BusinessPeople Daily

Co-op Bank’s first quarter profit jumps to Sh3.4b

Steve Umidha @steveumidha

Co-operative Bank of Kenya has reported a 6.25 per cent profit jump in its net earnings for the first three months to March 2018, on increased lending. The bank’s profit after tax stood at Sh3.4 billion for the quarter from Sh3.2 billion it announced in the same period last year.

It attributed the performance to a “gradual economic recovery” from a tough operating environment witnessed last year. “This is a very commendable performance as the operating environment gradually recovers from the significant headwinds that business had to contend with in year 2017,” said Bank’s chief executive officer Gideon Muriuki in a statement.

The bank closed the quarter with a good capital base, with adjusted total capital against total risk-weighted assets standing at 17.3 per cent, which is 2.8 per cent above the statutory minimum of 14.5 per cent,” it said.

Co-op Bank also attributed its improved growth on multi-channel strategy which saw it successfully move 87 per cent of all its customer transactions to alternative delivery channels.

The channels include self-service kiosks in 153 branches, an expanded 24-hour contact centee, mobile banking, 580 ATMs, internet and more than 9,000 Co-op Kwa Jirani banking agents.

During the period under review the bank’s total interest income grew by nine per cent from Sh9.5 billion to Sh10.4 billion boosted by interest income from government securities which doubled by 13.4 per cent from Sh1.76 billion to Sh2 billion.

The lender’s total operating income grew by 8.4 per cent from Sh10 billion to Sh10.9 billion while deposits grew by 6.5 per cent from Sh281.6 billion to Sh299.9 billion, despite a tough period for most banks last year owing to protracted elections.

The bank’s growth was also reflected on its subsidiary in South Sudan, which has a joint venture partnership with the government of South Sudan, that recorded a profit before tax of Sh32.4 million during the quarter compared to a loss of Sh34.7 million in a similar period last year.

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