Co-operative bank yesterday announced their half year results and following an emerging trend, they declared a 11% drop in their net profit to Ksh. 6.3 Billion down from Ksh. 7.1 Billion in 2016.
This dip in profits was due to among other things, a 10% decline in the interest income to Ksh. 19 Billion. This was in a large part due to a 9% drop in interest income from loans to Ksh. 15 Billion. This decline in interest income is in line with the effects of the interest rate cap which has depressed lending and shrunk incomes. On the other hand, non-interest income increased marginally to Ksh. 6.4 Billion up from Ksh. 6.2 Billion in 2016.
The bank’s costs increased marginally to Ksh. 10.8 Billion up from Ksh. 10.4 Billion in 2016. This was due to a 14% rise in the loan loss provision to Ksh. 1.5 Billion as the non-performing loans grew to Ksh. 12.2 Billion.
The banks loan book grew by 14% to Ksh. 251 Billion up from Ksh. 220 Billion over the same period last year. Customer deposits also grew to Ksh. 284 Billion up from Ksh. 276 Billion last year. The banks holding of government securities drop by 34% to Ksh. 22 Billion.
The lender announced plans to diversify its revenue through a joint venture with South Africa’s Super Group to offer leasing in the local and regional market.