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