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September 21, 2018

Co-op Bank invests in govt mortgage plan

Co-operative Bank along Haile Selassie Avenue
Co-operative Bank along Haile Selassie Avenue

Tier one lender Co-operative Bank has approved a Sh200 million capital injection in the share capital in the government's mortgage company, Kenya Mortgage Refinance Company, to support long term financing for affordable housing.

The bank has posted a 7.6 per cent rise in net profit for the half year to June, at Sh7.1 billion compared to Sh6.6 billion in the same period last year.

Total interest income improved by 7.9 per cent to Sh20.8 billion from Sh19.25 billion on account of interest income from government securities that rose 17.45 per cent to Sh4.55 billion. At the same time, interest income from loans and advances also rose 5.7 per cent to Sh16.13 billion from Sh15.26 billion.

Its total asset grew 3.9 per cent to Sh398.4 billion from Sh383.3 billion during a similar period last year, while net loans reduced marginally from Sh252.6 billion in 2017 to Sh251.1 billion. Deposits grew 4.5 per cent to Sh300.2 billion compared to Sh287.2 billion in the same period last year.

The bank increased investment in government securities, growing its portfolio 13.7 per cent to Sh80.2 billion, from Sh70.5 billion in 2017. Its joint venture with Government of South Sudan, the Co-operative Bank of South Sudan, also posted a profit before tax of Sh114.6 million, after a marginal loss of Sh60,000 in the first half of last year.

CEO Gideon Muriuki said the bank is optimistic that this year will be much better for the lender, after a drought and politically challenged 2017, leveraging on the growing base of account holders, digital banking and various channels that it employs to deliver services.

"The operating environment is on a gradual recovery path from the very significant challenges seen in 2017," he said.

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