Co-op Bank Full Year 2018 Earnings Grow 9.5%  on Net Interest Income

Co-op Bank Reports 3.6% Drop in Profit, HY Operating Costs Rise 15.7% on Loans and Staff

Co-operative Bank of Kenya (NSE: COOP) has reported a 9.5% y/y growth for Full Year 2018 Earnings Per Share (EPS) to Ksh 2.18 buoyed by Net Interest Income (NII) which grew 9.5% y/y to Ksh 30.8 billion.

The bank posted a Profit before Tax of Kshs.18.2 Billion compared to Kshs.16.4 Billion recorded in 2017, an impressive growth of 11% against the backdrop of a challenging operating environment in the period.

Profit after Tax was Kshs 12.7 Billion compared to Kshs 11.4 Billion in the previous year.

Key financial highlights include

Profit & Loss

Total interest income improved by 7% from Kshs 40.37 billion to Kshs 43.02 billion on account of; Interest income from government securities increasing by 19% from Kshs 8.21 billion to Kshs 9.79 billion and Interest income from loans & advances increasing by 3% from Kshs 31.94 billion to Kshs 32.95 billion.

Total interest expense remained under tight control, falling by Kshs 300 million from Kshs 12.27 billion to Kshs 12.24 billion. This was despite a 7% growth in deposits indicating improved management of the cost of funds.

Total operating income grew by 5% from Kshs 41.6 billion to Kshs 43.68 billion.

Balance sheet

Total assets grew by Kshs 26.5 Billion (+7%) to Kshs. 413.41 Billion from Kshs 386.86 Billion recorded at the close of year 2017.

Net loans and advances book declined marginally (-3%) to stand at Kshs. 245.41 billion compared to Kshs. 253.86 billion in 2017.

Investment in Government securities grew by Kshs.11.03 billion (+16%) to Kshs. 80.27 billion compared to Kshs. 69.24 billion in 2017.

Customers deposits grew by 7% from Kshs. 287.37 billion to Kshs 306.12 billion

Borrowed Funds from development partners grew by Kshs. 2.79 billion (+13%) to Kshs 23.95 billion compared to Kshs.21.16 billion in 2017.

Shareholders’ funds grew to Kshs. 69.86 billion in 2018 that enables the bank to continue to pitch for big ticket deals.

Dividend

The Board of Directors has recommended for approval by the AGM the payment of a dividend of Kshs. 1.00 per every ordinary share held subject to approval by the Capital Markets Authority.

This will represent a growth of 25% compared to a dividend of Kshs 0.80 paid in 2017.