The Co-operative Bank of Kenya has posted a Sh. 7.14 billion net profit in the first six months of the year. This was a 7.57 per cent from the Sh. 6.63 billion that the lender posted a year before.
This growth in profitability comes as Co-op Bank reaps from the Soaring Eagle strategy it has been implementing over the recent few financial years. It also entrenches the bank’s leading position in the face of capped interest rates that have seen multiple banks record falling profitability.
In this financial period, the bank’s total interest income grew by 7.9 per cent from Sh. 19.25 billion to Sh. 20.8 billion. This was buoyed by increased lending, especially to government, and investments in securities. For example, lending to the government grew by 17.45 per cent to Sh. 4.54 billion.
“We note with relief that the operating economic environment is on a gradual recovery path from the very significant challenges seen in the year 2017,” Gideon Muriuki, the Co-op Bank chief executive officer said.
Over this period, total deposits grew 4.5 per cent to Sh. 300.2 billion while loan loss provisions rose to Sh. 1.5 billion, up from Sh. 1 billion. This growth in loan provision was a 27.57 per cent rise in the same period amid a 130.84 per cent surge in gross defaults to Sh. 28.2 billion.
Earnings from lending to households and business increased by 5.69 per cent from Sh. 15.26 billion to Sh. 16.13 billion.
Co-op Bank’s total non-interest income remained flat in the period under review, at Sh. 6.99 billion compared with Sh. 7.1 billion in the first half of 2017.
The bank further anticipates to post a solid growth in its end of year results with the current economic recovery.