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Family Bank to spend Sh600m on new branches this year

A Family Bank branch in Nairobi. The bank will spend about Sh600 million to open 20 more branches this year, a move that will make it one of the fastest-expanding banks in the market. File
A Family Bank branch in Nairobi. The bank will spend about Sh600 million to open 20 more branches this year, a move that will make it one of the fastest-expanding banks in the market. File 

Family Bank will spend about Sh600 million to open 20 more branches this year, a move that will make it one of the fastest-expanding banks in the market.

This will brings its total branch network to 84, up from the current 64.

The expansion programme is expected to intensify competition for customer deposits, which previously pitted large banks against each other.

Family Bank’s deposit base has expanded to the current Sh25 billion from Sh17 billion as of June 2011.

Apart from setting up branches, it is also looking to riding on the agency banking model to grow its client base.

The new branch network will edge it closer to the large banks such as Equity Bank, which boasts 135 branches in Kenya apart from subsidiaries in the region.

Family Bank is also targeting high-end clientele with new products such as asset finance, forex, trade finance, and corporate banking which were introduced early last year, the bank said in a press statement.

The establishment of big businesses in Kenya and the growth of Small and Medium Enterprises (SMEs) in need of products such as asset finance has enhanced the role of banks’ treasury departments in the earnings of major commercial bank.

Family Bank chief executive Peter Munyiri said the bank has been losing its clients to bigger banks due to lack of these products.
“We have been growing clients after which they leave us for advanced services with bigger banks,” he said.

The bank hopes to increase its current customer base of 1.2 million and grow its deposits to enable it grab a larger share of the lending market.

The indigenous bank has already opened branches in Meru and Kikuyu this year and five others are currently in various stages of completion.

The bank will open four branches in Mombasa, one in Karatina, Eldoret and Mumias each while leveraging on the agency banking model to cut down operating costs.

The bank, which has been planning a listing at the Nairobi Securities Exchange, has dropped its earlier buyout plan in South Sudan in favour of establishing a subsidiary from scratch in the new market, citing lack of suitable acquisition targets.

Kenyan banks such as Equity Bank, and KCB are already making good earnings from South Sudan.

Family Bank grew its earnings to Sh187.4 million in the period ending June last year from Sh162.6 million at the same period the previous year.

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