Family Bank has posted a 22.39 per cent rise in net profit despite coronavirus-related disruptions that have hit borrowers resulting in an increase in loan repayments in the banking industry.
The mid-tier lender’s after-tax profit for the full-year to December 2020 was Sh1.16 billion up from Sh949.84 million a year earlier on account of increased interest earnings.
Net interest income grew by more than a quarter to Sh6.43 billion, representing a 28.41 per cent growth for the lender whose shares are traded over-the-counter at the Nairobi Securities Exchange.
The loan book expanded 11.83 per cent to Sh56.58 billion, which had a positive impact on its earnings.
“We continued to support our customers who saw new opportunities despite the Covid-19 pandemic. This support was in diverse sectors such as manufacturing, agribusiness, trade, logistics and technology,” Family Bank chief executive Rebecca Mbithi said in a statement on Tuesday.
Loan loss provisions surged by more than 2.5 times to Sh1.62 billion from Sh734 million in 2019.
The bank’s operating expenses grew 20.23 per cent to Sh7.67 billion driven by the increase in the cover for loan defaults.
Family Bank board did not recommend dividend for 2020. Shareholders received their first dividends in five years of Sh0.24 per share for 2019.
The country’s tier-one banks have all reported a slide in profit, largely on the back of loan defaults by borrowers.