Zachary Ochuodho @zachuodho
The board of directors of the Co-operative Bank has approved Sh200 million as part of its shareholding capital into the Kenya Mortgage Refinance Company (KMRC) – created recently to assist the government realise its affordable housing agenda.
“Whereas the Treasury has kicked off the initiative of the KMRC to source for long-term financing to fund the provision of affordable housing to the majority of Kenyans as envisaged in the Big Four agenda item, the bank and saccos, that predominantly own the bank, expect to be key partners with the government and will play a critical role on this key economic agenda,” said Co-op Bank chief executive and managing director Gideon Muriuki Muriuki who was speaking during the release of the group’s half-year results.
According to the group’s first half (H1) of the year financial report, it posted a seven per cent rise in after-tax profit of Sh7.1 billion compared to Sh6.6 billion recorded in a similar period in 2017.
The CEO attributed the good performance of the group to the bold “Soaring Eagle” transformation model – which aimed at creating operating efficiencies, sales force effectiveness and innovative customer delivery platforms.
Muriuki said interest income from government securities and interest income from loans and advances contributed to the improvement of the total income from Sh19.25 billion recorded in H1 of 2017 compared to Sh20.8 billion posted in H1 2018.
During the six months, the group’s total interest expense increased marginally by 2.2 per cent from Sh5.84 billion to Sh5.97 billion due to a 4.5 per cent growth in deposits. However, the total operating income grew by 6.3 per cent from Sh20.5 billion in H1 2017 to Sh21.8 billion in H1 of this year.
Muriuki said through its multi-channel strategy, the bank has successfully moved 87 per cent of all customer transactions to alternative delivery channels that include self-service kiosks in 155 branches.
KMRC has been established by the government to source for long-term funding at attractive rates while ensuring sound lending habits amongst private mortgage lenders resulting in greater availability of fixed-rate mortgages and longer available loan terms.