17 August 2009

Kenya: Family Bank Earnings Decline

Nairobi — Family Bank has registered a reduction in its pre-tax profit for the first six months up to June 30th.

According to an unaudited financial report, the bank realised Sh182 million in profit compared to Sh273 million during the same period last year.

This represents a 33 per cent reduction in the bank's earnings for the period. However, the results indicate a dramatic improvement in earnings from March to June. During the period, Family Bank earnings rose from Sh68 million in March to Sh114 million in June.

The financial statement published on Monday was signed by the bank's chairman Titus Muya, director Ngang'a Muchai and the chief executive Peter Kinyanjui.

Family Bank realised Sh531 million in its full year profit up to December 2008. It will, therefore, have to increase its earnings threefold to achieve last year's level of profitability. The bank's results are, however, consistent with the trend, which has seen financial institutions report reduced profits this year.

Staff costs

Family, which has been expanding its branch network saw its operating costs increase to Sh34 million from Sh20 million in the same period last year.

Staff costs also rose to Sh378 million compared to Sh291 million in 2008.

Customer deposits increased to Sh8.6 billion compared to Sh6.4 billion in the same period last year.

Loans and advances rose to Sh8.6 billion compared to Sh5.3 billion in the first half of 2008.

Product range

Gross non-performing loans fell to Sh468 million compared to Sh651 million in same period in 2008.

Family Bank, whose business model is anchored on the small and medium enterprises, started as a building society in 1984 before converting into a bank in 2007 and has been expanding its branch network, ATM out-reach and product range.

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