Co-operative Bank of Kenya’s #ticker:COOP net profit for the nine months to September dipped by Sh1 billion to Sh9.54 billion on lower interest income, a consequence of the rate capping regime and slowed economic activity.
The tier one lender’s 9.5 per cent drop in after-tax income mainly resulted from a 7.7 per cent decrease in total interest income to Sh29.85 billion compared to Sh32.34 billion posted during a similar period last year.
Interest earned from loans to customers dropped Sh1.7 billion to close the third quarter at Sh23.6 billion despite the net amount of loans advanced having increased by Sh32.3 billion to Sh259.4 billion.
“Co-op Bank is delighted to report…a commendable performance against the backdrop of a tight operating environment…with the capping of interest rates and the general economic slowdown in an election year,” Gideon Muriuki, the bank’s managing director said in a statement Thursday.
Non-interest revenues up
The lender’s total non-interest income however increased 3.4 per cent to close the period at Sh10.14 billion. This was mostly driven by fees on commissions the bank levied on loans and advances which went up by Sh542 million to close the period at Sh1.85 billion.
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Co-op’s interest expense dropped 8.6 per cent to close the period at Sh9.08 billion as the bank paid less for deposits.
Customer deposits stood at Sh288.96 billion, representing a growth of Sh31.2 billion when compared to a similar period last year, but the interest paid on this haul dropped 11.4 per cent to Sh8.1 billion.
The bank’s total operating expenses increased marginally from Sh17.15 billion to Sh17.25 billion. Co-op also closed the period under review with total assets of Sh388.3 billion, representing a growth of 9.7 per cent from Sh354 billion in 2016.
“Co-op Bank is alive to both the challenges presented by the operating environment, and also the wide opportunities offered by Kenya’s growing economy,” said Mr Muriuki.
“The group has put in place strategies to sustain the business on a growth trajectory in the long-term leveraging on our strong balance sheet, solid customer base, and a wide range of service channels, robust ICT framework and a skilled team.”