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Family Bank Posts Ksh.435 Million in Profit Before Tax

BY Soko Directory Team · March 29, 2019 06:03 am

Family Bank has posted 435 million shillings on profit before tax for the Financial Year 2018, reversing a 1.36-Billion-shilling loss the previous year.

This remarkable turnaround has been attributed to the lender’s aggressive transformation program and increased focus on digital banking services, growing the bank’s non-funded income as well as cost management.

Family Bank Board Chairman, Dr. Wilfred Kiboro also attributed the improved financial performance to an increase in non-interest income which grew 15 percent from the previous year and a 1.5 Billion shillings reduction in operating costs, translating to a 19 percent saving relative to the 2017 financial year.

The Bank’s deposits grew by 2.4 percent to hit 48.4 Billion shillings while the loan book remained largely steady, recording a growth of 1.5 percent to 4.1 Billion shillings. However, the quality of the loan book improved in the 2018 financial year with the lender posting a 17 percent reduction in loan loss provisions.

According to Dr.Kiboro, the lender’s growth strategy, pegged on innovation and providing value for customers, yielded great results in 2018.

In 2018, Family Bank is said to have invested heavily in revamping their PesaPap mobile application through enhanced features as well as the customer journey and experience.

“We have advanced over 1.2 billion shillings through the App since the launch of the mobile lending service in July 2018.,” Dr. Kiboro added.

In line with the global trend, Kenyan financial institutions have increasingly resorted to innovation in an attempt to boost revenues while reducing transaction costs. With the growth of mobile and online banking, banks have invested billions of shillings in revamping their technology platforms to meet the surge in demand for fintech services.

“We will continue to invest in our mobile and online banking capabilities to grow our business through increased lending and offering a superior customer experience,” added Dr. Kiboro.

Kenya’s banking industry has been grappling with a cap in the interest rate on loans imposed in 2016 in a move the government said was aimed at lowering the cost of credit to small and medium-size businesses. However, commercial lenders argue the interest cap has hurt borrowers and should be reviewed.

“We are optimistic about prospects for the banking industry even as discussions on the interest rate cap continue. In the same breath, we are optimistic about Family Bank’s growth prospects in 2019, has implemented strategies and measures that have already set us on a strong growth path. Our focus as a business going forward is to grow our revenue base while capitalizing on the exponential growth in mobile banking,” stated Dr. Kiboro.

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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