Business: The Co-Operative Bank of Kenya has reported a 47% net profit growth in just nine months that ended September 2022.
The Bank’s net profit raised to Ksh17 billion in the review period, up from Ksh11.6 billion a year earlier.
“The Performance significantly delivers a competitive roadmap return on equity of twenty-three (23) % to our shareholders,” Gideon Muriuki, Co-op Bank chief executive said.
“Strategic focus is our strong key outline by the bank in line with the group’s resilience, agility, and sustainable growth” Muriuki stated.
In a statement, he also added that all of the group’s subsidiaries, including the South Sudan operation, were significantly at an upper hand in the review period.
Further, non-interest income, such as fees and commissions from loans and forex trades, increased by 28.2% to Ksh20.1 billion, hence income interest clinched 10.5% to Ksh43.7 billion, partly due to a growth in the lending period.
Notably, the bank’s loan book expanded 9.4% to Ksh335.1 billion as investments in Government debt securities declined 5.6% to Ksh182.3 billion.
Meanwhile, the customer’s deposits rose 2.7% to Ksh432 billion, contributing to interest expenses rising 7.2% to Ksh11.6 billion.
The total operating expenses increased 6% to Ksh29.6 billion, driven by higher Staff costs.
Also, the bank’s cost-to-income ratio however improved to 45.8% from 49.3%.
In a statement, the Bank said that its ratio has come down from a high of 59% in 2014 when it embarked on its Growth and Efficiency strategy featuring the Digitisation of services.
“Through our Digital Channel Strategy, the bank has successfully moved 94% of all Customer Transactions to Alternative Delivery Channels, a twenty-four (24)-hour contact center, mobile banking, 550 ATMs, Internet Banking, and a wide network of Co-op Kwa Jirani agents,” Muriuki said in a statement.
The Bank reduced its loan loss provision by Ksh319.7 million to Ksh5.7 billion despite Gross defaults increasing by Ksh2.3 billion to Ksh51.8 billion.
On the other hand, the earnings of Kenya’s banks have continued to grow rapidly, helped by the economic recovery and reduction in loan loss provisions which were pronounced in the initial impact of the Covid-19 pandemic.
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While delivering the results, Muriuki announced that the Co-op bank has made a contribution of Ksh150 million in order to help Kenyan nationals affected by drought.