Co-op Bank Group has reported a slight drop in net profit for the third quarter ended September on high loan provision arising from Covid-19 economic pressure.
The lender’s financial results for the period released Thursday show profit after tax dropped 10 per cent to Sh9.8 billion compared to Sh10.9 billion over a similar period last year.
Gross profit shrunk to Sh13.8 billion compared to Sh15.5 billion recorded in the corresponding period last year.
Managing Director Gideon Muriuki said the lender has taken a 90 per cent increase in loan loss provision from Sh2.1 billion in 2019 to Sh4 billion.
This he said is in appreciation of the challenges that businesses and households are grappling with from the disruption occasioned by the ongoing pandemic.
By September, a total of Sh46 billion in loans had been restructured to support customers impacted by the pandemic.
“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,’’ Muriuki said.
Despite the challenges, the lender’s operating income grew by six per cent from Sh35.2 billion to Sh37.2 billion while net interest income grew by 12 per cent from Sh21.2 billion to Sh23.6 billion.
Total assets grew by Sh70.1 billion (16 per cent) to Sh510.9 billion compared to Sh440.8 billion in the same period last year. Net loans and advances book grew by six per cent Sh15.4 billion from Sh268.9 billion to Sh284.2 billion.
Shareholders’ funds grew to Sh82 billion (11 per cent) from Sh73.9 billion in 2019 enabling the bank to continue pitching for big-ticket deals.
However, total-operating expenses grew by 18 per cent from Sh19.8 billion to Sh23.5 billion on account of higher loan loss provisions.The bank which finalised the acquisition and rebranding of Jamii Bora to Kingdom Bank is however optimistic about better results in the future, driven by the digital wave.”We shall ride 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’,” Muriuki said.Co-op Bank’s results is a continuation of a trend already displayed by other tier-one lenders like KCB and Equity Bank Group whose profits for the quarter have dipped on high loan loss provisions.Coronavirus pandemic saw Equity Group’s profits dipped to Sh15 billion compared to Sh17.5 billion reported in the corresponding quarter last year, representing a 14 per cent drop.Loan […]
