PERFORMANCE

Co-op Bank Q3 profit jumps to Sh11.6 billion

This is up compared to Sh9.8 billion same period last year.

In Summary

•The profit jump comes amid high income and a return to profitability of subsidiary–Kingdom Bank.

•Total operating income grew by 19.2 per cent to Sh44.4 billion from Sh 37.2 billion.

Coop Bank Group managing director Gideon Muriuki at a past event.
Image: COURTESY

Co-operative Bank's net profit for the nine months to September grew 18.4 per cent, buoyed by high income and a return to profitability of its subsidiary Kingdom Bank.

It recorded a profit after tax of Sh11.6 billion compared to Sh9.8 billion reported in a similar period last year, when the pandemic had hit the economy.

Kingdom Bank Limited (formerly Jamii Bora Bank) contributed a profit before tax of Sh413 million in Q3 2021, compared to 2020 full year loss of Sh124 million.

Co-op Bank holds a controlling 90 per cent equity interest in Kingdom Bank.

The Group's profit before tax grew to Sh 16.5 billion, a 20 per cent growth compared to Sh13.8 billion recorded in the third quarter of 2020, despite a dismal performance by its subsidiary in Sudan.

Co-operative Bank of South Sudan, a joint venture partnership with government of South Sudan on a 51:49 per cent ratio returned a monetary loss of Sh104million during the period under review.

This is attributed to hyperinflation accounting due to currency devaluation of the South Sudanese pound.

The Group's overall performance however exceeded pre-pandemic performance.

Chief executive Gideon Muriuki said focus on digital banking continued to play a pivotal role in the growth of non-funded income with 5.3 million customers and loans worth Sh 51.3 billion disbursed year-to-date.

This is an average Sh5.7 billion per month.

Total operating income grew by 19.2 per cent to Sh44.4 billion from Sh 37.2 billion.

The Group's total non-interest income grew by 15.6 per cent to Sh15.7 billion from Sh13.6 billion.

Net interest income grew by 21.3 per cent from Sh23.6 billion to Sh28.7 billion.

Total operating expenses grew by 19.2 per cent from Sh23.5billion to Sh 28 billion on account of a 50 per cent prudential growth in loan-loss provisions.

Co-op Bank's total assets now stand at Sh592.9 billion, having grown by Sh 82 billion from Sh510.9 billion it had same period last year.

As at September 30, the bank's loan book stood at Sh306.3 billion, Sh 22.1 billion more compared to Sh284.2 billion same period last year.

Customer deposits grew 12 per cent from Sh375.5 billion to Sh420.4 billion.

"Shareholders’ funds grew to Sh95 billion from Sh82billion in 2020 enabling us to continue pitching for big ticket deals," Muriuki said.

The Group restructured a  total of Sh 49 billion in loans during the CBK restructure window that ended on March 31, with the restructured facilities largely performing as per the realigned agreements, it notes.