Co-operative Bank has posted a Sh7.2 billion net profit for the first six months to June, a 3.6 percent drop from Sh7.5 billion in a similar period last year.
Co-op Bank Group CEO Gideon Muriuki said the lender has raised its loan loss provision by 57.9 percent to Sh1.87 billion from Sh1.18 billion in appreciation of the tough environment facing borrowers since Covid-19 pandemic struck.
Co-operative Bank #ticker:COOP has posted a Sh7.2 billion net profit for the first six months to June, a 3.6 percent drop from Sh7.5 billion in a similar period last year on increased bad debt provisioning even as interest income grew.
Net interest income grew by 12 percent to Sh15.9 billion from Sh14.3 billion posted in the first half year of 2019 to keep its bottom-line steady despite a five percent retreat in non-interest income to Sh8.3 billion.
At the same time, the banking market leader KCB Group #ticker:KCB has posted a 40 percent decline in net profit to Sh7.5 billion for first six months attributed to increased provisioning for loan defaults.
Co-op Bank Group CEO Gideon Muriuki said the lender has raised its loan loss provision by 57.9 percent to Sh1.87 billion from Sh1.18 billion in appreciation of the tough environment facing borrowers since Covid-19 pandemic struck.
“This strong performance is an affirmation of the resilience of the business in view of the most challenging operating environment occasioned by the Covid-19 pandemic that has brought about unprecedented economic and social disruption globally,” said Mr Muriuki.
Co-op Bank has restructured loans amounting to Sh39.2 billion since the country reported its first coronavirus infection case in mid-March and says that it is still actively considering customer applications on a case-by-case basis.
Its South Sudan unit, in which it owns 51 percent stake, while the Juba government holds the remain 49 percent, made a before tax profit of Sh102. 6 million, a growth from Sh93 million posted in similar half last year.
Its subsidiaries – Co-op Consultancy and Insurance Agency, and Co-op Trust Investment Services –contributed Sh387.8 million and Sh47.1 million pre-tax profits respectively.
Co-op’s investment in government securities grew 29 percent to Sh122.4 billion, helping it book a 12 percent interest growth to Sh6.2 billion.
The bank says a six percent growth in net loans and advances to Sh272 billion and a 19 percent growth in customer deposits to Sh384.6 billion during the period helped the business absorb some Covid-19 shocks.
Co-op is on course to formally acquire a 90 percent stake in Jamii Bora Bank on Friday next week after the deal received all the regulatory approvals.
The lender has hinted at using the deal to deepen micro, small and medium-sized entities banking, microfinance, youth and women banking, asset finance and leasing.
“The acquisition offers Co-op Bank the opportunity to cross-sell and deepen product offering to the enhanced customer base and create a niche bank to offer specialised credit offerings,” said Mr Muriuki.
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