Cooperative Bank profit hits Sh12.7bn, announces bonus share issue
The Cooperative Bank weathered the tough operating environment in the banking sector to post an 8.2 percent growth in its 2016 full year profit.
During the period, Cooperative Bank raked in Sh12.7 billion up from Sh11.7 billion a year earlier.
The performance was largely driven by the bank’s ability to grow its loan book at a time commercial banks are becoming more conservative in lending owing to the interest rate cap law.
Co-op Bank issued Sh236.9 billion shillings in loans, an 11 percent rise from the previous year.
This saw the bank’s net interest income rise 14.8 percent to Sh42.2 billion.
Cooperative Bank managed to outpace its tier one rivals in the industry, with the largest net profit growth.
Equity Bank announced a four percent dip in profit to Sh16.6 billion while the KCB Group’s profit grew by one percent to Sh19.7 billion.
Cooperative Bank Group Managing Director Gideon Muriuki lauded the bank’s ability to lower costs, improve efficient and manage its loan book for the growth in profit.
“The good performance in a tough operating environment is mitigated by the gains from the bold soaring eagle transformation project that the bank has been implementing since 2014 with a clear focus on improvement in operating efficiencies, sales force effectiveness and innovative customer delivery platforms,” Mr Muriuki said in a statement.
Co-op Bank’s total deposits declined by two percent to Sh263.6 billion.
While proposing a dividend of Sh0.80 per share the bank also announced plans for a bonus share issue.
Shareholders will receive one new share for every five held, subject to approval by the Capital Markets Authority.
Cooperative Bank last issued bonus shares in 2014.
During the period under review, shareholders’ funds grew to Sh61.3 billion as the bank focused on recapitalizing the bank to fund expansion.
“The level of capital enables the Group to double its balance sheet and also finance major corporate deals in the market,” the bank said.
Like most firms operating in South Sudan, the bank was not spared by the hyperinflation.
This led to a monetary loss of Sh498.3 million during the period due to currency devaluation.
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