Wednesday, August 14, 2013

Family Bank profit increases by 137pc

PHOTO | FILE Customers queue for service at Family Bank on Kenyatta Avenue, Nairobi. Central Bank has lowered its benchmark lending rate to encourage banks to reduce their interest rates.

Customers queue for service at Family Bank on Kenyatta Avenue, Nairobi. Family Bank has posted a 137 per cent increase in profit after tax in the six months to June due to increased lending and use of technology. Photo/FILE  NATION MEDIA GROUP

By MWANIKI WAHOME jwahome@ke.nationmedia.com

Family Bank has posted a 137 per cent increase in profit after tax in the six months to June due to increased lending and use of technology.

The bank recorded Sh487.9 million profit, up from Sh206 million recorded in the same period in 2012. It reported growth in most of the key parameters, especially the loan book.

“Our investment in technology in 2010 has also paid off with better efficiency in service delivery and the introduction of technology-hinged products are resulting in growth of overall bank’s revenue,” said Family Bank managing director Mr Peter Munyiri yesterday during an investor briefing in Nairobi.

The bank urged the government to open up its banking business to allow competition.

Don’t discriminate

Speaking at the function, Family Bank chairman Mr Wilfred Kiboro said the government should not discriminate when choosing the banks for “financial intermediation”.

“The government should let banks compete for deposits from quasi-government institutions like parastatals. We cannot be talking of a liberalised market and put restrictions on the other hand,” he said. “When there are restrictions, Family Bank is only left to borrow from open market at high interest rates.”

Mr Munyiri supported the appeal saying this would create a level playing field.

The banks’s total assets grew by 13 per cent from Sh31 billion in December 2012, to stand at Sh35 billion in June 2013.

Its net interest income increased by 51 per cent from Sh1.37 billion to Sh2.07 billion while the total shareholders’ funds grew by 8 per cent from Sh4.9 billion in December to Sh5.2 billion in June 2013. Deposits grew by 15 per cent from Sh24.6 billion in December to Sh28.4 billion in June.

while the loans grew by 16 per cent from Sh19.8 billion in December 2012 to Sh 23 billion in June.

The bank’s mortgage product, “Growing Homes”, he added, had also shown signs of growth since its was initiated.

He said the bank was transforming into a pan-African bank and now has key partners like Kenya Tea Development Authority, Pan Africa Insurance, LapTrust among others.

Munyiri said the bank had strategically invested in structures, banking technologies as well as partnerships to grow its foot print across the country and portfolio of corporate and institutional clients.

It has been improving its mortgage segment and trading in treasury products while strengthening its retail banking.