Family Bank issues profit warning as Q3 loss widens to Sh743m
Tier three lender Family Bank has issued a profit warning for its full year performance after sinking into further loss in the third quarter.
Family Bank has announced a Sh743.1 million after tax profit for the nine month period ended September, down from a third quarter profit of Sh963 million during a similar period in 2016.
Having already sunk into the loss territory, Family Bank is unlikely to match its Sh352 million full year net profit posted last year.
Family Bank has been undertaking a restructuring program to restore customer confidence after talking a massive dent last year.
Family Bank Managing Director David Thuku attributed the poor performance to a drop in deposits while adjusting to the interest rate cap regime.
“the drop in deposits, the impact of interest rate capping, the slowdown in economic activity due to prolonged electioneering period as well as the prolonged drought earlier in the year had an adverse effect on our performance from the beginning of this year and reduced our revenue levels,” Mr Thuku said.
During the period under review, the bank’s loan book shrunk to Sh44.4 billion which saw interest income drop 43 percent to Sh4.9 billion from Sh8.7 billion in 2016.
Family Bank also saw its nonperforming loans rise from Sh6.4 billion to Sh8.2 billion.
Total operating income was down 34 per cent to Sh4.8 billion from Sh7.3 billion.
Family Bank managed to lower its employee costs to Sh1.6 billion during the period after rationalizing its workforce.
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