Family Bank has received formal approval from the capital markets regulator to proceed with its capitilisation plans. The Capital Markets Authority authorised the lender to begin raising the targeted Sh10 billion through a Senior Unsecured Multicurrency Medium Term Note programme.
The programme has been structured in such a way that the bank can continuously raise funding for the next five years for its strategic initiatives up to the aggregate limit.
Family Bank Group Chief Executive Peter Munyiri said the lender’s growth momentum and strategic plans needed to be sustained, hence the need to raise additional capital.
“This approval paves the way for the bank to raise additional capital to support its strategic growth initiatives.
“The notes will be issued in tranches, with the first tranche expected to be launched at the end of this month or October 1,” Mr Munyiri said.
This transaction will be by way of public offer of debt securities by the bank. The bank plans to use the proceeds to strengthen its core capital, improve its overall IT infrastructure, to propel domestic and regional expansion plans, as well as for lending activities.
Faida Investment Bank and NIC Capital Limited are the appointed joint lead transaction advisers and placing agents for the offer.
The mid-tier lender reported a 34.9 per cent increase in net profit in the first half of 2015, aided by a surge in income from lending and foreign exchange trading.
The bank reported a net profit of Sh1.18 billion in the first half of 2015, from Sh875 million over a similar period in 2014. The bank has been on an expansion drive, opening seven new branches including Migori, Chuka, Utawala, Thika Makongeni, Ruaka, Gateway Mall and Bamburi.
Five more outlets are expected to be opened by the end of the year. Mboya Wangong’u and Waiyaki Advocates are the legal advisers of the issue, Deloitte are the reporting accountants and BSD Group are the marketing and PR consultants.