Co-operative Bank’s #ticker:COOP net profit for the first nine months of 2019 has grown 5.5 percent to Sh10.9 billion, majorly lifted by strong growth in non-interest income.
Total non-interest income, mainly from fees and commissions on loans and advances, rose by 33.3 percent from Sh10.5 billion to Sh14.1 billion, keeping it in growth momentum with its peers KCB and Equity.
Group CEO Gideon Muriuki said its all-telco mobile wallet dubbed MCo-op cash was pivotal in the growth of non-funded income as registered customers hit 4.7 million, helping it disburse loans valued at over Sh27.6 billion as at end of the nine months.
“The group has continued with a strategy for continued deepening and dominance in our domain market segment leveraging our successful penetration of the micro, medium and small enterprises and the saccos while reviewing opportunities to grow alternative income streams from other services,” said Mr Muruiki
The growth in bottom line was despite total interest income dropping marginally by 1.6 percent to Sh30.4 billion even as loan book expanded by six percent to Sh268.9 billion.
However, interest income from government securities was up 18.1 percent to Sh8.2 billion as investment in government paper grew by 13.7 percent to Sh94.6 billion.
Income from deposits and placements with other banking institutions nearly doubled to Sh340 million from the previous period’s Sh172 million.
Co-op’s South Sudan joint venture in which it owns 51 percent stake made a before-tax profit of Sh174.7 million compared with Sh235.12 million posted in a similar period last year.
Mr Muriuki projected more business growth and profitability riding on increased lending and efficient delivery of services using alternative channels such as mobile banking.
“The repeal of the interest rate caps has added impetus to the growth of the economy,” he said, projecting a faster pace of growth in the loan book.
During the period, operating expenses grew 11 percent to Sh19.8 billion on account higher provisioning for non-performing loans.