Companies

Co-op Bank first quarter profit rises to Sh3.6bn

Co-operative Bank of Kenya #ticker:COOP has posted a 4.4 percent net profit jump in the first quarter ended March, helped by higher loans income and non-funded income amid lower operating costs.

The lender’s net earnings in the review period stood at Sh3.59 billion compared with Sh3.44 billion a year earlier.

Co-op Bank’s interest income from government securities jumped by 39.6 percent to Sh2.8 billion in the period as it increased its lending to government by 38.6 percent to Sh103.9 billion during the quarter from Sh75 billion in a similar period the previous year.

The lender's improved performance was also supported by a 19.1 percent increase in non-interest income, which rose to Sh4.2 billion.

The lender’s total operating costs decreased by 1.2 percent to Sh6 billion in the period.

Group CEO Gideon Muriuki said prudent cost management strategy, revenue diversification and enhanced efficiency helped deliver the performance.

“Key focus on digital banking, with the all-telco Mco-op Cash mobile wallet continued to play a pivotal role in the growth of non-funded income with over 4.3 million customers registered and 1.2 million loans worth over Sh5.1 billion disbursed,” said Mr Muriuki.

Alternative channels

The bank says that it has moved 88 per cent of all customer transactions to alternative delivery channels such as self-service kiosks in 155 branches and 11,600 banking agents.

Its South Sudan joint venture with South Sudan government in which it owns 49 per cent stake made a before tax profit of Sh41.7 million, being 28.7 per cent higher than Sh32.4 million posted in a similar quarter last year.

Coop’s performance helps it keep pace with second placed Equity Group #ticker:EQTY which also booked growth in profit.

NIC bank, which is working on a merger with Commercial Bank of Africa, with hope of outpacing Coop on bottom-line, saw a 4.3 per cent drop in profit to Sh931 million.

Coop Bank further disclosed that over 26,800 customers have taken up the rolled out Micro Small and Medium Enterprise (MSME) loan packages launched last year.

“We have earmarked Sh15.2 billion for MSME lending and to date we have disbursed Sh3.2 billion under the programme,” said Mr Muriuki

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