Mobile lending props bank’s profit

Central Bank of Kenya (CBK) Governor Patrick Njoroge when he addressed the media at his office on Thursday. (Standard)

Family Bank posted a four-fold jump in net profit for the first quarter of this year to Sh160.8 million from Sh35.8 million last year.

The growth was largely driven by an increase in mobile loans in what is now becoming a cash cow for the industry. Income from loans spiked from Sh1.3 billion to Sh1.4 billion while interest expenses declined from Sh610 million to Sh474 million.

“We will continue to invest in our digital channels to deliver an even more enhanced mobile and online banking experience,” said the bank’s chairman Wilfred Kiboro in a statement.

Diamond Trust Bank (DTB), which has recently joined a fray of five banks targeting small businesses under Stawi loans, for its part posted a 9.2 per cent rise in net profits from Sh1.8 billion last year to Sh1.9 billion in the first quarter of this year. This is despite a decline in lending from Sh194 billion to Sh188 billion with money coming mainly from trading in forex which doubled over the period.

The lender also managed the costs of customer deposits which reduced from Sh3.3 billion to Sh3 billion during the period under review. Meanwhile, the Central Bank Governor Patrick Njoroge  yesterday lauded the ongoing mergers of banks in the country.

These include M Bank’s acquisition of Oriental, I&M Bank’s Giro Bank buyout, SBM purchase of Fidelity and later Chase Bank’s assets as well as DTB’s consolidation with Habib Bank and lately NIC Bank’s merger with CBA and KCB Group’s acquisition of National Bank.

“Consolidation is something we are positive about, and we are not done yet. I hope banks continue to look at the trend,” said Dr Njoroge at a press briefing in his office. The governor in response to Parliament’s query into the KCB-National Bank merger said banks are free to merge as long as they follow laid down due legal processes.