Co-op bank third quarter pre-tax profit up 29pc

By James Anyanzwa

Co-operative Bank Group’s third quarter pre-tax profit rose 29 per cent.

The firm attributed the increase to inflow of revenues from fees and commissions and subsidiary businesses.

The Group’s profit before tax (PBT) for the nine months to September 30 grew to Sh5.65 billion from Sh4.38 billion in a similar period last year.

Group Chief Executive and Managing Director Gideon Muriuki noted that the bank had managed to maintain its growth plans and was able to grow all the revenue streams to sustain its profitability, despite the challenging macroeconomic environment.

"The continued good performance by the bank is a testimony that the bank is in line with the Group’s strategic focus on ‘sustainable growth," he said.

Muriuki said the bank’s subsidiary businesses including stockbrokerage, consultancy and investment management divisions performed well during the period thereby contributing to the Group’s bottome-line.

In a statement Friday, Muriuki maintained that the bank would continue focusing on the strategy of increasing customer numbers and transaction incomes to drive the bank’s performance for the rest of the year.

"The current economic environment will be closely monitored."

According to the group’s unaudited financial statements total non-interest income grew by three per cent to Sh5.3 billion from Sh5.16 billion in a similar period last year.

This was driven mostly by fees and commissions from automated teller machines, personal and business banking, mobile banking, forex income and letters of credit.

Operating revenue

Incomes from fees and commissions constituted 38 per cent of the Group’s total operating revenues, which rose by 22 per cent to Sh14.11 billion from Sh11.53 billion.

Net interest income grew by 38 per cent to Sh8.8 billion from Sh6.37 billion on account of increased lending. Operating expenses grew 20 per cent to Sh8.56 billion from Sh7.15 billion on the back of the Group’s ambitious expansion initiatives.

The net loan portfolio increased by 32 per cent to Sh106.4 billion from Sh80.5billion helped by the Groups’ diversified new product lines and competitive pricing mechanisms.

Total customer deposits increased by 17 per cent to Sh137.7 billion from Sh117.3 billion in a similar period last year.