NAIROBI, Kenya — Family Bank Plc has reported a 62 per cent year-on-year increase in profit after tax to Sh3.70 billion for the first half of 2026, in its maiden financial results since listing on the Nairobi Securities Exchange (NSE) in June.
The lender’s strong performance was driven largely by a sharp increase in net interest income, which rose from Sh6.95 billion in the first half of 2025 to Sh9.78 billion during the period under review.
The results highlight a significant expansion of Family Bank’s balance sheet, with the lender combining growth in customer deposits with increased investment in government securities while keeping the cost of funding broadly contained.
Family Bank’s total assets grew by 24 per cent to Sh238.93 billion, while shareholders’ equity increased to Sh33.22 billion.
Government securities emerge as key growth engine
Although Family Bank has continued to position its MSME-focused Biashara lending business as a major growth area, the first-half balance sheet shows that government securities played a particularly important role in the bank’s earnings performance.
Holdings of government securities increased by 55 per cent to Sh94.10 billion, compared with the previous year.
By comparison, net loans and advances grew by a more moderate 10 per cent to Sh111.06 billion.
The increased allocation to government securities strengthened the bank’s liquidity position, with its liquidity ratio rising from 53.10 per cent to 61.30 per cent.
The bank also increased its use of the interbank market, with balances due to other banks rising by 198 per cent to Sh4.54 billion.
The strategy enabled Family Bank to deploy a larger balance sheet toward relatively lower-risk sovereign assets while benefiting from prevailing government securities yields.
Deposits rise as interest costs remain contained
Customer deposits increased by 20 per cent to Sh180.22 billion, representing an increase of more than Sh30 billion over the period.
Despite the significant growth in deposits, total interest expense remained largely unchanged, rising marginally from Sh4.43 billion to Sh4.55 billion.
The combination of rapidly growing deposits and relatively contained interest costs helped protect the bank’s net interest margins and contributed substantially to the growth in net interest income.
The performance came despite a decline in non-interest income, which fell from Sh2.68 billion to Sh2.30 billion.
Rising non-performing loans remain a concern
The aggressive expansion of the balance sheet comes against a backdrop of continued pressure on asset quality.
Family Bank’s gross non-performing loans increased to Sh18.14 billion, from Sh15.21 billion a year earlier.
The lender responded by increasing loan-loss provisions to Sh998.25 million, up from Sh663.52 million in the first half of 2025.
The rise in provisions indicates that management is strengthening its buffers as credit risks remain elevated, even as the bank directs a larger proportion of its balance sheet toward government securities.
Stronger earnings following NSE listing
The improved profitability translated into higher earnings per share, which increased from Sh1.75 to Sh2.23.
The results are the first reported by Family Bank since its debut on the NSE in June 2026, placing greater focus on the lender’s ability to sustain earnings growth as a listed company.
The bank’s strategy has combined expansion of its deposit base with disciplined funding costs and greater exposure to government securities.
