Commercial Bank of Africa has become the first lender in the country to return a profit growth in the six month period ended June this year.
This is after the bank posted a 14 per cent profit growth. The profit growth came as earnings from its transactions surpassed earnings from interests on loans.
It reported a net profit of Sh. 2.7 billion in the period compared to Sh. 2.3 billion a year earlier.
This profit growth was boosted by increased non-interest income, including forex trading and fees on mobile-based M-Shwari loans.
Revenue from these transactions rose 16.3 per cent to Sh. 5.5 billion, more than compensating for a 7.7 per cent decline in net interest income to Sh. 4.4 billion.
CBA’s fees and commissions on loans, in particular, increased by a fifth to Sh. 3.1 billion, aided by a 6.9 per cent loan book expansion to Sh. 114.3 billion.
The lender also benefited from a 2.8 drop in operating expenses to Sh. 6 billion, partly due to a 42 per cent fall in loan loss provision to Sh. 1.2 billion.
The bank provided less for its stock of bad debt despite this rising 3.5 per cent to Sh. 12 billion.