Pan Africa Insurance raises its Family Bank stake to 5pc

By VICTOR JUMA

In Summary
The insurer now has a five per cent stake in Family Bank, up from 3.59 per cent in March last year, says its CEO Tom Gitogo.
Pan Africa first bought into Family Bank in December 2012 when it participated in the lender’s Sh1.2 billion rights issue.
The insurer says it has its eyes on getting a slice of the booming lending business besides seeking to expand its bancassurance.
Pan Africa Insurance has bought an additional 1.41 per cent stake in Family Bank and signalled an intention to raise its shareholding further.

The insurer now has a five per cent stake in Family Bank, up from 3.59 per cent in March last year, says its CEO Tom Gitogo.

Pan Africa first bought into Family Bank in December 2012 when it participated in the lender’s Sh1.2 billion rights issue.

"Our stake in Family Bank is at five per cent. We are interested in raising it further should there be an opportunity," said Mr Gitogo.

The insurer says it has its eyes on getting a slice of the booming lending business besides seeking to expand its bancassurance.

Family Bank has announced plans to launch a second multi-billion-shilling rights issue this year, which could offer Pan Africa a window to raise its stake by absorbing shares of investors who fail to take up their full rights.

Pan Africa invested Sh310 million in the December 2012 rights issue when the bank’s shares were offered at a price of Sh31 apiece, a move that saw the insurer receive 10 million units of the stock, through its investment arm Pan Africa Securities that also owns properties in Runda Estate under the Mae Properties brand.

READ: Pan Africa Insurance buys minority stake in Family Bank


Family Bank directors said they could raise up to Sh3 billion in the fresh cash call to fund expansion plans and meet higher capital adequacy ratios set by the Central Bank of Kenya.

"In the course of the year we are likely to do another cash call to support growth," Family Bank says in its latest annual report.

The bank has set sights on becoming a top-tier lender by 2016.

It reported a 109.6 per cent net profit growth to Sh446.4 million in the first quarter on the back of increased lending.

The Kenya Tea Development Agency and pension fund LAP Trust are among the other institutional investors holding Family Bank shares.

The two paid about Sh1.5 billion to acquire 22.4 per cent stake. Family Bank’s founder Titus Muya stake was diluted in the cash call.

Source Business Daily