Co-Operative Bank third quarter profit drops to Sh9.5bn
The Co-Operative Bank has announced a net profit of Sh9.5 billion for the third quarter period ended September 30.
This was 9.5 percent lower than the Sh10.5 billion the bank posted in 2016 as interest income during the period slowed.
During the quarter, Co-Operative Bank was able to grow its loan book to Sh259.4 billion compared to Sh227 billion last year.
This however did little to boost the bank’s total interest income which declined by 7.7 percent to Sh29.9 billion.
The bank’s operating expenses also rose marginally to Sh17.25 billion while operating income dropped by 4.3 percent to Sh30.9 billion.
This has seen Co-Operative Bank embark on a strategy to diversify its income as it adjusts to the interest cap regime.
“The Co-operative Bank group is alive to both the challenges presented by the operating environment, and also the wide opportunities offered by Kenya’s growing economy,” Co-Operative Bank Group chief executive officer Gideon Muriuki said in a statement.
The lender was also able to make a Sh30 million profit from its South Sudan operations despite the market presenting a tough operating environment.
With banks increasingly leveraging on financial technology, Co-Operative Bank was able to move 86 percent of its customer transactions to alternative delivery channels particularly mobile banking, ATMs, internet and agency outlets.
“We continue with our focus on digital bank which will ensure timely, business-led solutions delivery to our customers,” Mr Muriuki said.
In the last quarter, Co-operative Bank signed a joint venture deal with South African leasing company Super Group as part of efforts to diversify its income.
“The group has put in place strategies to sustain the business on a growth trajectory in the long-term leveraging on our strong balance sheet, solid customer base, and a wide range of service channels, robust ICT framework and a skilled team,” he said.
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