Co-operative Bank profit rises to Sh3.44 billion

?Co-operative Bank of Kenya’s net profit for the first three months of the year has jumped 6.9 per cent to Sh3.44 billion.

This is up from Sh3.2 billion posted in a corresponding period last year.

The growth in the regional lender’s bottom line came on the back of a nine per cent rise in total interest income from Sh9.5 billion to Sh10.4 billion.

This was on account of an increase in interest income from Government securities, which rose by 13.4 per cent to Sh2 billion and interest income from loans and advances, which rose by nine per cent to Sh8.4 billion as the loan book expanded by 2.8 per cent.

Loans and advances to customers, on the other hand, grew by Sh6.97 billion to Sh252.8 billion compared to Sh245.9 billion in the same period last year, while investment in Government securities jumped by 24 per cent to Sh75 billion.

“This is a very commendable performance, as the operating environment gradually recovers from the significant headwinds that the business had to contend with in 2017,” said Group Managing Director Gideon Muriuki.

South Sudan’s subsidiary, in which the bank holds a 51 per cent stake, made a gross profit of Sh32.4 million, being an improvement from a loss of Sh34.7 million in a similar period last year. Co-operative Bank’s performance was in line with the trend set by its tier I peers. So far, Kenya Commercial Bank, Equity Group and Stanbic Bank have all posted growth in profits during the quarter under review.

Alternative channels

Overall, the lender’s total operating income grew by 8.4 per cent to Sh10.9 billion. Total interest expenses increased by five per cent from Sh2.83 billion to Sh2.97 billion on account of a 6.3 per cent growth in interest on deposits.

This even as 87 per cent of the transactions took place on alternative delivery channels such as agents.

During the period, the bank booked a four per cent growth in non-funded income from Sh3.39 billion to Sh3.52 billion, with the bank attributing this to digital banking products.

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