Family Bank’s net profit rose 61.8 percent to Sh3.7 billion in the half-year ended June 2026, supported by a faster growth in income from lending compared with operating costs.

The rise in net earnings from Sh2.28 billion posted in the preceding similar period was fuelled by a 40.7 percent growth in net interest income to Sh9.79 billion, up from Sh6.95 billion.

The lender increased its lending, issuing Sh48.8 billion in new loans over the six months. About Sh35.6 billion went to retail and micro, small and medium-sized enterprises (MSMEs), while commercial customers took up Sh15.2 billion.

“These numbers are as a result of commitment, collaboration, strategic clarity, disciplined execution of our strategy and the support received from various stakeholders,” Nancy Njau, the chief executive officer of Family Bank said.

Despite the Sh48.8 billion in new loans, the review period showed the loan book grew by Sh10.1 billion to Sh111.06 billion. Family Bank chief finance officer Paul Ngaragari explained that the variance is due to the short-term loans of MSMEs whose maturity came before the end of the review period.

“We are an MSME-focused business entity, and for small businesses, most of the loans are short-term, meaning they take a loan and repay within a period of three months or less,” said Mr Ngaragari.

“That is why the absolute growth in the loan book is by about Sh11 billion against close to Sh50 billion in new loans. MSMEs’ financial needs are largely short-term, but the volumes are quite high.”

During the review period, non-interest income fell 14.2 percent to Sh2.3 billion. Operating expenses rose 10.6 percent to Sh7.42 billion from Sh6.7 billion as the lender bucked the sector trend with a 50.5 percent rise in provisioning for loan defaults to Sh998.25 million from Sh663.5 million.

The increased provisioning for loan defaults came in the period gross non-performing loans hit Sh18.14 billion from Sh15.22 billion.

The lender said several borrowers who fell into default due to Covid-19 disruptions were yet to normalise repayments, thereby contributing to the stock of NPLs that drove the NPL ratio to 14.9 percent from 13.7 percent.

“Our interest is not just to report good numbers. Our interest is also to protect the asset that we are entrusted with by our shareholders and the economy at large. We are very deliberate in ensuring that the required accounting standards are followed,” said Mr Ngaragari.

The lender, which started in 1984 and converted into a fully-fledged commercial bank in 2007, listed on the Nairobi Securities Exchange on June 23, 2026, at Sh18.

The share hit Sh50 on the debut day on the bourse and now trades above Sh33, giving investors a gain of over 83 percent.

In the year ended December 2025, Family Bank increased its dividend per share payout to Sh1.20 from Sh0.85 following a 55.4 percent jump in net profit to Sh5.37 billion.

palushula@ke.nationmedia.com