Co-op Bank’s Q3 profit rises to Sh10.54 bil­lion

Loans in­creased by 6.92 per cent to Sh227.05 bil­lion, while cus­tomer de­posits were al­most flat, ris­ing 1.6% to Sh257.8bn

The Star (Kenya) - - News Business - CON­STANT MUNDA @munda­con­stant

Co-op­er­a­tive Bank, the coun­try’s sec­ond largest lender by mar­ket share, yes­ter­day re­ported net profit in nine months through Sep­tem­ber rose 22.27 per cent on in­creased in­ter­est earn­ings.

Net earn­ings rose to Sh10.54 bil­lion from Sh8.62 bil­lion it posted in the same pe­riod last year af­ter in­ter­est in­come that rose 28.94 per cent to Sh22.41 bil­lion.

Loans in­creased by 6.92 per cent to Sh227.05 bil­lion, while cus­tomer de- posits were al­most flat, ris­ing 1.6 per cent to Sh257.80 bil­lion.

“The sus­tained per­for­mance is at­trib­ut­able to the re­al­i­sa­tion of gains from the bold Trans­for­ma­tion Project that the bank has been im­ple­ment­ing since 2014 with a crit­i­cal fo­cus on im­prov­ing op­er­at­ing ef­fi­cien­cies, sales force ef­fec­tive­ness and in­no­va­tive cus­tomer de­liv­ery plat­forms,” man­ag­ing di­rec­tor Gideon Muriuki said at an in­vestor brief­ing in Nairobi.

The trans­for­ma­tion pro­gramme – Soar­ing Ea­gle – im­ple­mented by US con­sul­tancy McKin­sey, has seen more than 400 staff re­trenched as the lender digi­tises and au­to­mates its op­er­a­tions to en­hance its ser­vices.

Muriuki said the on­go­ing pro­gramme has im­proved its cost to in­come ra­tio to 47.1 per cent in Sep­tem­ber from 49.04 per cent in Sep­tem­ber 2015, and about 60 per cent in 2014. It tar­gets to im­prove this to 45 per cent to pro­tect mar­gins in the wake of in­ter­est con­trols touched off by Bank­ing (Amend­ment) Act 2016.

The 146-branch lender, how­ever, plans to open new branches tar­get­ing new shop­ping malls and coun­ties.

“We have bud­geted to have ad­di­tional branches, par­tic­u­larly in the up­com­ing malls,” Muriuki said. “It will be very dif­fi­cult to go to a county where you don’t have a phys­i­cal branch.”

/ ENOS TECHE

Co-op Bank MD Gideon Muriuki dur­ing the re­lease of the lender’s Q3 re­sults in Nairobi yes­ter­day

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