Family Bank CEO David Thuku
Mid-tier lender Family Bank is looking for partners to raise funds and help keep its doors open. The bank’s CEO David Thuku said the lender is currently in talks with some potential investors as it seeks to reinforce its debt and equity positions by March.
“We are looking at partnering with an equity investor and possibly one or two debt financiers. Hopefully by end of March we will have tied the loose ends and we will come out publicly about it,” he said.
However, he said the talks were still in initial stages and therefore not possible to tell what size of stake the bank may give out to the equity investor or the amount of money it will be looking for.
Speaking after a breakfast meeting with the bank’s institutional clients, Mr Thuku told the press the prevailing bad conditions in the stock market cannot allow it to issue a bond or call for a rights issue. “The way the market conditions are, this may not be the wisest time to raise a corporate bond. We decided to look for a financier from a different stream,” said Thuku.
Nairobi Securities Exchange (NSE) has been on a dismal run, slipping it into a seven-year low. In mid-January, NSE 20 Share Index that tracks performance of top 20 blue chip companies sunk below 3,000 points psychological level. It has taken it five weeks to rise slightly above this level.
We will resolve all murders, police assures
The bank is eyeing to expand its branch network by three this year to hit 95 even as the CEO said that it will be taking cautious expansionary approach in this election year. The three will be opened at River Road, Wangige and Eastleigh by the second quarter of the year.
“With the new law [of capping interest rates], we will have to think carefully how we redeploy our capital because we need a lean and efficient system and operations to be commercially viable,” he said. The bank has brought on board McKinsey consultancy firm to help in remodeling the business structure to find ways of boosting its efficiency. They will be with the bank for one year.
Going forward, the CEO said that the bank wants to grow alternative sources of revenue to diversify from interest revenue. Many organisations that have hired consultants have ended up cutting jobs. However, Thuku insisted that job cuts will be least on the roles of the consultant.
Last year the lender was entangled in the National Youth Service scam along several other lenders for having transacted with suspicious customers. “We experienced some run on deposits last year. We have learnt our lessons and intervened accordingly. If there will be any money laundering in Kenya, it won’t be at Family bank,” said bank chairman Wilfred Kiboro.