Family Bank hits Sh50 high on bullish Nairobi bourse debut

Family Bank made a bold debut on the Nairobi Securities Exchange (NSE) on Tuesday, hitting a high of Sh50 in early trading.

The tier-two bank opened trading at Sh22.58 before rising sharply to Sh49.50 within 30 minutes.

It later cooled to Sh36, briefly jumped to Sh43, and settled at Sh34 by midday. 

By that time, Family Bank shares were trading at more or less the same price as Safaricom (Sh32.70), Absa Bank (Sh32.45), and Cooperative Bank (Sh34.80).

The 1.6 billion shares had been offered at Sh18 a piece. The share price closed the day at Sh26.

Before yesterday’s public listing, Family Bank was no stranger to the exchange, having been there twice to raise funds, and on both occasions, the offers were oversubscribed.

The first was five years ago, when the bank raised Sh4.4 billion through a corporate bond with a Sh3 billion target.

The bank also completed a private placement last year to raise equity capital, which was oversubscribed by 30 per cent to raise Sh8 billion.

These two listings, said board chairman Lazarus Muema, were a good sign that the bank is ready to go public, as they provided the necessary confidence boost to shareholders.

“The purpose of our listing today is not mainly to raise capital, but to improve tradability and liquidity for the current and future shareholders,” he said.

The bank, which has branded itself as the go-to institution for small and medium-sized enterprises, now boasts over Sh200 billion in assets.

Chief Executive Nancy Njau reflected on last year’s performance, when the institution recorded a 55.4 per cent jump in profit after tax to Sh5.4 billion.

At the same time, the loan book expanded to Sh105 billion.

In the first quarter of the year, the bank recorded a profit after tax of Sh1.6 billion, a 52.6 per cent year-on-year growth.

She said it is uncommon for an institution to, on key metrics, record a double-digit annual compounded growth rate.

“Our liquidity ratios and capital adequacy ratios have remained above the statutory requirements,” she said.

Njau said the bank, which currently has 96 branches, will add four more.

She cited the bank’s 2025-2029 strategic plan, centred on customer propositions, productivity, efficiency, and digitisation and data utilisation, saying it will help achieve its goal of being the preferred lending institution among traders, entrepreneurs, and businesses.

“Our ambition to become a tier one bank in Kenya has never been closer than it is now,” she said.

NSE Chairman Kiprono Kittony said that by listing, Family Bank is securing a pool of funding from both local and international investors for its long-term goals.

He described the listing as a major win for the NSE.

“The admission of this bank represents much more than a corporate transaction. It represents the continuing strength of Kenya’s market architecture and reinforces our position of the NSE as being a premier capital-raising platform in Africa,” he said.

Kittony said there have been clear strategies, deliberate policy actions, product diversification, innovation and collaboration with stakeholders to help the NSE stand out as a preferred capital-raising platform.

“We hope that this listing serves as a catalyst, a catalyst that inspires family-owned businesses, privately held corporations, emerging champions and regional enterprises to view capital markets not as a destination of last resort but as a strategic partner in their growth journey,” he said.

Family Bank becomes the 12th financial institution to be listed on the NSE.

By the time the markets closed at 3 pm, Family Bank’s shares had settled to Sh26 a share. This meant Standard Chartered remained the priciest bank in terms of share value at Sh335 a share as of 2:50 pm on Tuesday, followed by Stanbic Bank at Sh290.

Central Bank of Kenya (CBK) Board Chair Andrew Musangi, who was the chief guest at the Family Bank listing event, said that, as the regulator under his tenure, he looks forward to serving the stakeholders rather than policing them.

“Sometimes we may look like we have a tug of war, but we are pulling in the same direction. That direction is intended to achieve the growth of this country,” he said.

He said his goal is to ensure no institution closes shop even during the ongoing debate on core capital requirements.

“There have been a lot of conversations about core capital; it does not apply to you (Family Bank). You are way past the target mark. For you, my next challenge is to look around the market; there might be a few people happy to sell, and you can acquire them and help them grow,” he said.