Family Bank swings to 26 per cent profit growth in pandemic year
Family Bank has defied adverse effects of the pandemic to post a 26.3 per cent jump in full year profit to KES1.2 billion from KES949.8 million in 2019.
In a year that saw all tier one lenders report a double digit slump in net earnings, Family Bank’s surprise growth in profit was driven by greater operating income that rose to KES9.1 billion from KES7.8 billion in the prior year.
Figures released by the lender shows its earnings from investments in government securities went up by 65.9 per cent to KES17 billion from KES10.2 billion in the prior year.
The lender’s net interest income surged by 28 per cent to KES6.2 billion from KES5 billion realized in 2019.
Family Bank Chief Executive Officer Rebecca Mbithi said: “Our loan book expanded by 11.8 per cent year on year to close at Sh56.6 billion as we continued to support our customers, who saw new opportunities despite the Covid-19 pandemic.”
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Family Bank’s operating expenses increased by 20.2 per cent to KES7.6 billion from KES6.3 billion driven by a loan-loss reserve that surged to KES1.62 billion from Sh734million in 2019.
In a year that has been market by subdued economic growth and job losses due to the pandemic, the bank’s non per forming loans contracted by 11.4 per cent per cent to KES3.9 billion from KES4.4 billion in 2019.
To help provide relief to borrowers whose cash flow has been impacted negatively by the pandemic, the lender restructured loans of worth KES16 billion to support micro, small and medium enterprises.
According to the Central Bank of Kenya, over the last one year, loans amounting to KES1.7 trillion were restructured. The outstanding restructured loans as at end of February amounted to KES569.3 billion.
The board of Family Bank has, however, not declared the payment of a final dividend to shareholders despite the steady profit rise for the lender amid declining sector profitability due to pandemic disruptions.