Supported by increased lending to customers across all business segments and placements with other banking institutions, Family Bank Group interest income rose by 18.7 per cent to Sh7.3 billion, regardless of interest expense increase by 38.9 per cent to Sh2.8 billion during the same period.
This was mainly driven by the general increase in funding costs for deposits and borrowings in line with the tightening liquidity in the market due to the tight monetary policies by the government.
The increase in the interest income and the higher increase in interest expense saw the net interest income marginally increase by 8.44 per cent as margins contracted.
The Group income diversification is on course as non-funded income, fees and commissions, increase by 6.6 per cent to Sh6.3 billion.
Other operating expenses and staff costs saw an increase of 8.2 per cent and 22.3 per cent. The staff costs were mainly driven by an increase in headcount in addition to the continued investment the bank continues to make in training the employees.
In line with the tough macro-economic conditions, the Group remained prudent and increased the loan loss provisions by 57 per cent during the period.
Additionally, the total assets increased by 6.9 per cent to Sh132.8 billion supported by a 12.0 per cent growth in the loan book which increased to Sh84.7 billion up from Sh75.6 billion in June 2022, while customer deposits grew by 11.1 per cent to Sh100.8 billion.
“Our focus as a Group in the first half of the year has been to support on-ward lending to our customers across diverse sectors of our economy given the tough economic conditions. We have also been shoring up the Group’s liquidity position to ready the Group to take advantage of opportunities when the economic tide turns favorably. We have continued to drive product innovation, digitization, employee engagement and building scalable IT infrastructure in our business. This will indeed position the Group to scale in the future successfully.” Family Bank CEO Rebecca Mbithi said.
Meanwhile, the Bank’s statutory ratios compliance position remained strong with the total capital ratio closing at 18.0 per cent against the minimal requirement of 14.5 per cent, while the liquidity ratio stood at 39.3 per cent against the minimum statutory ratio of 20 per cent.
