Family Bank has posted a profit dip for the nine months to September. The profits fell by half to Sh.963.3 million compared to the Sh.1.86 billion made the previous year.
As a result, the mid-sized lender has announced that its net profit for the 12 months to December will not exceed Sh.1.48 billion.
The bank blamed the looming poor performance on a tough operating environment during the period under review, and one-off retrenchment costs.
The lender saw interest expenses rise to Sh.3.3 billion, up from Sh.2 billion a year earlier in line with the rise in cost of funds fuelled by the recent banking crisis that hit small and middle level bank.
“The collapse of a tier two bank earlier in the year led to a shift in deposits to tier one banks and a struggle for deposits meant costs went up the roof. However our liquidity ratio remains above the 20 per cent as required by the Central Bank of Kenya (CBK) despite the effect of the deposit flight,” Family Bank CEO David Thuku explained.
The bank, which says it has grown clients from 800,000 to almost two million in seven years, saw deposits drop by 15 per cent from Sh.62.7 billion to Sh.53.5 billion for the nine months to November, while its loan portfolio shrunk marginally from Sh.55.9 billion to Sh.55.8 billion.
