Family Bank's net income doubles on cheap deposits, increased lending

Peter Munyiri, Family Bank managing director. Family Bank’s net profit more than doubled in the first nine months of the year, aided by cheap deposits and increased lending. Photo/FILE  

By Herbling David

In Summary

• Family Bank’s net profit more than doubled in the first nine months of the year, aided by cheap deposits and increased lending
• The mid-tier bank on Thursday said its profit after tax rose to Sh813.7 million for the period ended September 2013 from Sh341.9 million in a similar period last year

 

Family Bank’s net profit more than doubled in the first nine months of the year, aided by cheap deposits and increased lending.

The mid-tier bank on Thursday said its profit after tax rose to Sh813.7 million for the period ended September 2013 from Sh341.9 million in a similar period last year.

The lender’s net interest income increased 43.9 per cent or Sh2.03 billion to Sh3.1 billion as at September this year.

Family’s deposit costs dropped to Sh591 million from Sh1.2 billion, translating to savings of 637 million that is higher than the additional profit of Sh471 million.

Its loan book grew by Sh4.5 billion in the three months to September to top Sh25.4 billion following a drop in lending rates after CBK cut the signal rate to 8.5 per cent in May.

“The performance is largely attributed to the growth in our loan book and increased income from fees and commissions,” said Peter Munyiri, chief executive of Family Bank.

Family’s earnings in the quarter to September almost doubled, during a period when KCB Bank and Equity reported slower growth.

Mr Munyiri said the mid-sized lender leveraged on its 625 agency banking outlets to mop up Sh2.8 in cheap deposits in the last quarter, bringing its total deposits to Sh31.1 billion.

Family Bank plans to open 15 more branches this year to add to its current has 71 branches and 117 ATMs across Kenya.

It has 1.3 million deposit accounts and is now broadening its product offerings beyond the micro enterprise sector to engage in institutional and corporate banking, mortgage, Treasury products and online banking.

Family Bank’s insurance arm, its sole subsidiary, raked in Sh13.4 billion in profits to the company.

Its volume of bad loans remained flat at Sh1.3 billion in the three months to September, defying an industry wide trend that saw total non-performing loans increase by 3.1 per cent in the same period.