Co-Op Bank Profit Grows to Ksh 10.9B in Nine Months

Cooperative Bank Group has reported a Ksh.10.9 billion profit for the third quarter in 2019 representing a 5.8 percent jump in earnings by the lender to the close of September.

The lender which is the third largest by assets in the region, said the growth was driven by its “soaring eagle” transformative agenda that has retooled and equipped the business with added competitive advantage.

The increased issuance of digital loans which serve to raise income derived from fees and commissions have played a major role in the growth in earnings by the bank. Digital loan issuance on MCo-op Cash is rising ahead of the bank’s traditional loan book to Ksh.27.6 billion as the lender’s non-funded income has surged forward by 33 percent to Ksh.14.1 billion

The group’s total operating income grew by 9% from KSh 32.3 billion to KSh 35.2 billion while its total assets grew 9% to KSh 440.8 billion compared to Ksh 404.2 billion in the same period last year.

Nevertheless, Co-op retained its likeness for the Treasury, a departure from observed exits by peers, to increase its investments in the portfolio by a further 13 percent to Ksh.94.6 billion from Ksh.83.2 billion last year.

In spite of the prolific growth of both net loans and advances to customers and deposits, Co-op’s net interest earnings slightly tumbled. While the lender has grown its neighborhood-based banking agents to 16,000, 90 percent of the bank’s customer transactions already sit outside branches.

As gross non-performing loans (NPLs) rose to Ksh.30 billion from Ksh.29 billion, the lender’s operating expenses picked up by a notable 11 percent on the back of higher loan loss provisions

The bank expects to keep by the diversification tune to strengthen its dominance on its core market segment encompassing retail banking and the cooperative movement.

Co-op Group Managing Director Gideon Muriuki reported that “the group continues to leverage on the benefits of the transformation agenda which has re-tooled and equipped the business with added competitive edge as reflected in the sustained growth in market share across all market segments.”