Family Bank profit soars to ShSh3.7b as Absa ups dividend amid profit dip

Absa Bank Kenya interim CEO Yusuf Omari during an investor briefing on the bank's 2026 half-year financial results in Nairobi yesterday. [Wilberforce Okwiri, Standard]

Family Bank Group reported a 62 per cent surge in half-year profit after tax on Tuesday, as larger rival Absa Bank Kenya posted a 10 per cent decline in interim earnings but still declared a Sh2.72 billion interim dividend for its shareholders.

Family Bank's profit after tax jumped to Sh3.7 billion for the six months ended June 30, 2026, up from Sh2.2 billion in the same period a year earlier, the tier-two lender said in a statement.

The strong performance was underpinned by robust balance sheet expansion and disciplined cost management, reflecting continued execution of the bank's 2025-2029 strategy, the lender said.

The results come as Family Bank builds on the momentum of its June 2026 listing on the Nairobi Securities Exchange.

Total assets grew 24 per cent to Sh238.9 billion, driven by increased lending to the private sector.

During the period, the bank disbursed Sh35.6 billion to retail and micro, small and medium enterprise (MSME) customers and Sh15.2 billion to commercial customers.

Family Bank CEO Nancy Njau during the release of the lender's 2026 half-year results in Nairobi yesterday. [Wilberforce Okwiri, Standard]

Net interest income rose 41 per cent to Sh9.7 billion, supported by growth in interest income from loans and advances to customers. Customer deposits grew 20 per cent to Sh180.2 billion, supported by the bank's network optimisation strategy as well as continued customer engagements.

Operating expenses increased 11 per cent to Sh7.4 billion, reflecting investments in technology and continued expansion. Family Bank operates 97 branches serving 1.4 million customers, supported by more than 5,000 agents and 118,846 merchant partners.

"Our strong first-half results reflect the resilience of our business, disciplined execution and continued focus on our customers," Family Bank CEO Nancy Njau said at a press briefing in Nairobi.

"We have strengthened the balance sheet, grown the income streams and maintained strong capital and liquidity positions, while continuing to invest in our people, technology and distribution network."

Meanwhile, Absa Bank Kenya, one of the country's largest lenders, said its profit after tax fell to Sh10.5 billion from Sh11.7 billion.

The drop was driven by a seven per cent decline in total income to Sh29.3 billion, with net interest income falling five per cent to Sh21.1 billion as the easing rate cycle compressed margins.

Non-funded income declined 10 per cent to Sh8.2 billion, weighed down by foreign exchange income drops.

"Rates and FX income drop" was the primary driver of the top-line contraction, the bank said in its investor presentation.

Despite the profit decline, Absa Kenya's balance sheet expanded, with customer assets up eight per cent to Sh329.9 billion and customer liabilities rising five per cent to Sh380.7 billion. Total assets grew five per cent to Sh558.1 billion.

Operating costs rose six per cent to Sh12.1 billion, which the bank said was below inflationary levels.

Absa Kenya's gross non-performing loan ratio stood at 10.1 per cent, significantly below the industry average of 14.6 per cent, with coverage strengthened to 69 per cent.

The board approved an interim dividend of 0.5 shillings per ordinary share, translating into a total payout of Sh2.72 billion based on its Sh5.43 billion issued shares.

The dividend is payable on or about October 15, 2026, to shareholders on record as of September 18.

Absa Group Limited recently launched a voluntary tender offer to acquire additional ordinary shares in Absa Bank Kenya, aiming to increase its stake from 68.5 per cent to up to 85 per cent.

The offer closed on August 11, and the bank remains listed on the NSE.

"The offer signals the Group's confidence in the Kenyan franchise and its long-term growth potential," Absa said in its presentation.

Family Bank, by contrast, did not declare an interim dividend, instead focusing on reinvestment to support its expansion strategy following its recent listing.

The tier-two lender's capital and liquidity ratios remained strong and well above regulatory requirements, the bank said.