The first tranche of the Family Bank Ksh10 billion corporate bond begun trading on the Nairobi Securities Exchange yesterday after a successful listing that will see the lender’s financial instruments traded publicly for the first time.

This is the first time that the bank has tapped the public for cash to bolster its lending activities as well as fuel its aggressive expansion driven by a strong desire to become a home grown regional powerhouse in the banking sector. The bond is expected to become a public barometer of the company’s performance as it expands the local footprint while eyeing regional opportunities.

Family Bank chairman Wilfred Kiboro observed that the bank’s bond comes at a time when the financial sector is going through a very turbulent time arising from difficulties experienced by Imperial bank and liquidation of Dubai Bank – both within a period of two months. “Despite the turbulence and uncertainty in the market – institutional and individual investors had the faith, courage and confidence to invest in Family Bank bond and to keep their deposits firmly in the Bank,” observed Mr Kiboro.

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Family Bank Managing Director Peter Munyiri reiterated that as part of the capital raising strategy the Bank had decided to cap the local component to Ksh2 billion. The balance of Ksh2 billion of the first tranche would be targeting dollar investors.  

“The successful listing of the Family Bank Bond confirms the strength of the Capital Markets as a channel for raising of medium to long term funds,” said NSE Vice-Chairman Bob Karina.

The bond which was on sale for 10 days closed on 21st October 2015. The medium term note – which is by way of a public offer of debt securities – has been structured in such a way that the bank can continuously raise funds for the next five years for its strategic initiatives. The bank will direct the bond proceeds to create capacity for investment in areas of high growth potential – bolster its capital base, improve the banks overall IT infrastructure, assert its local presence whilst pursuing regional opportunities as well as lending activities.

The bank is riding on the emerging business opportunities in the country – as it races to grow shareholders’ value and get into the top tier space. It has opened seven new branches – including Migori, Chuka, Utawala, Thika Makongeni, Ruaka, Gateway Mall and Bamburi. Another four more outlets will be rolled out in two weeks’ time.

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