By Catherine Muema
In summary:
- Bank recorded a sh 748 million loss for the first nine months of 2017
- Bank’s liquidity ratio increased by 8.9 per cent compared to a similar period last year to stand 33.2 per cent in the year in review. This is 13.2 percent above the Central Bank of Kenya statutory requirement.
- Family bank’s net non-performing loans increased by Sh1.2 billion largely due to the slowdown in economic activities during the prolonged electioneering period and raise of the Bank’s provisions for non-performing loans.
- Total net interest income dropped by 46.2 per cent for Q3’2017 compared to the net interest income received during the same quarter under review.
A steady growth in both customer deposits and income from increased lending in the three months of Q3 has seen Family Bank strengthen its stability despite recording a Sh748 million loss for the first nine months of 2017.
The Bank’s liquidity ratio increased by 8.9 per cent compared to a similar period last year to stand 33.2 per cent in the year in review. This is 13.2 percent above the Central Bank of Kenya statutory requirement. The Bank’s total capital stands at Sh11.87 billion as at the end of Q3’ 2017 while investments in government securities held to maturity went up by 67.6 per cent to Sh9.37 billion compared to Sh5.59 billion in Q3’2016 financial results.
“We are banking on a multi-channel approach for the Bank through the adoption of digital transformation in banking. We have seen a significant growth of our deposit levels by Sh7 billion this year and the adoption of alternative channels improve to 60%,” said Family Bank MD & CEO Dr. Thuku. “The impact of improving our customer’s digital experience has, in turn, registered profit margins for the Bank from the month of September 2017, and the rest of the year looks promising,” he assured.
However, net non-performing loans increased by Sh1.2 billion largely due to the slowdown in economic activities during the prolonged electioneering period and raise of the Bank’s provisions for non-performing loans. Total net interest income dropped by 46.2 per cent for Q3’2017 compared to the net interest income received during the same quarter under review. The decline in the net interest income is as a result of the effects of the interest rate cap law coupled with reduced lending growth and the effort undertaken by the Bank to strengthen our liquidity. Staff costs also decreased to Sh 1.6 billion compared to Sh 2 billion recorded in Q3’2016.
“We are confident of our transformation journey and remain confident that these sustainable structures and processes will yield long-term and sustainable benefits for the business. We have identified and continue to implement minimal cost-cutting measures to further enhance efficiency,” added Dr. David Thuku.
