Family Bank a became the latest bank to release its full year results and following a now established trend, they announced a decline in profits. Their profits declined by a massive 83% to Ksh. 331 Million down from Ksh. 1.9 Billion in 2015.
The bank’s total operating income experienced a 2% decline to Ksh. 9 Billion. This was occasioned by a 18.3% decline in the non-interest income to Ksh. 2.3 Billion. Interest income from loans and advances on the other hand grew by 7.8% to Ksh. 10.8 Billion. Surprisingly income from government securities fell by 16.5% to Ksh. 657 Million at a time when other banks were stocking up on these securities.
In the period the bank’s operating expenses experienced a 32% increase to Ksh.8.3 Billion. This in large part due to a 301% increase in the loan loss provision to Ksh. 847 Million this was caused by an increase in the non-performing loans by 99.6% to Ksh. 7 Billion. The bank also incurred a one-off cost of Ksh. 380 Million to lay off 250 employees.
Customer deposits fell by 33.9% to Ksh. 41 Billion this led to a drop in the liquidity ratio to 14.4% down from 30.8 % in 2015. The Managing Director David Thuku attributed this to social media attacks which led to significant withdrawals. This could be the reason why the bank liquidated its government securities which fell from Ksh. 7 Billion in 2015 to Ksh. 4.7 Billion in a bid to increase liquidity after the decline in deposits.
No dividends were declared.