GROWTH

Coop Bank Q1 profit up 65% on lower loan loss provision

Shareholders’ funds grew to Sh102.7 billion, a 10 per cent increase from Sh93.7 billion in 2021

In Summary
  • The total value of assets grew to Sh597 billion, from Sh552.9 billion in the same period last year.
  • The total value of assets grew to Sh597 billion, from Sh552.9 billion in the same period last year.
Co-operative bank managing director Gideon Muriuki during the release of the Bank Q3 financial report in Nairobi.
Coop Bank Group MD Dr. GEDION Muriuki at a past event. Co-operative bank managing director Gideon Muriuki during the release of the Bank Q3 financial report in Nairobi.
Image: ENOS TECHE

Cooperative Bank Group has posted a 65.5 per cent growth in profit after tax for the first quarter of this year, riding on a lower loan-loss provision and growth strategy.

The Nairobi Securities Exchange (NSE) lenders' net profit for the period ended March 31 was Sh5.8 billion, an increase compared to Sh3.5 billion reported in a similar period in 2021.

Profit before tax for the period was Sh7.78 billion, a 54.6 per cent increase compared to Sh4.98 billion recorded in the first quarter of 2021.

The performance delivers a competitive Return on Equity of 23.8 per cent to shareholders.

“The strong performance by the bank is in line with the Group’s strategic focus on sustainable growth, resilience, and agility,” Group managing director Gideon Muriuki said on Thursday.

During the period, customer deposits grew to Sh410.8 billion up from Sh 393.8 billion.

Net loans and advances to customers grew to Sh324.5 billion, a nine per cent growth from Sh298.2 billion same period last year.

The Group’s investment in government securities grew to Sh183.4 billion from Sh166.2 billion in 2021, as lenders continue to enjoy high returns from this segment.

The total value of assets grew to Sh597 billion, from Sh552.9 billion in the same period last year.

Shareholders’ funds grew to Sh102.7 billion, a 10 per cent increase from Sh93.7 billion in 2021, enabling the lender to continue pitching for big-ticket deals.

The group’s total operating income grew by 17 per cent from Sh14.4 billion to Sh16.8 billion, as non-interest income grew by 41.7 per cent from Sh4.5 billion to Sh6.4 billion. 

According to Muriuki, credit management remains a key focus area with

The bank’s Credit Risk Adaptation Project dubbed ‘Project Kilele’ and supported by a global consulting firm is now in the implementation phase.

In the year to March, the bank’s gross Non-Performing Loan book reduced by five per cent from last year, with NPL ratio improving to 13.3 percent against 15.2 per cent in a similar period last year.

“This affirms our credit quality and growth strategies and will continue to improve to single-digit pre-pandemic NPL levels,’ he said.

Meanwhile, the bank has successfully moved 94 per cent of all customer transactions to alternative delivery channels, through its digital channel strategy.

These include mobile banking, ATMs, internet banking and over 27,000 Co-op Kwa Jirani agency banking terminals.

“We have successfully migrated our customers to the Omni-channel, integrating accessibility and user experience,” Muriuki said.

Meanwhile, its subsidiary-Kingdom Bank Limited (A niche MSME bank) has contributed a profit before tax of Sh199.3 million in Q1,2022 compared Sh126.7 Million reported last year, representing 57 per cent growth year-on-year.