Family Bank: Shareholders approve new Holding Company
Family Bank: Shareholders approve new Holding Company
Family Bank shareholders have approved the establishment of a non-operating holding company to oversee shares in Family Bank Kenya and other non-banking subsidiaries in preparation for expansion.
"Regional expansion remains a focus for the Bank in supporting our business growth and expansion strategy. We are exploring the possibility of expanding our footprint to countries within the East, West, and Central African region," said Family Bank CEO Nancy Njau.
"This non-operating holding company will allow for capital efficiency, risk management, and the establishment of separate governance structures for both banking and our non-banking subsidiaries," she added.
The approval during the lender’s Annual General Meeting saw the shareholders also approve a KES723 million dividend payout for the financial year ending December 2023, down from the Kes795 million paid in 2022.
The Bank posted a Kes2.5 billion profit after tax for the year ending December 31, 2023, a 13.3 percent increase from Sh2.2 billion in 2022. The period was marked by high inflation, high interest rates, and a depreciating local currency, which negatively impacted customers' purchasing power and led to a 180 percent increase in loan loss provisions. Additionally, the directors recommended a first and final dividend of Sh0.56 per share for 2023.
Read also: Family Bank sponsors 352 needy students
Long-term debt
Further, the lender’s CEO Nancy Njau expressed optimism for 2024, stating, "We believe that the tough part of the operating environment is behind us, and we are well positioned to take advantage of the market segments we operate in as the market turns."
Interest expense from deposits and long-term debt grew by 41 percent due to high funding costs, while interest income increased by 20 percent, resulting in a 9 percent rise in net interest income. The slower growth in interest income was due to the Group's decision not to pass the full cost of funding to customers, thus cushioning them from the sharp rise in interest rates in 2023.
