, NAIROBI, Kenya, Nov 7 – Family Bank on Tuesday launched a month-long Rights Issue seeking to raise Sh1.25billion from its existing shareholders.
The bank will be issuing a total of 40.5 million additional shares in the Rights Issue which lasts until December 7, this year.
The bank’s new chairman Wilfred Kiboro said the money raised will be used for expansion across the region and improving information technology.
“We would like to grow within Kenya and even in the region if we are able to raise enough capital. And you know the region is exploding with opportunities. Currently we cannot even participate in things like gas exploration, geothermal projects, and road infrastructure, because of our low capital base,” Kiboro said.
The offer is on the basis of one new share for every six shares held as of May 31 this year at a price of Sh31 each.
Interested shareholders will be required to apply for their rights at any Family Bank branch country wide or at Dyer &Blair Investment bank.
“The eligible shareholders who will not have taken up their rights by the closing date shall be deemed to have renounced their rights while the new shares will start to trade on the Over Counter Market at 9am on January 14, 2013,” he said.
“We have our strategy to expand our branch network, expand our agency banking platform, and invest in our IT platform for our customers to be able to do internet banking. The capital will also help us to be able to take more deposits and also grow our asset book,” he added.
The bank also revealed that it will be receiving further funding in form of loans from several big investors in the next week with an aim of still growing its capital base.
“I would not want to say if the investors are local or international. Let’s wait… in the next 10 days we will tell you and you will know them better,” Kiboro said.
The chairman also touched on a likelihood of having an Initial Public Offer (IPO) in the near future to still grow its capital base.
Kiboro has however denied rumours that it was targeting to eat into Equity Bank’s market in the near future after it gets enough capital.
This was speculated especially due to the change in management of the bank which saw Kiboro resign as Standard Chartered Bank chairman and join the bank to replace its founder Titus Muya.
“Equity Bank is doing fantastic job and we continue to wish them well. What we know is that there is a very huge market outside there which we want to focus on and we are not trying to be Equity, we are Family. They have their own strategy and we have our own which we will follow religiously,” he emphasised.
Family Bank has assets worth Sh35 billion, 67 branches countrywide and over 1.2 million account holders.