Family Bank owners clear Sh3.5bn issue

Money Markets

Beba Card, one of the cashless fare payments in the matatu industry. Family Bank plans to launch its own plastic card ahead of the government’s revised December deadline for a ban on cash transactions in matatus. PHOTO | DIANA NGILA |   NATION MEDIA GROUP

By GEORGE NGIGI

In Summary

• Family is looking at increasing its branch network in the country currently at 78 branches.........

Family Bank shareholders have agreed to inject an additional Sh3.5 billion in the bank through a rights issue that will fund expansion and boost capital.

Shareholders of the mid-sized lender also approved a share split to double the number of its issued shares making them more affordable in the over-the-counter trading. The lender’s management disclosed it will be looking for additional capital through debt issues.

“We considered the rights issue a faster and preferred option even as we mull over local corporate bond and long-term financing from international institutions,” said managing director Peter Munyiri.

The bank said in the eight months to August it had posted a profit before tax of Sh1.78 billion, higher than the full year profit of Sh1.75 billion recorded last year. Family is looking at increasing its branch network in the country currently at 78 branches.

READ: Family Bank branch extends business hours

Central Bank will increase the minimum capital requirements of commercial banks at the end of the year and the additional funds will help Family Bank comply.

As at the end of August total capital to total risk weighted assets stood at 13.2 per cent. This is higher than the current minimum requirement of 12 per cent but lower than the new CBK ratio of 14.5 per cent.

READ: Family Bank joins quest for cashless fare payments licence