Kenya’s Co-operative Bank net profit for the nine months period to September 30 declined by 10 percent over reduced banking transactions and increased provisioning to cushion against the economic disruption occasioned by the Covid-19 pandemic.
The lender, which is listed on the Nairobi Securities Exchange (NSE), recorded a profit after tax (PAT) of Ksh9.8 billion ($98 million) compared to Ksh10.9 billion ($109 million) in the same period last year, according to the unaudited financial statements released Thursday.
While the surge in loan loss provisioning and reduced non-funded (interest) income impacted the bank’s profitability the lender, which relies heavily on the country’s 15 million-member cooperative movement, increased its investment in government securities and disbursed more loans to stay afloat. This is reflected by a surge in interest income and loan book during the nine months to September 30, 2020.
Its net loans and advances grew by six percent to Ksh284.2 billion ($2.84 billion) from Ksh268.9 billion ($2.68 billion) while investment in government securities increased by 50 percent to Ksh142.3 billion ($1.42 billion) from Ksh94.6 billion ($946 million) in the same period last year.
Other lenders that have already published their Quarter 3 performances such as KCB and Equity bank have seen their net earnings tumble by 43 percent and 14 percent, respectively.
Coop bank, the country’s fourth largest lender by assets ($5.1 billion) increased its loan loss provision by 90 percent to Ksh4 billion ($40 million) from Ksh2.1 billion ($21 million) in response to the challenges that businesses and households are grappling with as a result of the coronavirus that has infected more than 72,000 people in the country. Equity’s Q3 net earnings drop 14 percent
KCB’s Q3 net profit drops 43 pc
“We shall, riding on the unique synergies in the over 15 million-member co-operative movement that is the largest in Africa, continue to pursue strategic initiatives that focus on resilience and growth in the ‘New Normal’ as the Nation focuses on flattening the curve and as vibrancy returns to the Economy,” said Gideon Muriuki, the group’s Chief Executive in a statement Thursday.
“We continue to actively engage our customers to support them through this period, by re-aligning the servicing of facilities, funding and transactional needs as the situation unfolds.”
The group’s total operating income grew by six (6) percent to Ksh37.2 billion from Ksh35.2 billion ($352 million), with net interest income accelerating by 12 percent to Ksh23.6 billion ($236 million) from Ksh21.2 billion […]