Family Bank has posted Ksh 1.4 billion pre-tax profits, lifted by higher interest income for the period ending 30th September 2016. Although the profit was a drop from Ksh2.6 billion for the same period last year, the the company has embarked on an aggressive drive to position itself for top tier bank status.
The performance was driven by mainstay lending business with the net interest income providing the biggest leap – from Ksh5.7 8 billion to Ksh7.9 billion. There was a jump in the loan book from Ksh 52.8 billion to Ksh55.8 billion – a Ksh3 billion increase.
The bank also witnessed a surge in customer numbers to nearly two million with impressive results realised on usage of its alternative business channels including mobile and agency banking. Growth in deposits through mobile banking channels more than tripled to Ksh3 billion monthly from Ksh700 million.
Family bank is making considerable investments in its transformation to improve operational efficiency, customer experience, business growth and staff growth and development. Increased provision for doubtful debts, a higher interest expense on deposits and higher operating costs relating to investment in more branches saw a dip in profits despite strong growth.
The management is upbeat that the investment has positioned the bank for future growth.
“We are looking at an organisation that is fit for purpose with technology efficiency to release and realign resources for future business growth,” said the bank’s Chairman, Dr Wilfred Kiboro.
“We are determined to maintain a trajectory of sustainable profit-growth – delivering returns above our cost of capital,” said the bank’s Managing Director, Mr David Thuku. “Therefore the transformation journey that we have started which include Early Retirement Program and other investments in ICT had been factored in our budgets hence the anticipated slight dip in our 2016 profits.”
He said Family Bank is dismantling costly operations with alternative delivery channels like mobile and internet banking primed for long-term growth in demand from mainly SMEs and personal consumers. ” Technology is driving competitive advantage in the banking industry and we are remodeling to ensure we leverage to deliver to our customers in a cost efficient and effective way,” said Mr Thuku.
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