alexa Family Bank profit up 33pc on high lending - Daily Nation

Family Bank profit up 33pc on high lending

Tuesday November 17 2015

A Family Bank outlet in Nairobi. The bank has opened its 87th branch in Maua town being the third in Meru County after two others in Meru and Nkubu. FILE PHOTO | EVANS HABIL | NATION MEDIA GROUP

A Family Bank outlet in Nairobi. The bank has opened its 87th branch in Maua town being the third in Meru County after two others in Meru and Nkubu. FILE PHOTO | EVANS HABIL | NATION MEDIA GROUP 

OTIATO GUGUYU
By OTIATO GUGUYU
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Family Bank has reported a Sh2.6 billion profit before tax for nine months to September boosted by increased lending.

The bank’s focus on small and medium enterprise lending and personal loans has seen a significant jump in its loan book from Sh37.9 billion to Sh52.8 billion.

According to Family Bank, the 32.8 per cent jump in earnings from a similar period last year was also supported by aggressive deposits growth and higher transaction income.

“The growth was buoyed by a significant jump in net interest income to slightly over Sh5 billion from Sh3.9 billion as a result of an expanded loan book which grew by 39 per cent,” Family Bank said in a statement yesterday.

The bank is seeking to raise Sh15 billion capital from local and international investors to become a top tier bank.

Recently, it raised Sh2 billion through a bond issue from the local market, and it is already trading at the Nairobi Securities Exchange.

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The bank’s first tranche of its Sh10 billion bond issue was out to raise Sh4 billion but its management was upbeat of an oversubscription that it was prepared to accept Sh2 billion more through the greenshoe option.

It has now capped the local bond to Sh2 billion and will raise another Sh2 billion from dollar investors.

“Our key drivers have been the sustainable growth in our loan book, increase in revenues from alternative business channels including Internet and mobile banking.

“We are also investing in other areas of higher growth potential,” said Family Bank Managing Director Peter Munyiri.

Customer deposits grew by 35 per cent to Sh63.5 billion from Sh47.2 billion as at December 2014.

Shareholders’ funds increased to Sh11.7 billion from Sh10.6 billion due to a rise in retained earnings.

The bank, which has 87 branches, plans to expand its network with four new outlets in Wote, Maua, Kahawa Sukari and Mlolongo from next week.