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Family bank reports 66pc jump in pre-tax profit to Sh2 billion

NEWS
By Jackson Okoth | Nov 10th 2014 | 2 min read
By Jackson Okoth | November 10th 2014
NEWS

Nairobi; Kenya: Family Bank has posted a pre-tax profit of Sh2 billion in the last nine months compared to Sh1.2 billion posted over a similar period last year. This is a 66 per cent growth in profits and is more than what the bank posted in the 2013 financial year.

This growth in profitability has been attributed to a significant jump in net interest income to Sh3.9 billion from Sh3.1 billion due to an expanded loan book, which grew by 28 per cent to Sh36 billion.

"We are leveraging on the universal banking model which aims at gradually positioning the bank as a one stop-shop providing retail and consumer products, SME, agribusiness, corporate banking, trade finance and insurance," said  Family Bank CEO Peter Munyiri.

Rights issue

Family Bank, which aims to play in the top tier space by 2016, is seeking to raise Sh3.5 billion in a rights issue, to raise new capital to fund its expansion, enhance ICT infrastructure and meet new prudential guidelines on capital. Last September, shareholders approved the bank's rights issue in which it would be offering one new share for every nine held to its existing owners.

"We are angling for a larger share of the lucrative SME and corporate lending markets. This cash call will certainly open up more opportunities for the bank by increasing our single borrower limit to over Sh2.75 billion," said Mr Munyiri. The bank has been on a growth momentum by increasing its footprint, product roll out, diversification of the talent pool and huge investment in ICT.

During the last nine months, the bank's customer deposits grew by 26 per cent to Sh43.5 billion from Sh34.6 billion. Shareholders' funds increased to Sh7.2 billion from Sh6 billion pushed up by a surge in retained earnings.

At present, Family Bank has 78 branches following the opening of seven new ones in Kajiado, Bomet, Laptrust, Kasarani, City Hall, Malindi and Ukunda. It has also increased number of agency banking outlets to more than 1,500.

Family Bank converted into a fully-fledged bank in 2007 and hit the Sh1 billion mark in profits for the first time in 2013.

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