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HomeEconomyCorporateCo-op bank HY profit up 2.8% on rebounding operating income

Co-op bank HY profit up 2.8% on rebounding operating income

Co-op bank HY profits up 2.8% on rebounding operating income

The Co-operative Bank has registered a marginal 2.8 percent growth in earnings in six months to June this year, to record a profit of Ksh.7.4 billion compared to Ksh.7.2 billion recorded in a similar period last year.

The growth has been attributed to rebounding operating income having seen both interest and non-interest income grow strongly in the period.

During the half-year period, Co-operative’s net assets have grown to Ksh.573 billion with net loans and advances to customers rising by 10.7 percent to Ksh.301.2 billion.

Its customer deposits have increased to Ksh.407.7 billion from a lower Ksh.384.5 billion last year.

The lender netted Ksh.18.8 billion in interest earnings from Ksh.15.9 billion in June 2020 while non-interest funded income (NFI) grew by 24 percent to hit Ksh.10.3 billion.

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Growth in interest income is greatly linked to the resumption of loan repayments by customers alongside increased loan disbursements in the period under review.

The Co-operative Bank half-year profit growth could have been greater save for higher loan-loss provisioning costs in the period.

The cover for potential loan defaults was raised to Ksh.4.2 billion, doubling from a lower Ksh.1.9 billion previously.

The greater provisioning costs has had the effect of raising non-interest tied expenses for the lender by 28 percent to Ksh.18.7 billion.

At the same time, the greater provisions have been accompanied by 48 percent to Ksh.50.8 billion.

Co-operative Bank board of directors have not recommended the payment of an interim dividend in the period while the Group’s earnings per share have remained largely unchanged across the six months.

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Lawrence Baraza is a prolific writer with competencies in Digital Media, Print, and Broadcast. Baraza is also a Communication Practitioner currently spearheading Digital content on Metropol TV's Digital Desk.

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