Family Bank on 2nd June 2021 received formal approval from the Capital Markets Authority to raise up to Ksh8 billion in tranches through a multi-currency Medium Term Note (MTN) by way of public offer to strengthen its capital base and support lending.
Family Bank targets to raise Ksh4 billion in its first tranche with the balance to be raised within the next five years in various tranches/series. “We are positioning the bank for the second phase of growth as per our 2020-2024 strategy anchored on growth and stability of the bank,” says Family Bank CEO Rebecca Mbithi.
This issuance comes after the Bank successfully redeemed its five-and-a-half year Medium Term Note worth Ksh2.0188 billion on 19th April 2021.
The banks wants to strengthen its capital base to support lending to micro, small and medium-sized enterprises and heavily invest in technology infrastructure while diversifying its products.
The lead transaction advisors are NCBA Investment Bank and Genghis Capital, PricewaterhouseCoopers (PwC) as the reporting accountants, MTC Trust and Corporate Services Limited as the Note Trustees, Mboya Wangong’u & Waiyaki Advocates as the legal advisors and Tim-Sky Media Services as the Media and Public Relations consultants.
Profit before tax over the past five financial years grew at compounded annual growth rate of 21.3% from 2016 to 2020. Interest income continues to be the primary revenue stream, contributing on average 77% 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% over the past five financial years from Ksh2.1 billion in 2017 to Ksh2.6 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, Family Bank has recorded impressive growth in total assets at a compounded annual growth rate of 6.9%, customer deposit at 13.9%, shareholder funds at 1.3% and loans and advances at 3.1% during the period 2016 to 2020.