Co-operative Bank has been processing an increased number of loans per day as borrowers find it more friendly in lending.
The bank, which was the first to lower its lending rates from an average of 16.2 per cent to the stipulated 14 per cent, has seen a rise from processing 250 loans to processing 1,250-1,300 loans.
However, a good number of these borrowers have been seeking to re-finance their existing loans. Following this growth in lending, Co-operative Bank is expected to weather the storms of reduced earnings from low interest margins.
According to a market report by Sterling Capital Limited, Co-operative Bank may only miss its full year growth target by 1.2 per cent.
“The bank’s management remains highly optimistic on next year’s earnings indicating that the rate capping won’t affect the bottom line as it will only impact four months of operation,” says Sterling Capital.
It adds that the bank has only taken a monthly cut of Sh. 539 million in lowering its rates to 14 per cent. “Added volumes in loans disbursed supported by the rising demand for credit and operation efficiency is expected to partly compensate.”