Co-op Bank races ahead with 17pc profit rise

Cheap deposits and increased lending helped Co-operative Bank post a 17 per cent jump in half-year net profit, making it Kenya’s fastest growing top-tier bank.

The bank said its half-year net profit stood at Sh4.7 billion compared to Sh4 billion a year earlier—thanks to a 19 per cent increase in net interest income to Sh8.8 billion.

Co-op’s deposit costs dropped to Sh2.8 billion from Sh5.5 billion, translating to savings of Sh2.6 billion that is higher than the additional profit of Sh700 million.

The bank loan book grew by Sh5.8 billion in the three months to June compared to the first quarter when it had remained flat as it benefited from a drop in cost of loans and peaceful March 4 elections.

“We opened an additional 11 branches mainly targeting high business potential areas key to growing deposit base and transactional income,” said the bank’s chief executive Gideon Muriuki.

At 17 per cent, the bank recorded the fastest growth among the top-tier banks that have announced their half year results so far including Equity Bank and National Bank, whose profits rose 16.7 per cent and 15.8 per cent respectively. Barclays Bank reported a 13 per cent drop.

The listed lender last month opened its first foreign subsidiary in South Sudan to reduce reliance on the Kenyan market. It injected Sh432 million in the subsidiary which is jointly owned with the Juba government, holding 49 per cent.