Family Bank posts Sh743m after-tax loss in third quarter

[MegaKing]

Should depositors panic?

Family Bank slipped into the red in the nine months to September, weighed down by lower interest income and reduced lending in the wake of introduction of the rate cap regime.

The mid-sized lender Wednesday posted a loss of Sh743 million compared to a net profit of Sh963 million during a similar period last year.

Net interest earnings went down by 46 per cent to Sh2.94 billion in 2017 in the nine months through September from Sh5.47 billion last year.
Family Bank’s total interest income contracted by 43 per cent to Sh4.98 billion from Sh8.78 billion, underlining the extent to which the new regime putting a ceiling on lending rates had pushed its earnings.
Last year, Parliament passed a law restricting the lending rate to four percentage points above the prevailing base rate, also called Central Bank Rate.

 

[aristide]

Net interest earnings went down by 46 per cent to Sh2.94 billion in 2017 in the nine months through September from Sh5.47 billion last year

Also known as kupelekwa kama fala.

 

[Baby Daddy]

posted a loss of Sh743 million compared to a net profit of Sh963 million during a similar period last year.

That's what you get when you keep recycling the likes of Kiboro.

 

[LeoK]

Eti?

 

[marine1]

banks must learn to respect the depositor.u deposit money interest free but unakopa at almost 15per cent!!!respect has to be two ways ,just like insurance companies

 

[kah tony]

If more than half of the year has been on elections and campaigns where do you expect profits to come from? Mana does not from heaven. Economic activities make profit and not politics.


Don' blame interest rate capping.

 

[kah tony]

banks must learn to respect the depositor.u deposit money interest free but unakopa at almost 15per cent!!!respect has to be two ways ,just like insurance companies

Credit Risk in Kenya is why they charge that 10%+ premium for lending money. They would rather lend to GOK at cheaper rates than mwananchi.

 

[marine1]

Credit Risk in Kenya is why they charge that 10%+ premium for lending money. They would rather lend to GOK at cheaper rates than mwananchi.

thats rubbish if thats their reasoning,is credit risk higher than death risk/life insurance?already with citizens able to invest on tbills direct wataona moto.they already calling out for more deposits.

 

[Quanstrom]

That rate caps law squeezed banks where it hurt most. Interest income. No accounting gymnastics can save them. Only large well capitalized banks I.e KCB, Equity and Co-op will have an easy time in the short run. In the fullness of time, banks will figure out how to raise their non-interest incomes, and focus on subsidiaries where interest rate caps don't apply.

 

[Abba]

Credit Risk in Kenya is why they charge that 10%+ premium for lending money. They would rather lend to GOK at cheaper rates than mwananchi.

if that's the case then why are they posting that huge loss ?if the bank has a net capital assets of 30b, why cant they give it to government the cash at a rate of 10% and will earn them 3 billion profit p.a. This will counter this loss they have made. Some little bird is telling me something is stinking in this bank. Something is stinking. Either people are lowering their profit to evade paying taxes or its one of those banks that will follow Chase bank route. With kenyan banks there is something always cooking in the books. Sidian bank is the next one.

 

[marine1]

if that's the case then why are they posting that huge loss ?if the bank has a net capital assets of 30b, why cant they give it to government the cash at a rate of 10% and will earn them 3 billion profit p.a. This will counter this loss they have made. Some little bird is telling me something is stinking in this bank. Something is stinking. Either people are lowering their profit to evade paying taxes or its one of those banks that will follow Chase bank route. With kenyan banks there is something always cooking in the books. Sidian bank is the next one.

i concur,they used to make alot of money through auctioning illegally clients properties but now imefika mwisho and theyre stuck.

 

[Quanstrom]

if that's the case then why are they posting that huge loss ?if the bank has a net capital assets of 30b, why cant they give it to government the cash at a rate of 10% and will earn them 3 billion profit p.a. This will counter this loss they have made. Some little bird is telling me something is stinking in this bank. Something is stinking. Either people are lowering their profit to evade paying taxes or its one of those banks that will follow Chase bank route. With kenyan banks there is something always cooking in the books. Sidian bank is the next one.

In this era when information flows seamlessly, if that was the case, Family Bank would already have experienced a bank run.

 

[Abba]

i concur,they used to make alot of money through auctioning illegally clients properties but now imefika mwisho and theyre stuck.

i got some money there. Let me start the process .

 

[Quanstrom]

Interest rate caps and the expected IFRS 9 will see banks bleed a little bit more. Banking stocks are not the best places to pack your cash, especially small banks.

 

[Abba]

Interest rate caps and the expected IFRS 9 will see banks bleed a little bit more. Banking stocks are not the best places to pack your cash, especially small banks.

We really love examples .

 

[Quanstrom]

We really love examples .

NBK, HFCK etc. You can gamble with those that have Pan African presence. Think continental, not local

 

[kah tony]

thats rubbish if thats their reasoning,is credit risk higher than death risk/life insurance?already with citizens able to invest on tbills direct wataona moto.they already calling out for more deposits.

Mortality risk has no correlation to credit risk if that is how you're reasoning. You cannot equate one to the other either. Just take the news as it is.

 

[Ubongo]

Interest rates will be revisted in January

 

[marine1]

Interest rates will be revisted in January

cbk lending rate remained at 10%

 

[omhangla]

Nyakundi has had extensive coverage of this bank but since many people don't like him, they don't read what he writes, which in most cases are facts, albeit with matusi here and there