Family Bank shareholders will receive dividends for the first time in five years after net profit for last year jumped 3.9 times to Sh949.8 million, driven by increased income and muted costs.
The growth in profit was from Sh244.2 million posted the previous year, marking a strong recovery for the lender that had posted Sh1 billion loss in 2017.
Net interest income increased by 15.3 percent to Sh5 billion supported by aggressive lending that led to 14.7 percent growth in loan book to Sh50.6 billion.
The lender’s non-interest income, mainly from fees and commissions on loans, grew by 12.1 percent to Sh2.8 billion.
“Our mobile application, PesaPap and our other digital payment platforms such as internet banking have been pivotal in the growth of the non-funded income contributing to 66 per cent of the total non-funded income,” said CEO Rebecca Mbithi.
Profitability was further helped by Sh22 million drop in operating expenses to Sh6.38 billion.
The lender cut provision for non-performing loans NPLs) by 4.8 percent to Sh734 million as gross NPLs rose by 1.3 percent to Sh8.24 billion.
The strong performance saw the board recommend payment of Sh0.24 dividend per ordinary share, which will be paid later in the year. This will be in the region of Sh308.9 million, going by the lender’s ordinary shares.
This is the first time since 2015 for shareholders to get dividends. The payout for 2015 was Sh0.50 totalling Sh622.59 million.
In 2013, the bank paid dividends of Sh222.8 million, in addition to issuing one–for–one bonus shares.
The bank last posted a net profit above Sh1 billion in 2015 (Sh1.98 billion) before dropping to Sh352.2 million in 2016 and a Sh1 billion loss in 2017.