Co-op Bank Group has recorded a profit before tax of Kshs. 4.98 billion compared to Kshs. 5.12 billion recorded last year before the COVID-19 pandemic.
The 2.6% profit drop recorded during the first three months of the year ending March 2021 is attributed to the higher loan loss provision according to Group Chief Executive Dr Gideon Muriuki.
During the period, the lender increased loan loss provisions to Kshs. 2.3 billion to support businesses and households affected by the COVID-19 pandemic.
“We continue to actively engage our customers to support them through this period, by re-aligning the servicing of facilities, funding and transactional needs as the situation unfolds. A total of Kshs. 49 billion in loans have been restructured to support customers impacted by the pandemic,” said Dr. Muriuki.
The lender says it has since commenced decentralizing its loan portfolio management to branches, lending units and relationship management teams to enhance loan recovery efforts.
Co-op Bank added Kshs. 22 billion in its loan book which grew to Kshs. 298.2 billion representing 8% gain as net interest income grew by 31% from Kshs 7.5 billion to Kshs 9.8 billion.
“Total non-interest income declined by 9% from Kshs 4.98 billion to Kshs 4.52 Billion on account of fee waivers in support of our customers and the general economic slowdown,” Dr Muriuki added.
The bank disbursed loans worth Kshs. 16.3 billion to some of its 5.1 million customers on Mcoop Cash mobile wallet over the period.
Customer deposits grew by 16% from Kshs. 340 billion recorded during the same period last year to Kshs 393.8 billion.
Investment in Government securities grew 43% to Kshs. 166.2 billion compared to Kshs. 115.9 billion in 2020.
To support its SME loan book, the lender borrowed Kshs. 19.5 billion from development partners during the first three months, a 71% increase to 46.9 billion.
On the other hand, shareholders’ funds grew 14% to Kshs. 93.7 billion from Kshs. 82 Billion in 2020.
Co-op Bank however suffered monetary loss amounting to Kshs. 89.1 million from its South Sudan subsidiary on account of hyperinflation accounting due to currency devaluation of local pound.
Going forward Dr Muriuki says the bank has embarked on a proactive mitigation strategy anchored on a strong enterprise risk management framework, to enable uninterrupted access to banking services.
“We shall, riding on the unique synergies in the over 15 million-member co-operative movement that is the largest in Africa, continue to pursue strategic initiatives that focus on resilience and growth in the ‘New Normal’ as the Nation focuses on flattening the curve and as vibrancy returns to the Economy.”
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]