Lender Family Bank has posted Sh732.4 million profit in the quarter ending March as earnings remain relatively unchanged on higher costs.
The quarterly earnings are marginally down by 0.1 per cent from Sh733.1 million after interest costs and other operating expenses jumped by 43.8 and 16 per cent respectively in the three-month period.
Family Bank has marked a 9.9 per cent growth in total operating income to Sh3 billion from Sh2.8 billion with non-interest revenue rising by 39.2 per cent to Sh995.8 million from higher forex trading income.
Net interest income was flat at Sh2 billion in the quarter on higher interest expenses indicating Family Bank paid more to hold customer deposits in the period.
The bank’s customer deposits rose by 3.7 per cent to Sh92.8 billion from Sh89.4 billion at the same time last year.
Family Bank’s loan loss provisions costs, however, bucked the trend of rising costs to fall by 10.5 per cent in the period to Sh162.5 million even as the bank’s gross non-performing loans rose by 15.6 per cent to Sh13.3 billion from Sh11.5 billion.
Family Bank recorded a 7.9 per cent balance sheet expansion in three months to Sh131.9 billion with the lender’s loan book expanding by 2.9 per cent to Sh83.8 billion.
The bank, however, trimmed its holdings in government securities to align with other top banks who have since been refining their portfolios towards increased customer lending.
The bank’s exposure to government securities reduced by 2.3 per cent to Sh11.3 billion.
Family Bank chief executive Rebecca Mbithi termed the operating environment in the first quarter as tough but expects the bank’s strong funding base to help it see through the challenges.
“The operating environment has been tough but the bank’s capital position and continued prudent risk management practices will see the Group ride the storm and continue taking advantage of the bankable opportunities in the market,” she said.
Family Bank increased investments in modernising its technology platforms, talent and processes and expects the capital expenditure to pay off in the next 12 months
The lender remains well-funded with a core capital base of Sh13.3 billion and a liquidity ratio of 36.2 per cent.