NAIROBI, KENYA, NOVEMBER 16 — The Co-operative Bank (Group) has posted a Ksh10.3 billion net profit for the year to September 30, on growing interest income mainly from loans and investment in government securities.
This is an 8.4 per cent jump from Ksh9.5 billion profit after tax reported in a similar period (third quarter) last year, with its subsidiaries mainly South Sudan boosting the group’s earnings.
The Nairobi Securities Exchange (NSE) listed lender’s strong performance comes even as the banking industry in Kenya continues to navigate through a challenging economic environment, which has been occasioned by among others-the capping of interest rates in the country.
“Co-operative Bank of South Sudan made a profit before tax of Ksh235.12 million in the third quarter of 2018,” the tier one lender reported on Thursday.
This is up from Ksh39.15 million realized in a similar period last year.
The growth in profit came as the group recorded an increase in its customer banking activities which saw deposits swell to Ksh296.1billion, up from Ksh288.9 billion last year.
During the period, the lender’s loan book (net loans and advances to customers) marginally dropped to Ksh254.2 billion from Ksh259.4 in quarter three of 2017.
Interest income from loans however recorded a growth to Ksh23.8 billion from Ksh23.5 billion last year. Interest earnings from government securities also rose to Ksh6.9 billion, up from 6.1 billion in a corresponding period last year.
These two helped total interest income to close at Ksh30.9 billion, a growth from Ksh29.9 billion in 2017, as net interest income grew to Ksh21.7 billion from Ksh20.8 billion.
This came as the bank’s investment in government securities went up to Ksh83.3 billion from Ksh68.1 billion last year.
Non-Performing Loans (NPLs) however increased to Ksh28.6 billion from Ksh16.03 billion.
During the period under review, the group also saw its total operating expenses increase to Ksh17.8billion from Ksh17.3billion as staff costs rose to Ksh8.1 billion from Ksh7.2 billion last year.
Total operating income however increased to Ksh32.3 billion from Ksh30.9 billion as the lender continued to reap from growing business in mobile banking, agency and internet banking platforms.
“Key focus on digital banking continues to play a pivotal role in the growth of non-funded income with over 3.9 million customers registered,” Group CEO and Managing Director Gideon Muriuki said.
The lender has more than 11,000 banking agents under its Co-op Kwa Jirani flagship which has been critical in supporting non-branch services.
Co-op Bank’s nine month profit growth follows the path of other tier one banks-KCB Group and Equity Group, who recently announced net earnings of Ksh18 billion and Ksh15.8 billion respectively.