Oral East Africa>Family Bank builds up 24 percent profit jump on stability At the hut of the story

Written by Oral East Africa

Family Bank Group net profits jumped a quarter to Kes910.4 million in the first three months of the year on a balance sheet geared for safety during a turbulent period.

The bank said it made strategic investment in secure and stable investment avenues and effective asset management even as the economy continued to grapple with the adverse effects of high inflation.

Family bank’s revenues grew steadily along diversified lines from government paper, loans to non-funded income like forex trading.

Loans and advances grew by 4 percent to Kes87.44 billion while investments in government securities increased by 29 percent to Kes32.7 billion.

“Our first-quarter results are a significant improvement from our performance last year. The bank remains resilient amid the tough operating environment. We remain committed to supporting our customer needs, investing in our workforce and optimizing our operational efficiencies. This will ensure long term sustainable value creation to our shareholders,” said Family Bank CEO Nancy Njau.

As a result, net interest income grew by 19.9 percent to close at Kes2.4 billion in the quarter from Kes2.0 billion recorded in the same period last year supported by an increase in income on government securities and loans and advances.

The Bank’s income diversification strategy resulted in a 29.7 percent in non-funded income to close at Kes1.3 billion.

Against macroeconomic turbulence

Total non-performing loans increased marginally by 2.8 percent reflecting the current operating conditions. The Bank’s statutory ratios compliance position remained strong with the total capital ratio closing at 16.5 percent while the liquidity ratio stood at 43 percent against the minimum statutory ratio of 20 percent.

Family Banks steady growth expanded the balance sheet as total assets increased by 10.7 percent to close at Kes145.9 billion for the period under review leaning on a 19 percent increase in cheaper customer deposits to Kes110.43 billion.

The growth is crucial at a time banks are struggling to find deposits with those available attracting huge interest in line with the current macro-economic conditions where interest rates have been on the rise. While customer deposits are cheaper to market deposits, the general cost of funds for Family Bank still edged higher pushing up interest expense costs 47.1 percent to close at Kes2.0 billion.