Titus Muya, Family Bank founder and outgoing chairman. Mr Muya, who is a seasoned commercial farmer, remains in the Family Bank board as a director. FILE
What you need to know:
Family Bank intends to increase its equity or shareholder funds to Sh10 billion before listing.
That level of capitalisation should help drive growth of the bank’s loan book, power its regional expansion expansion agenda and support deposit mobilisation.
When Titus Muya stepped down as Family Bank chairman last Friday, he did not just exit an institution he founded and has managed for 28 years.
It also marked the formal fall of the curtain on a corporate career that straddled banking, insurance and real estate.
But he left surrogates and trusted allies in charge.
“There comes a time when you want some change, call it a day and go do something different or nothing at all,” Mr Muya said on Friday when he introduced Mr Wilfred Kiboro to the media as the designate Family Bank chairman.
“I shared this desire with members of the management who agreed with me, paving the way for the search for a new chairman to begin in earnest,” he said.
Mr Muya, a former civil servant, entered the world of entrepreneurship with the founding of Family Finance Building Society in November 1984 at a single outlet along Nairobi’s Kenyatta Avenue.
But the huge expenses associated with the city soon forced the entrepreneur to open a branch in Kiambu Town one year later.
It was the beginning of a journey that saw Mr Muya serve as the society’s managing director and chief executive for 22 years before assuming the chairmanship six years ago.
These past six years are also the time that Family made the transition from a building society to a fully-fledged bank.
Since making that transition in 2007, Family Bank has made the difficult climb of reorganising the business and freeing it – though slowly – of the Muya family’s grip.
The bank has also spread its footprint, establishing 67 branches countrywide, signing up 1.2 million customers and accumulating an asset base of Sh35 billion.
This is the institution whose chairmanship Mr Muya formally relinquished to Mr Kiboro on Friday.
Mr Muya, who is a seasoned commercial farmer, remains in the Family Bank board as a director.
At the centre of his farming interests is Daykio Plantations Limited, a company he founded in 1984 and has in recent years transformed into a big player in the real estate market with vast interest in areas such as Kitengela, Juja and Kamulu, off Kangundo Road.
In the past five years, Daykio has deepened its foray into the real estate market with the purchase of huge chunks of land around Nairobi.
The company makes its money by subdividing the land into small parcels and sells via payment plans of up to two years. Buyers who want to develop the plots can choose to finance it with the assistance of Family Bank.
More recently, Daykio has moved deep into the real estate market developing and selling homes.
The company is currently selling 30 three-bedroom apartments in Lavington under a purchase plan that offers potential buyers up to 90 per cent financing from Family Bank.
On Friday, Mr Muya announced that he had also stepped down from a senior leadership position he held in Daykio, handing over the reins to his daughter Anne Muya.
His son, Julius Muyah, chairs the company’s board as well as that of Kenya Orient Insurance, the third business owned by the senior Muya.
Kenya Orient was incorporated in 1982 by the Al-Fateem Group of Dubai and changed hands in 1988 when it was acquired by Kenyans.
The insurance firm, underwrites all segments of the general insurance business.
“I have since surrendered control of the two companies and you can all see the direction I am taking,” Mr Muya said when asked about his next move.
“If anyone knows any company where I am still the chairman, they can inform me,” he added, albeit jokingly, “and I will immediately tender my resignation.”
Mr Muya is the single largest shareholder at Family Bank with a 17.3 per cent stake, a position that put him at odds with the Central Bank of Kenya which wants independent directors to chair the boards of banks as a bulwark against possible conflict of interest.
Mr Kiboro’s entry into Family Bank puts him in charge of one of Mr Muya’s best performing businesses that has set its sights on listing at the Nairobi Securities Exchange (NSE).
Mr Kiboro, who is also the chairman of the Nation Media Group, said that his priority is to improve the bank’s capitalization and transform it into a Tier-1 bank in the next five years.
“The bank may be short on capital now but it is not short of ideas and the strategy is to ensure that this position is improved,” he said.
“If a bank is not well capitalised it cannot absorb shocks that often arise in the market and this is why the Central Bank of Kenya has been asking banks to improve.”
Mr Kiboro said Family Bank would consider liquidating its government securities to increase the amount of funds available for onward lending to customers as well as go public through an IPO “in two years once the institution has dealt with efficiency issues and grown its value.”
The information memorandum on Family Bank’s ongoing rights issue shows that by the end of last year it had Sh3.3 billion in shareholder funds.
This amount is expected to increase once the rights issue that is seeking to raise Sh1.5 billion ends later this month.
Family Bank intends to increase its equity or shareholder funds to Sh10 billion before listing.
That level of capitalisation should help drive growth of the bank’s loan book, power its regional expansion expansion agenda and support deposit mobilisation.
Mr Kiboro, 68, joined Stanchart’s board on April 2, 2007 and became its chairman two years later on May 28, 2009.
He has previously served as the CEO of the Nation Media Group and as managing director of Rank Xerox Kenya. He also chairs Wilfay Investments Limited, a family owned enterprise.
