RESILLIENCE

Co-op Bank half-year profit drops marginally on Covid-19

The bank's assets grew to Sh514 billion up from Sh430 billion

In Summary
  • Gross profit marginally dropped to Sh9.6 billion from Sh10.4 billion in 2019
  • During the period under review, the bank’s income grew to Sh24.2 billion from Sh23 billion while net interest income rose by 12 per cent to Sh15.9 billion.
Co-op Bank Group MD Dr. Gideon Muriuki
Image: COURTESY

Co-operative Bank Group has posted Sh7.2 billion net profit in the half-year results, 3.6 per cent lower compared to the similar period last year.

The slight drop in earnings is attributed to negative effects of the Covid-19 pandemic, which forced the lender to restructure the sizable amount of its loans as customers struggle to meet their debt repayment obligations.

This saw the group take a higher loan loss provision of Sh1.9 billion during the period under review compared to Sh1.18 billion the same period last year, an increase of 57.9 per cent.

 

Consequently, this saw the lender’s gross earnings shrink marginally to Sh9.6 billion compared to Sh10.4 billion last year.

Co-op Bank Group MD Gideon Muriuki said the strong performance is an affirmation of the resilience of the business in view of the most challenging operating environment occasioned by the Covid-19 pandemic.

''We are actively engaging our customers to support them through this period by re-aligning servicing of facilities, funding and transactional needs as the situation unfold,’’ Muriuki said.

The bank has since restructured Sh39.2 billion loans to support customers following a direction by the Central Bank of Kenya (CBK) in March.

He added that they continue to implement proactive enterprise risk management initiatives to ensure uninterrupted business operations.

‘’We have fortified our digital channels to support uninterrupted access to banking services by our customers. At least 90 per cent of services are away from counters,’’ Muriuki said.

During the period under review, the bank’s income grew to Sh24.2 billion from Sh23 billion while net interest income rose by 12 per cent to Sh15.9 billion.

The bank’s total assets grew by a whopping Sh84.3 billion to hit Sh514 billion compared to Sh430 billion the same period last year.

The lender continued to advance loans despite increased uncertainties in the market with the report showing that its loan book grew by six per cent to Sh272.2 billion from Sh257.6 billion.

Investors’ fund grew by Sh80.1 billion from Sh71 billion similar period last year, enabling the lender to continue pitching for big-ticket deals.

Its operating expenses however grew by 16 per cent from 12.6 billion to Sh14.6 billion, especially on higher loan loss provision.