Cooperative Bank Group has posted Sh7.4 billion for the first six months of the year supported by growth in interest and non-interest income.
This is a 2.8 per cent increase from the first quarter wher the bank’s net profit retreated to Sh3.46 billion.
The growth came on the back of total operating income made up of interest income and non-interest income growing by 20 per cent to Sh29.2 billion.
Net interest income grew by Sh18.8 billion in interest earnings from Sh15.9 billion in June 2020 while non-interest funded income (NFI) grew by 24 per cent to hit Ksh.10.3 billion.
According to the Group’s Chief Executive Officer Gideon Muriuki, the growth in interest income is greatly linked to the resumption of loan repayments by customers alongside increased loan disbursements in the six months,” stated the lender.
“The restructured facilities are largely performing as per the realigned agreements. Our customers continue to show resilience therefore improving their repayment as the economy picks up in various sectors,” he said.
However, Co-op’s operating expenses rose by 28 per cent or Sh4.1 billion to Sh18.7 billion on account of 123 percent growth in provisioning for loan defaults.
Loan loss provisioning rose to Sh4.2 billion from Sh1.9 billion, with the lender’s chief executive Gideon Muriuki attributing the rise to the need to recognise the economic hardships still facing borrowers in the Covid-19 environment.
“The Group prudentially increased loan loss provisions to Sh4.2 billion in appreciation of the challenges that businesses and households continue to face due to the economic effects of the ongoing pandemic,” said Muriuki.
Meanwhile, Co-op’s subsidiaries posted improved results, Kingdom Bank returning Sh275 million net profit.
Co-op Consultancy and Insurance Agency returned Sh433.8 million pre-tax profit on increased bancassurance business while Co-op Trust Investment Services was Sh47.9 million as funds under management rose by Sh59.1 billion.
However, the Co-operative Bank of South Sudan posted a loss of Sh290 million due to hyperinflation accounting following the South Sudanese pound devaluation.
