Family Bank has posted an 85 per cent increase in its profit before tax for the Group during the first three months of 2020 to Sh 425.6 million, up from Sh 230.01 million registered in quarter 1 of 2019.
Family Bank increased the net loans and advances to customers to Sh 53.0 billion, up from Sh 45.6 billion as at end of March 2019, representing an increase of Sh 7.4 billion. The increase in loans and advances to customers positively impacted the Bank’s bottom-line, with an increase in interest income from loans and advances hitting Sh 1.7 billion during the first quarter of 2020, up from the Sh 1.4 billion that the Bank made during the same period in 2019.
Non-interest income, including increased investment in government securities have also impacted positively in Family Bank’s impressive performance as it stood at Sh 9.4 billion from Sh 7.2 billion in 2019. The Bank earned Sh 309.5 million from government securities, up 68.5% against Sh183.6 million that the bank made during the first three months of 2019.
“We have been able to register profit and grow our customer deposits by 18% to Sh 61 billion in the first quarter of 2020. Our overall growth is attributable to our efforts to support our customers through building strong relationships, providing innovative products and strong partnerships that are aimed at enhancing customer experience,” said Family Bank CEO Rebecca Mbithi. “With the Covid-19 pandemic, we are hopeful that measures put in place by the Central Bank of Kenya to facilitate lending and enhancing liquidity will strengthen the financial sector and in turn promote trade,” she added.
With the automation and digitization of critical processes within the bank, Ms. Mbithi said that the Bank will continue to drive digital transactions to provide convenient banking solutions especially during this pandemic. The Bank has witnessed a migration of over 80% of its transactions to digital.
The Bank’s net interest income expanded 24.8 per cent to Sh1.4 Billion from Sh 1.13 Billion recorded last year. This growth was supported by the increase of loans and advances which grew by 16 per cent. Family Bank is keen on increasing the contribution of non-interest income, after the lender made Sh 714.9 million in total non-interest income during the first quarter, up by Sh 63.1 million when compared to the same period in 2019. Total operating expenses marginally rose by Sh 149.52 million to Sh 1.71 billion, highlighting the cost containment measures being implemented by the bank.
COVID-19 and Outlook
Going forward, the Bank projects that it will wither the tough operating environment characterized by the COVID-19 pandemic to grow its earnings in 2020. The CEO Rebecca Mbithi says Family Bank will continue to focus its cost containment efforts by encouraging the use of alternative banking solutions to meet customers’ needs during this period. Strategic partnerships and customised innovative solutions will continue to drive the Bank’s performance in 2020.
“We are employing necessary safety measures to flatten the curve as a bank. We project that the demand for credit is likely to be affected in quarter two and quarter three due to the negative impact that COVID-19 has had on the economy. Our priorities include digital transformation and automation of critical processes, scaling up of our asset financing business and the focus on customer experience,” said Ms. Mbithi.