Family Bank has bounced back to profitability and booked a 101.5 million shillings net profit in 2018 half-year results, a growth attributed to cost containment measures, drive in digital banking and a rise in deposits.
The Bank recorded slight growth in customer deposits closing at 47.8 billion shillings as at June 2018. Total non-interest income grew by 11.9 percent to 1.25 billion shillings compared to 1.1 billion shillings in the same period under review in 2017.
The Bank’s cost containment efforts resulted in a decrease in the total operating expenses by 11.9 percent closing the period at 3.1 billion shillings. It maintained a strong liquidity position closing the period at 34.6 percent.
The half-year profit position is a remarkable turnaround from the same period last year when the Bank registered a loss of 492.4 million shillings.
According to the Family Bank Managing Director and Chief Executive Officer Dr. David Thuku, they have remained focused on operational efficiency and revenue optimization to fuel their recovery strategy over the first half of 2018.
“This focus has borne fruit as evidenced by the remarkable rebound to profitability and consistent growth over the six months period. We will continue to drive internal efficiencies through optimization of non-traditional channels like mobile banking and agency banking as well as the alignment of our business value propositions to the needs of our customers. We are optimistic of a stronger second half riding on the traction on our digitization strategy and support from our customers,” he added.
Net interest income grew marginally by 3.8 percent while staff costs significantly decreased by 16.8 percent to 881.2 million shillings compared to 1.1 billion shillings recorded in June 2017. The tough macroeconomic environment saw the gross non-performing loans and advances increase by 7.2 percent as at June 2018 compared to same period under review in 2017.
Interest income from loans and advances also decreased by 7.0 percent and stood at Sh2.8 billion compared to 2.9 billion shillings at the end of June 2017 but this was partially offset by a 31.1 percent increase in interest earned on government securities.