Co-operative Bank nine month profit falls to Ksh.9.8B

The Co-operative Bank of Kenya has announced an 11.1 per cent profit dip to Ksh.9.8 billion in nine months of operations to September 30, 2020.

The profit dip is largely attributable to higher operational costs resulting from increased loan-loss provisions and a contraction of the bank’s non-interest funded income.

Co-op’s loan-loss provision costs for instance nearly doubled to Ksh.4 billion from Ksh.2.1 billion pushing the lenders total operating costs to Ksh.32.4 billion from Ksh.28.7 billion.

The increased provisions came as the bank’s stock of gross non-performing loans hit Ksh.40.2 billion from Ksh.30.1 billion last year.

Meanwhile, the bank’s non-interest funded income (NFI) dipped to Ksh.13.6 billion from Ksh.14.1 billion at the same time last year.

The lower NFI dragged down the bank’s total operating income growth to a marginal 5.7 per cent with combined revenues rising to Ksh.37.2 billion from Ksh.35.2 billion.

Co-op’s net interest income however improved by 11.3 per cent to Ksh.23.6 billion on higher interest returns and a hold on interest expenses in the period.

Further, the bank has grown its loan book and customer deposits by 5.7 and 16.4 per cent to Ksh.284.2 billion and Ksh.375.5 billion respectively.

The profit decline has cut the bank’s earnings per share to Ksh.1.67 from Ksh.1.86.