Co-operative Bank of Kenya has come in second place after I&M Bank as the top financial institutions in a report by Cytonn Investments.
Co-op Bank’s ranking rose to second from third in the 2019 Financial Year (FY) with the improvement attributed to the Gross non-performing Loans (NPL) ratio to 10.8 percent in Q1’2020 from 11.2% in FY’2019, in turn, improving its franchise value score.
“Co-operative Bank emerged top in the franchise ranking due to high-efficiency levels as evidenced by a low Cost to Income ratio which came in at 58.1 percent vs an industry average of 61.4 percent,” the report revealed.
At the same time, KCB group which was ranked first in 2019, declined to third place mainly due to a deterioration in the cost to income ratio to 61.1% in Q1’2020 from 56.2 percent in 2019 thus, in turn, worsening the franchise value score.
Equity Group and Diamond Trust Bank emerged fourth and fifth respectively in the comprehensive ranking.
The report observed that Kenya’s banking sector had shown resilient performance despite the tough operating environment which was largely attributable to persistent revenue diversification.
While releasing the financial results for Quarter 1,2020, Co-op Bank announced that it had restructured loans worth Ksh15 billion in the first quarter of 2020 to support customers during the Covid-19 pandemic.
With many sources of income affected by the pandemic, the bank engaged customers seeking a longer repayment period, those in need of an interest moratorium period and those seeking additional funding to sustain operations during the pandemic.