Co-operative Bank Group on Thursday posted KSh3.58 billion profit compared to KSh5.59 billion in a similar period last year. The lender recorded a profit before tax of Ksh5.1 billion.
“The Group notes the strong performance in the first quarter of this year, and continues to pay close attention to the enormous challenge posed by Covid-19 with a view to sustaining full and uninterrupted business operations in the days ahead,’’ Coop Bank Group managing director Gideon Muriuki said.
“Key focus on digital banking, with the all-telco M-Coop Cash Mobile Wallet continuing to play a pivotal role in the growth of non-funded income with 5.6 million customers registered and loans worth over KSh16 billion disbursed in quarter 1 2020,” said Mr. Muriuki.
Total operating income grew by 12.5 percent from Ksh11.1 billion in the same period in 2019 to Ksh12.5 billion in Q1 2020.
Total non-interest income also rose by 19 percent from Ksh4.2 billion to Ksh5 billion.
Net interest income increased by 8.5 percent from Ksh6.9 billion to Ksh7.5 billion.
Total operating expenses grew as well, increasing by 20.6 percent to hit Ksh7.3 billion from Ksh6 billion on account of higher loan loss provision and staff expenses.
Its staff costs rose to KSh3.4 billion from KSh2.7 billion while the loan loss provisions nearly doubled from KSh510 million to Sh900 million.
The lender also revealed that it had restructured loans worth Ksh15 billion in the first quarter of 2020 to support customers during the Covid-19 pandemic.
“The operating environment has deteriorated substantially due to the unravelling pandemic with the bank increasing (similar to peers that have announced) loan provisions substantially by 79.5 percent under the forward-looking provisioning of IFRS-9 standards.
We maintain our long-term BUY rating on COOP at a fair value estimate of Ksh18.48,” Genghis Capital COOP Bank of Kenya 1Q20 Earnings Note.