Family Bank’s net profit for the six months to June has dropped 39.8 per cent to Sh711.5 million as higher operating expenses dampened the positive earnings from interest income.
The bank closed the period with operating expenses of Sh3.81 billion, an increase from last year’s Sh2.91 billion, as staff costs increased 19 per cent to Sh1.404 billion.
The company has also booked a loan loss provision expense of Sh299.3 million, a significant increase from the Sh36.97 million registered during a similar period last year.
Family Bank’s total interest income during the period increased 33.7 per cent to Sh6.03 billion, on the back of income from loans and advances which grew by Sh1.7 billion to close the half year at Sh5.36 billion.
Non-interest income dipped marginally to Sh1.31 billion as fees and commissions from loans and advances as well as foreign exchange trading income slowed down.
The company’s total assets as at June was Sh80.2 billion as its focus on small and medium enterprise lending and personal loans resulted in a significant jump in the loan book by 24.7 per cent to Sh57.7 billion.
The bank in December received a Sh1 billion loan from Netherlands-based Oikocredit for on-lending to small and medium businesses, a pointer that its loan book was set to grow further this year.
Family Bank’s half-year total liabilities stood at Sh68.05 billion (representing a seven per cent year-on-year increase) as borrowed funds increased by Sh8.6 billion to Sh11.13 billion.
The lender’s ongoing branch expansion programme was one of the factors that resulted in a jump in property value by Sh1.25 billion to Sh3.8 billion.
