Co-op Bank half-year profit rises to Sh7.4 billion

 

Co-operative Bank CEO Gideon Muriuki. PHOTO | NMG

Co-operative Bank  net profit for the first six months of the year has grown 2.3 per cent to Sh7.4 billion, supported by growth in interest and non-interest income.

The increase came on the back of total operating income—made up of interest income and non-interest income—growing by 20 percent to Sh29.2 billion.

Net interest income grew by 18 percent to Sh18.8 billion as the loan book expanded by 11 percent to Sh302.1 billion.

Non-interest income was up 24 percent to Sh10.3 billion. This was supported by its Mco-op Cash mobile wallet which was disbursing loans valued at about Sh5.6 billion monthly.

Co-op’s operating expenses, however, rose by 28 percent or Sh4.1 billion to Sh18.7 billion on account of 123 percent growth in provisioning for loan defaults.

Loan loss provisioning rose to Sh4.2 billion from Sh1.9 billion, with the lender’s chief executive Gideon Muriuki attributing the rise to the need to recognise the economic hardships still facing borrowers in the Covid-19 environment.

Mr Muriuki said that customers have resumed payments on most of the Sh49 billion loans that the bank had restructured by end of March 2021 to accommodate those hit by the pandemic.The move was despite the stock of gross non-performing loans falling to Sh50.84 billion at the end of June from Sh59.1 billion in December.

“The restructured facilities are largely performing as per the realigned agreements. Our customers continue to show resilience therefore improving their repayment as the economy picks up in various sectors,” said Mr Muriuki.

Kingdom Bank

Co-op’s subsidiaries posted improved results, with the 90 percent-owned Kingdom Bank returning Sh275 million net profit. It had booked Sh200.9 million loss in the full year to December.

Co-op Consultancy & Insurance Agency returned Sh433.8 million pre-tax profit on increased bancassurance business while that of Co-op Trust Investment Services was Sh47.9 million as funds under management rose by Sh59.1 billion.

However, the Co-operative Bank of South Sudan returned a monetary loss of Sh290 million due to hyperinflation accounting following the South Sudanese pound devaluation.