Family Bank’s board is proposing to pay Sh798 million dividend despite the net profit for the year ended December 2022 dropping by 4.1 percent to Sh2.21 billion on increased costs.
The lender said it would pay a first and final dividend of Sh0.62 per share, a cut from the previous year, where dividends totalled Sh1.1 billion or Sh0.83 per share.
This will mark the second year running for the lender to pay dividends after the Covid-19 pandemic. Family Bank investors were in 2020 given a bonus share of one for every three held, citing the need to preserve cash during the coronavirus disruptions.
“The directors of Family Bank Limited have recommended a payment of the first and final dividend of Sh0.62 per share for the year ended December 2022,” said the bank.
Family Bank’s profit drop from the previous year’s Sh2.31 billion was despite the growth in both interest and non-interest income.
Net interest income grew from Sh7.76 billion to Sh8.59 billion, while non-interest income hit Sh3.35 billion from Sh3.03 billion.
However, operating expenses rose by 9.9 percent from Sh7.5 billion to Sh8.2 billion, mainly on increased staff costs.
Family Bank’s tax expense also increased by 48.5 percent from Sh1.03 billion to Sh1.53 billion, further putting brakes on the lender’s profits.
The lender cut provision for non-performing loans (NPLs) from Sh768 million to Sh495 million as gross NPLs rose from Sh11.05 billion to Sh12.43 billion.
From running one branch in 1985, the bank has grown to over 90 branches since it became a fully-fledged commercial bank in May 2007.