Co-operative Bank half-year profit rises to Ksh.7.4 billion

Co-operative Bank half-year profit rises to Ksh.7.4 billion

The Co-operative Bank has registered a marginal 2.8 per cent growth in earnings through the first six months of the year having returned a profit of Ksh.7.4 billion.

The growth in profitability from Ksh.7.2 billion is largely anchored on rebounding operating income having seen both interest and non-interest income grow strongly in the period.

The Group 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 per cent to hit Ksh.10.3 billion.

Growth in interest income is greatly linked to the resumption of loan repayments by customers alongside increased loan disbursements in the six months.

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 per cent to Ksh.18.7 billion.

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

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 per cent to Ksh.301.2 billion.

Meanwhile, the bank’s customer deposits have increased to Ksh.407.7 billion from a lower Ksh.384.5 billion last year.

Co-operative 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.