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Expansion drive eats into Mayfair Bank half year earnings

Peter Kenneth
The lender’s fortunes declined after non-interest income fell sharply from Sh129 million last year to Sh46 million in the six months to June 2019. FILE PHOTO | NMG 

Mayfair Bank, a lender linked to politician Peter Kenneth, sunk further into the red over the six months to June this year, posting a net loss of Sh161 million from a loss of Sh76 million in a similar period last year.

The lender’s fortunes declined after non-interest income fell sharply from Sh129 million last year to Sh46 million in the six months to June 2019.

The sector’s youngest bank which completed its second full year of operations this month, blamed the loss partly on investments in additional branches in Eldoret and Industrial Area Nairobi as well as pre-establishment expenses.

The bank has five branches so far, including Nyali at the coast, Westlands and Upper Hill in Nairobi.

An additional branch is scheduled to be launched this year in the Mombasa CBD as part of the lender’s plan to steadily expand its corporate footprint in Kenya.

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The bank focused on growing its loan book and deposit base as interest income nearly doubled from June 2018’s Sh144 million to Sh270 million in June 2019, while no default was recorded.

“The lending book rose from Sh1.26 billion in June, 2018, to Sh4.3 billion as at June 2019, a remarkable 247per cent growth.

The bank had zero non-performing loans in its lending book during the same period,” Mayfair said in a notice.

It grew customer deposits from Sh3.11 billion in June 2018 to Sh6.07 billion in June, 2019, a 95 percent growth.

This came with a cost on interest expense that grew from Sh95 million to Sh195 million.

Mayfair said its shareholders made a Sh411.25 million capital injection between June, 2018 and June 2019 into the bank’s operations, raising paid up capital from Sh1.82 billion in June 2018 to Sh2.23 billion in June 2019.

Although at 40 percent, liquidity remained elevated above CBK’s threshold of 20 percent. It was a decline from 82 percent liquidity position last year.

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