also plans to expand its presence and consumer base as it considers public placement. This is because the Capital Market Authority of Kenya has allowed the bank to take from investors the Ksh3 billion ($27.8 million) approved for the first bond tranche and an extra Ksh1 billion ($9.3 million) offered by the same pool of investors as a greenshoe option.*
Family Bank is a tier-II capital, or medium-sized, commercial bank in Kenya founded in 1984. It became a commercial bank in 2007 following the issuance of a banking license by the Central Bank of Kenya.
As of 2017, its total assets were valued at KSh 69.12 billion ($696 million at the time).
*A greenshoe option allows a group of investment banks that underwrite an initial public offering (IPO) to buy and offer for sale 15-percent more shares at the same offering price than the issuing company originally planned to sell.