Family Bank Limited, a Tier II lender owned by the Titus Muya Family, recorded a 55.4% increase in net profit to KSh 5.38 billion at the close of financial year ended 31st December 2025. This is Family Bank prepares to list at the Nairobi Securities Exchange later this year.
The lender’s Total Operating Income rose 34.1% to KSh 20.18 billion while net interest income increased by 46.1% to KSh 15.63 billion.
Interest expense was down 7.8% to KSh 8.85 billion while Loan Loss provisions went up 174% to KSh 1.97 billion.
An increase in Net Interest Income and a decline in Interest Expense signals improved cost of funds, stronger lending margins and that Family Bank’s Core banking engine is efficient and expanding profitability.
Family Bank Balance Sheet size grew 23.5% to KSh 208.69 billion as the lender prepares to list at the Nairobi Securities Exchange this year. The lender’s borrowings shot up significantly ahead of its entry into the Nairobi bourse, rising 85.7% to KSh 13.91 billion.
While the banking sector is operating under a tough credit environment, Family Bank managed to raise Customer Deposit levels by 20.1% to KSh 151.88 billion.
Family Bank records a spike in non-performing loans
Although the lender posted a 174.9% increase in loan loss provisions, its net profit grew 55.4% an indication of strong underlying income strength and ability of Family Bank to absorb credit risk shocks.
The lender is also on an aggressive balance sheet expansion with assets growing at 23.5%, loan book at 14.0% and Customer Deposits at 20.1%. Therefore, Family Bank’s growth is fundamentally supported by deposits, not just lending, suggesting a stable funding base.
Figures from Family Bank financial statements show a sharp rise in amounts of Borrowed Funds, an increase of 85.7%. This implies that the lender is leveraging external funding to accelerate growth. This strategy could introduce higher financial leverage and potential cost pressures if rates shift.
The lender is also experiencing higher gross non-performing loans, leading to higher loan loss provisions, thus affecting the quality of its assets.
Family Bank results can be viewed within the broader environment of high interest rates dynamics and increasing credit risk across the market. Banks are therefore optimizing margins while managing defaults.
While the lender is on an aggressive expansion mode, its runs the risk of rising NPLs, increased reliance on borrowings and higher provisioning pressure under the prevailing tightening risk environment.
Family Bank was established in 1984 as Family Bank Building Society with just one branch. It has since grown and became a fully-fledged commercial bank in May 2007. The Bank has 95 branches in 32 counties across Kenya. As of December 2023, it was the fourth-largest Bank in Kenya in terms of geographical reach.
Family Bank has a strong retail customer base, focuses on SME banking with over 1.2 million customers, 6,000 bank agents and 75,000 merchants across Kenya.
The Bank is renowned for its digital innovation, being the first to introduce paperless banking through smart card technology. This allows customers to transact without filling in deposit or withdrawal slips. Family Bank is also a pioneer in mobile banking with its PesaPap mobile app, which is unparalleled in the market.
Family Bank provides retail and consumer products, SME, agribusiness, corporate banking, trade finance, and insurance products. In line with its county banking roadmap, the Bank is leveraging the country’s devolved governance system to attract more customers.
This strategy aims to utilise the opportunities the devolved governance structure offers, positioning Family Bank as a one-stop-shop for all banking needs. The Bank has won many prestigious awards including the Fastest Growing Bank based on Financials in 2015, Best Bank in Micro-Finance, 1st Runner-up in the Think Business Magazine Awards in 2013 & 2014 and recognized as the Best Farmers Bank in Kiambu and Laikipia counties. The Bank emerged the 2nd best financial services provider in Kitui County during the Kitui Agricultural Trade Fair.
The Bank was also recognized by VISA International for having the ‘Best VISA Marketing/VISA Brand Awareness” Campaign with the catchy tagline – “The way to pay everyday” – for its EMV Visa Card.
The 83-year old Titus Muya, founder of the Bank and his household are expected to make a fortune when this business becomes public and is listed at the Nairobi bourse.
ALSO READ:
Leave a comment