Cooperative Bank has made Kshs. 9.8 billion in net profit during the first nine months of this year, representing a 10% reduction which the lender blames on increased COVID-19 related loan loss provisions. Cooperative Bank booked a 905 increase in loan loss provision from Kshs. 2.1 billion in 2019 to Kshs. 4 billion.
Group CEO Gideon Muriuki in a statement said in appreciation of the challenges that businesses and households are grappling with from the disruption occasioned by the ongoing pandemic led to the Group’s increment in loan loss provision.
“As at the close of the third quarter, a total of 46 Billion shillings in loans have been restructured to support customers impacted by the pandemic.”
Confirmation of the first corona virus case saw the government recommend social distancing and work from home for non-essential workers.
This affected income generation that saw the central bank among others recommend that commercial banks allow borrowers facing difficulties in repaying their loans to restructure them.
This has come to haunt banks that have been reporting steady increases in non-performing loans that has affected profits.
Absa saw its quarter three profit plunge 65%, KCB reported a 43% dip in profit while Equity Bank saw profits reduce 14%.
Co-op Bank says fortification of digital channels to support uninterrupted access to banking services by customers continues with over 90 percent of services now on alternative banking channels.
Total Assets in the period under review grew by Kshs. 70.1 billion to Kshs. 510.9 billion compared while net loans and advances rose by Kshs. 15.4 billion to Kshs. 284.2 billion.
The lender’s subsidiary, Co-operative Bank of South Sudan made a pretax profit of 217.8 million shillings.