Co-operative Bank of Kenya Managing Director Gideon Muriuki during the release of the bank's quarter three results at the Sarova Stanley on November 17, 2016. PHOTO | DIANA NGILA | NATION MEDIA GROUP.
What you need to know:
The top tier lender closed the period with a loan book of Sh227 billion, representing a 6.9 per cent increase from last year’s 212.3 billion.
The bank’s investment in government papers was up 57 per cent to Sh 66.6 billion compared to the Sh42.2 billion last year.
Co-operative Bank’s net profit for the nine months to September has increased by nearly a quarter on the back of increased interest income from loans and government papers.
The NSE-listed lender on Thursday reported that its net earnings for the third quarter of the year has increased 22.3 per cent to Sh10.5 billion compared to the Sh8.6 billion it posted during a similar period last year.
Co-op’s interest income from loans and deposits jumped by Sh3.9 billion to close the period at Sh25.34 billion as interest income from government securities were up 60.1 per cent to Sh6.7 billion.
“With interest rate capping, there has been a recorded rise in demand for credit from the consumer sector,” Gideon Muriuki, the bank’s managing director, said during the release of its quarter three results.
The top tier lender closed the period with a loan book of Sh227 billion, representing a 6.9 per cent increase from last year’s 212.3 billion.
The bank’s investment in government papers was up 57 per cent to Sh 66.6 billion compared to the Sh42.2 billion last year.
Co-op’s assets grew by 6.4 per cent to close the quarter at Sh354 billion. Its total liabilities increased by Sh12.1 billion to Sh295.2 billion mainly on higher customer deposits which increased Sh4.3 billion to end the period at Sh257.8 billion.
Despite the business and political challenges in South Sudan, Co-op’s four branches in the country returned a profit of Sh45.1 million for the nine months to September.
The lender, which has 145 branches countrywide, says a transformation programme initiated in collaboration with McKinsey and Company two years ago is paying dividend.
The bank’s cost to income ratio has dropped to 47 per cent from 60 per cent in 2014 when the consultancy firm was hired to advice on how to improve operational efficiency.
“The plan has seen over 87 per cent of the bank’s customer transactions migrated to alternative channels, leading to impressive channel optimisation,” said Mr Muriuki.
“Our key focus will be mobile banking. Only 30 per cent of the registered 3.03 million users are active on the platform. We expect our gross profits to go up by at least 22 per cent by the end of the year as we continue to implement the plan.”
