Interest income due to lending to the government grew 17.45pc to Sh4.54bn
Earnings from lending to households and business increased by 5.69 per cent
Loan book remained flat at Sh251.1bn compared with Sh252bn in the same period last year
Co-operative Bank of Kenya #ticker:COOP has announced a 7.57 per cent rise in net profit in the half year ended June, buoyed by increased interest income.
Co-op Bank’s net profit stood at Sh7.14 billion in the period compared with Sh6.63 billion the year before.
Co-op Bank’s total interest income grew by 7.9 per cent from Sh19.25 billion to Sh20.8 billion in the period.
The bank’s interest income due to lending to the government grew by 17.45 per cent to Sh4.54 billion as its investment in government securities rose 13 per cent or the equivalent of Sh9.7 billion to Sh80.2 billion in the period up from Sh70.5 billion in the previous period.
Earnings from lending to households and business increased by 5.69 per cent from Sh15.26 billion to Sh16.13 billion.
This came as the loan book remained flat at Sh251.1 billion compared with Sh252 billion in the same period last year representing a 0.56 per cent drop.
The financier attributed the performance to a “gradual economic recovery” from a tough operating environment witnessed last year.
“The Co-operative Bank group notes with relief that the operating environment is on a gradual recovery path from the very significant challenges seen in 2017,” said chief executive Gideon Muriuki on Thursday.
“This is a commendable performance in an operating environment that is gradually recovering from the significant headwinds that business had to contend with in the aftermath of the 2017 elections.”
Non-interest income
Co-op Bank’s total non-interest income remained flat in the period under review, at Sh6.99 billion compared with Sh7.1 billion in the first half of 2017.
Total deposits grew 4.5 per cent to Sh300.2 billion, as its interest expenses rise 2.2 per cent to Sh5.97 billion.
Co-op Bank’s loan loss provisions rose to Sh1.5 billion, up from Sh1 billion.
This was a 27.57 per cent rise in the same period amid a 130.84 per cent surge in gross defaults to Sh28.2 billion.
