Commercial Bank of Africa reported Sh3.9 billion in net earnings at the end of the third quarter, a 2.68 per cent increase compared to a similar period last year.
The mid-tier lender saw its net interest income drop by 5.48 per cent to Sh6.8 billion in the period under review from Sh7.27 billion a year earlier.
Non-interest income from fees and commissions, mainly M-Shwari one-off charges, recorded muted growth of 8.99 per cent to Sh4.56 billion.
Commercial Bank of Africa’s (CBA) after-tax profit was nearly flat in the nine months to September on lower interest income.
The bank reported Sh3.9 billion in net earnings at the end of the third quarter, a 2.68 per cent increase compared to a similar period last year.
The mid-tier lender saw its net interest income drop by 5.48 per cent to Sh6.8 billion in the period under review from Sh7.27 billion a year earlier.
Non-interest income from fees and commissions, mainly M-Shwari one-off charges, recorded muted growth of 8.99 per cent to Sh4.56 billion. This was a key driver of the profit resilience.
This contrasted with a 14.3 per cent drop in interest income from loans to Sh8.88 billion, and a 5.47 per cent drop in earnings from government securities to Sh4.85 billion.
CBA’s loan book expanded by Sh6.89 billion or 6.47 per cent to Sh113.45 billion in September 2017 from Sh106.55 billion the year before.
Provisions for bad loans went down to Sh1.83 billion from Sh2.94 billion last year, highlighting improving asset quality.
The bank’s volume of gross non-performing loans stood at Sh12.88 billion during the period under review, slightly higher than the Sh12.76 billion last year.
Its investment in securities, mainly government debt, remained nearly flat at 0.57 per cent to Sh58.5 billion in the period under review from Sh58.18 billion in a similar period last year.
Several lenders have reported a slump in profit or muted growth as the year-old interest rate caps, coupled with a drought and prolonged electioneering, hurt banks’ business this year.
The banks have been piling up government securities over the last one year after interest on loans, their main source of income, was hurt by the rate cap law.
The amended law limited the cost of borrowing at four percentage points above the Central Bank rate (CBR, which was held at 10 per cent at the policy meeting last month.
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