Co-op Bank registers 15pc jump in first half profit, eyes expansion

Co-operative Bank CEO Gideon Muriuki says the bank plans to expand into Ethiopia and Uganda after a rise in pre-tax profit for six months to June 30, 2014.

Co-operative Bank Group has announced a 15.2 per cent growth in pre-tax profit for the six months to June 30, 2014 and disclosed plans to venture into the Ethiopian and Ugandan markets.

The bank, which already has presence in Southern Sudan, raked in a pre-tax profit of Sh6.76 billion compared to Sh5.87 billion in a similar period last year.

The improved profitability, according to the management, was driven by a huge leap in transaction-based income, prudent cost management and a relatively stable macroeconomic environment during the period under review.

"Our South Sudan Subsidiary which started operations in September 2013 is on the verge of breaking even and contribute positively to our profitability from this year. Uganda and Ethiopia remain our new frontiers," Group Chief Executive Gideon Muriuki said.

The country's third largest lender by asset base has also announced the official launch of its latest mobile banking innovation in a bid to up its game in the mobile payment arena.

Dubbed M-Co-opCash, the advanced mobile wallet solution will enable both the bank's customers and non-customers across all networks to open accounts, apply for loans straight from their mobile phones and also make cash and utility payments. Muriuki said the mobile wallet would be a significant boost to the bank's performance on non-funded income, which delivered a significant 37.8 per cent growth in the first half of 2014.

He said the innovation would ride on the bank's 4.6 million direct customers and the over 10 million Kenyans in the cooperative movement, the largest in Africa.

"M-Co-opCash as an innovative platform will also enable users to transfer funds across banks, microfinance institutions (MFIs) and mobile networks, and thereby deliver a greatly improved service experience to users," Muriuki said in a statement Wednesday.

The new innovation, he added, would among others, enable customers to do Electronic Funds Transfer (EFT) to any commercial bank and withdraw up to Sh200, 000 a day from M-Co-op Cash.

"This launch is evidently in line with the bank's vision to continuously offer value added financial services as well as enable financial deepening especially to the unbanked while contributing immensely to the Government's initiative for a cashless national payment system," he said.

According to the Group's unaudited financial statement total assets grew to Sh266.7 billion from Sh225.3 billion in a similar period last year. Loan book surged to Sh165.8 billion from Sh124.9 billion while total customer deposits increased to Sh203.3 billion.