Family Bank has revived plans to list on the Nairobi Securities Exchange (NSE) and raise capital to make it a tier I lender, having recovered from the 2017 confidence crisis that was triggered by malicious social media attack.
The bank, currently a tier II lender, had put the plan on hold but chairman Wilfred Kiboro said on Monday that recovery in the last two years has lifted prospects of joining the Nairobi bourse.
The bank’s board is finalising a five-year strategy which will be shared with shareholders. Among the plans is to join the top tier within this period.
“Our long-term objective is to become a tier I bank. We got derailed with 2017 headwinds but slipping is not falling. We have woken up and dusted ourselves and the dream is alive,” said Mr Kiboro.
“We missed the 2017 target because we could not go and list a bank that was in red. It was not going to be an attractive scene to put in the market.”
The bank booked Sh1 billion loss — an all-time worst earnings — in 2017 which coincided with the period the bank suffered a social media attack that suggested it was going to fold.
This led to panic withdrawals of deposits but the trend has since been reversed. Customer deposits grew 24.2 percent to Sh60.2 billion in nine months to September.
Family Bank’s net earnings for the first nine months grew 3.75 times to Sh704.6 million driven by increased interest and non-interest income as operating costs reduced.
Mr Kiboro said joining the bourse will give the bank access to capital and also give its investors increased flexibility of trading their shares. Currently, the shares trade over the counter and this comes with limited liquidity.
The nine-month performance surpassed the Sh244.2 million profit that was achieved in the full year ended December 2018, with the full year pre-tax profit projected at between Sh1.4 billion and Sh1.5 billion.
It last posted a net profit above Sh1 billion in 2015 (Sh1.98 billion) before dropping.