Family Bank of Kenya has called an extraordinary general meeting of its shareholders to seek their approval to list on the Nairobi Securities Exchange (NSE).
The medium sized bank, which has flirted with public listing for over a decade, will be listing by way of introduction, meaning it does not plan to sell new shares but will be giving shareholders a trading platform to make their stocks more liquid.
Presently, Family Bank shares are traded on the over-the-counter (OTC) market which facilitates trade by matching a known buyer to an identified seller through a broker. The bank's shares were yesterday trading at Sh16 each.
“The company be and is hereby authorised to apply for listing by way of introduction of all its issued ordinary shares on the official list of the Nairobi Securities Exchange (NSE) and to facilitate the admission of its shares to trading on the Main Investment Market Segment (or other relevant segment) of the NSE,” reads the notice of the meeting.
The bank has 1,305,195,209 issued shares which it plans to bring to market. At a price of Sh16 each, the bank is currently valued at Sh20.8 billion.
The directors’ decision not to raise additional funds from the market with the listing signals success of its recently concluded private placement. The bank was seeking to raise Sh6.2 billion from deep-pocketed investors in the private placement whose results management said will be released mid-October.
The bank’s shares have traded at the OTC market since 2006 with plans to list at the NSE touted since 2011. Management said they were confident of listing this time round with hopes of riding on the recent market recovery.
“The market has corrected itself, before it was subdued so this is the right time,” said Family Bank’s chief financial officer, Paul Ngaragari.
Family bank reported a 38.6 percent growth in profit after tax for the six months ended June to Sh2.2 billion up from Sh1.6 billion in a similar period a year earlier. The bank's growth has seen its capital ratios thin against statutory requirements.
The bank's total capital to total risk weighted assets stood at 15.9 percent giving it a 1.4 percent headroom above the mandatory requirement of 14.5 percent.
The bank has a Sh4 billion medium term note maturing in mid-December.
“The moderate decline in capital adequacy ratios since 2021 alongside the maturity of its Sh4 billion medium-term note on 17th December 2026 frames an opportune moment (for listing),” said analysts at Standard Investment Bank in a note to investors.
“A recovering capital market is anticipated to provide a conducive environment, with the listing expected to enhance liquidity, capital appreciation potential, and a dilution pathway for investors seeking to comply with the Central Bank of Kenya’s maximum shareholding requirements,” added the investment bank which valued the bank at Sh16.54 per share.
Top ownership of the bank is dominated by the founder Titus Muya and his family. It also includes the Kenya Tea Development Agency with a 16.2 percent stake.
