Co-operative Bank of Kenya managing director, Gideon Muriuki. The bank’s net profit has risen to Sh4 billion in the six months to June from Sh3.3 billion a year earlier. Photo/File
Cooperative Bank post-tax profit rose 21.7 per cent net profit growth in the first half 2012, the bank said in a statement.
The Kenyan bank’s net profit rose to Sh4 billion in the six months to June from Sh3.3 billion a year earlier. This was driven by increased lending and higher net interest margin.
Its loan book grew 18.3 per cent to Sh112.6 billion from Sh95.1 billion, raising interest income 78.4 per cent to Sh12.9 billion from Sh7.2 billion.
Cooperative Bank managing director Gideon Muriuki said interest income grew faster than the loan book because of the higher rates in the review period, noting that the bank also incurred higher interest expenses.
Co-op’s interest expenses rose 318 per cent to Sh5.5 billion from Sh1.3 billion but the bank grew its net interest income by 25 per cent to Sh7.4 billion.
Base lending rates more than doubled to 25 per cent in last year’s fourth quarter after the Central Bank raised its signal lending rate to 18 per cent to tame inflation and support the weak shilling.
The lending rates more than tripled the deposit rates, which averaged seven per cent, though large depositors were able to negotiate for up to 20 per cent for their money.
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