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Interest buoys Family Bank Q3 net profit

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Family Bank Chief Executive Officer Rebecca Mbithi addressing the bank's investor briefing at the Sarova Stanley on November 25, 2019. PHOTO | DIANA NGILA | NMG

Family Bank’s after-tax profit has jumped 64.4 per cent for the nine months to September driven by strong earnings from interest income.

The lender’s net earnings for the period grew to Sh1.74 billion up from Sh1.05 billion last year buoyed by a significant increase in interest income from loans.

The bank netted Sh6.19 billion interest from loans and advances up from Sh5.36 billion last year on increased loan disbursements and repayments.

Performance was also supported by a fall in loan loss provisioning, which declined to Sh811 million from Sh866 million following improvement in the business environment after Covid-19 advent last year. Gross non-performing loans, however, rose to Sh10.8 billion from Sh9.2 billion indicating borrowers are still struggling to recover from Covid.

At the same time, customer deposits increased to Sh81.9 billion from Sh69.6 billion last year.

Family Bank in June raised Sh4.42 billion against a Sh3 billion target in its bond issuance that has a maturity of 5.5 years.

The lender plans to use the money to expand its presence across the counties as it gears up for tier-I status in the next three years and also boosts its IT infrastructure to handle increased digital lending.

The bank has indicated plans to increase its branch network from the current 92 outlets in 37 counties. From running one branch in 1985, the lender has grown over time and in addition to the 92 branches has over 4,000 bank agents and about 10,000 merchants countrywide.