Jacktone Lawi

Co-operative Bank of Kenya posted a net income of Sh11.6 billion in the nine months to September, up from Sh9.7 billion a year earlier, on higher interest and non-interest income, as the economy recovers from Covid-19 knocks.

The Nairobi Securities Exchange listed lender shrugged off the pandemic effects to grow its profit before tax to Sh16.5 billion for the third quarter of 2021, a commendable 20 per cent growth compared to Sh13.8 billion same period last year.

Over the 9 months, the bank which leverages the cooperative movement saw total interest income surge by 21.5 per cent to Sh39.5 billion, on expanding loan book and increasing appetite for government debt paper.

This comes in the backdrop of increased loans uptake to customers with net loans and advances growing by Sh22.1 billion to Sh306.3 billion while investment in treasuries bills rallied 55.5 per cent to Sh193.3 billion.

“Customer deposits grew by 12 per cent from Sh375.5 billion to Sh420.4 billion. Borrowed funds grew by Sh17.7 billion (+67.6%) to Sh43.8 billion from Sh26.2 Billion in 2020,” said Gideon Muriuki Group Managing Director and CEO at Co-op Bank.

Operating income

During that period, the groups financial position deepened with growth in total assets increasing by Sh82 billion to Sh592.9 billion, compared to the same period last year.

Operating income also increased by 19.2 per cent from Sh37.2 billion to Sh44.4 billion, while total non-interest income recorded a 15.6 per cent growth, from Sh13.6 billion to Sh15.7 billion. 

However, growth in loan provisions saw operating expenses grow by Sh23.5 billion to Sh28 billion.

According to the lender,  this was in appreciation of challenges that businesses and households face due to the effects of the ongoing pandemic.

“A total of Sh49 billion in loans was restructured during the CBK restructure window that ended on 31st March 2021, with the restructured facilities largely performing as per the realigned agreements,” he said.

Focus on digital banking saw the lender disburse loans worth Sh51.3 billion year-to-date, averaging Sh5.7 billion per month, as digital alternatives continue to gain traction in the banking sector. 

“Through our multi-channel strategy, the bank has successfully moved 93 per cent of all customer transactions to alternative delivery channels; an expanded 24-hour contact centre, mobile banking, ATMs, internet banking and Co-op Kwa Jirani agency banking terminals,” Muriuki said.

Dividends

In what should be music to the ears of shareholders, and even as shareholders funds grew to Sh95 billion from Sh82 billion in 2020, Co-op board will maintain its dividends.

“The board of directors’ bold decision to sustain the same level of dividend payments to shareholders despite the Covid-19 crisis offered a most timely relief, especially to the over 15 million member Co-operative Movement,” the CEO said in a statement.

The group’s subsidiary Kingdom Bank made a net profit of Sh413.1 million during the period in review, contributing to Co-op Bank’s consolidated earnings. This was an improvement compared to the 2020 full year loss of Sh124 million.