The Co-operative Bank of Kenya’s net profit grew 5.8 per cent in the half year ended June to Sh12.1 billion as interest expenses expanded faster compared to income from lending and non-lending sources.
During the same period last year, the bank recorded a net income of Sh11.4billion.
During the period under review, the profit before tax stood at Sh16.4billion representing 7.4 per cent growth compared to Sh15.3billion posted in the first half of 2022.
“The strong performance by the bank is in line with the group’s strategic focus on sustainable growth, resilience, and agility.” Co-operative Bank Chief Executive Officer Gideon Muriuki said through a quick dispatch to newsrooms.
Growth of the total assets marked key performance highlights and financial position that grew to Sh664.9billion representing a 10.1 per cent growth from Sh603.9billion in the same period last year.
The total assets, net loans and advances, customer deposits, shareholder funds, and external funds from development partners all posted positive growth over the period under review.
Further, net loans and advances grew by 10.7 per cent to Sh365.4 billion from Sh330.1 billion last year.
Similarly, customer deposits grew by 9.7 per cent to Sh463.9 billion from Sh423 billion in the same period the previous year.
On the other hand, shareholder funds grew by 11.9 per cent to Sh108.3billion from Sh96.7 billion in 2022. External funds from development partners increased by a whopping 43.6 per cent to Sh59.4billion from Sh41.4billion in 2022.
The net interest income grew by 2.3 per cent while to Sh21.5billion from Sh21.1billion in 2022 while total non-interest income grew by four per cent to Sh13.8billion from Sh13.3billion.
The bank’s total operating expenses declined marginally to Sh19.2 billion from Sh19.1billion reported same period in 2022.
The bank said it has made loan loss provisions for Sh2.9 billion, a 71.1 per cent loan loss reserve coverage level. The lender also said it has successfully migrated its core banking system to the latest version of Finance from Infosys, rated the top core banking system in 2022 by Gartner.
“This upgrade is part of our ongoing digitisation journey to enhance service experience and provide the most innovative and advanced banking solutions.” Muriuki added.
The bank’s Mco-op mobile money wallet continues to drive substantial non-funded income streams for the lender.
Kingdom Bank, in which Co-op Bank has a 90 per cent stake, saw its net profit rise 28.6per cent to Sh521.9 million.
Co-op Bank acquired the lender, previously mired in heavy losses, in 2020 via a Sh1 billion rescue deal arranged by the Central Bank of Kenya.