NAIROBI, Kenya, Mar 29 – Family Bank has posted Sh664 million pretax profit for 2016 despite a tough environment in the financial sector.
This is, however, a decline from the previous Sh2.9 billion the bank posted in 2015, a drop the bank attributes to a one-off staff restructuring exercise that cost the bank Sh400 million as well as a slowdown in the loan book.
Net interest income grew as a result of improved asset yields
The drop in noninterest income by 19 percent was primarily due to the reduced lending as the loan book went down by 10 percent.
Deposits went down by 60 percent to Sh11 billion from Sh28.7 billion while nonperforming loans in the period under review doubled in the year due to slower economic activity in key sectors of the economy.
“We did take a hit on our bottom-line arising out of the turbulence we faced last year. The sustained social media attacks which led to significant withdrawals took a further toll on our profitability. However, I can confidently say that we are recovering from the reversals of the past year, thanks to the great confidence and support from our customers,” said Family Bank Managing Director David Thuku.
Forex trading and other income also dropped by 21 percent on the back of tighter liquidity and slower business volume growth.
Thuku added that the Bank is implementing its biggest transformation program whose key pillars are efficient operations, improved customer service levels and having an empowered staff base able to drive growth that is geared towards the top Bank status.
The Bank is fortifying its value proposition through the alternative business channels like mobile banking, online banking, agency banking, among others.