FEP Holdings has announced its plan to offload its five percent stake in Credit Bank after CBK declined to approve the direct acquisition of a 25 percent stake of the bank by the investment company.
FEP Holdings Chief Executive Officer Mr Maurice Korir said that CBK had expressed reservations about the company’s share register and financial capability to adequately capitalize Credit Bank. “We will therefore take another two years to work on other business priority areas before considering this option or any other in the banking sector,” said Mr Korir.
He expressed confidence in the fortunes of the bank saying that FEP Holdings members were allowed to invest in the bank directly and have to date subscribed for shares worth over KSh1 billion in the capital raising drive which closes on 15th November 2016.
“Credit Bank is a profitable bank with sound management and sound ratios. The bank made a return to profitability in 2016 with a pretax profit of Kshs 123.7m for the nine months ending September 2016, this is an impressive turnaround by any yardstick,” he added.
He said the investment company would instead channel its resources towards beefing up Fountain Credit Services, a microcredit outfit owned by the Group. “Our current focus is to develop the existent businesses instead of venturing into new initiatives. This should not be interpreted to mean that we will be static, rather, we are avoiding spreading ourselves too thin,” said Mr Korir.
The investment company however still has interests in the financial services sector with entities such as FEP Insurance Agency, Fountain Credit Services and mobile money transfer operator Mobikash.
FEP Holdings has now embarked on beefing up the operations of FEP Credit Services and installed a core banking system that will help the organization disburse digital loans.
