NAIROBI, Kenya, Jun 8 – Family Bank has put on hold plans to go public due to what the Bank’s Managing Director David Thuku terms as an unconducive market.
Speaking to Capital FM Business Thuku, nevertheless, says the bank is committed to listing at the Nairobi Securities Exchanged.
The listing plans were first announced in July 2011 but have been shelved following a bear run at the NSE that has seen investors lose billions.
“The time we almost went in, ‘the market went the way it went’. We are watching closely and at an opportune moment we will,” he stated.
Bank stocks were particularly hit following the introduction of the interest rate cap law in August 2016, dropping their stock value by 14 percent by January 2017. an average of 1420%** of their value.
In 2015, bank stocks shed Sh180 billion in valuation due to a bearish market that continued throughout 2016.
Thuku adds that Family Bank has also been waiting to finish with its expansion plans as well as strengthen shareholders value before going public.
The bank is planning to invest in upgrading its digital banking platforms and increase its investments in non-interest income.
“If the market gives us confidence that this is the time to plug in, we will plug in so it’s no easy to say its’ by time X,” he adds.
The medium size lender became a fully fledged commercial bank in 2007 after operating as a building society since 1984.
In 2016, the firm took a hit owing to sustained social media attacks which led to significant withdrawals.
Deposits went down by 60 percent to Sh11 billion from Sh28.7 billion while nonperforming loans in the period under review doubled.
The bank posted Sh664 million pretax profit for 2016 a decline from the previous Sh2.9 billion the bank posted in 2015, a drop the bank attributes to a one-off staff restructuring exercise that cost the bank Sh400 million as well as a slowdown in the loan book.