Family Bank’s H1 net profit up 17% to Sh1.6bn

August 27, 2024 Maryline Josephine

Family Bank Group has reported a 17 percent jump in profits after tax to Kes1.6 billion in the six months to June 2024, driven by an increase in interest income. The lender said its profits, which grew from Sh1.4 billion in a similar period last year, was helped by additional liquidity which led to increased lending.

“The Bank invested the available liquidity in government securities which saw this investment class increase by 69 percent to Kes41.9 billion from Kes24.8 billion due to the muted demand of credit from customers because of the prevailing macroeconomics,” read the bank’s H1 financial statement in part.

The bank’s revenue increased from Kes7.2 billion to Kes9.1 billion. However increased expenses ate into its earnings after costs rose by 15 percent, from Kes4.2 billion to Kes4.9 billion in the same period as a result of continued investments in technology, people and digital transformation.

Net interest income increased by 12.7 percent to close at Kes4.9 billion, while interest income grew by 26 percent driven by the growth in loans and the additional investments in government securities.

This growth was muted by the higher cost of funding witnessed during the period which saw a 46 percent increase in interest expense in line with the high cost of funding witnessed in the first half of 2024. In the half, the bank’s total assets also increased by 19.2 percent to Kes158.3 billion up from Kes132.8 billion in June 2023.

“The growth was funded through deposits which increased by 18 percent from Kes100.8 billion to Kes119 billion. With the additional liquidity, the Bank continued to support the customers with additional lending which saw the loans and advances increase to Kes91.4 billion from Kes86.5 billion in June 2023,” read the bank’s H1 financial statement.

The Group’s income diversification strategy proved successful with non – funded income rising notably by 20 percent to Kes2.3 billion. This was largely driven by the fees and commissions, trade finance and gains from securities trading.

“As a Group, our focus in the first half of the year has been on prudent financial management by strengthening our liquidity position while working on satisfying customer needs.” said Family Bank CEO Nancy Njau.

Thus the Bank’s total capital and liquidity ratios remained strong, and well above the regulatory requirement with total capital ratio closing at 16.6 percent against 14.5 percent and liquidity ratio closing at 42.2 percent against 20 percent.

“The performance of this first half is a testament of the Bank’s agility and resilience in the face of enduring market uncertainties. We continue to prioritise building scalable infrastructure to continue supporting the significant balance sheet growth we have experienced over the last few years,” said Family Bank CEO Nancy Njau.