NAIROBI, Kenya, May 22, 2020 – Co-operative Bank Group has restructured loans and relied on its digital platform channels to record a 12.7 per cent growth in its net profit for the first three months of the year to KSh3.6 billion compared to the same period last year.
The Bank restructured loans worth KSh15 billion within the period to support customers mitigate the adversities of the global Covid-19 pandemic, according to financial results released on Thursday, May 21, reveal.
Considering that the many sources of income of the client base had been affected by the pandemic, the bank engaged customers seeking a longer repayment period, those in need of an interest moratorium period and those seeking additional funding to sustain operations during the pandemic.
For Quarter 1, 2020, the bank recorded a profit before tax of KSh5.1 billion. Profit after tax was KSh3.6 billion.
The fourth-largest bank in Kenya by asset base attributed the growth to its strong digital channels and a 12.5 per cent growth in operating income catapulted by activities of vibrant Sacco movement in the country.
Most Saccos paid dividends to members during the quarter under review. The bank has successfully moved almost 90 per cent of all customer transactions to alternative delivery channels and expanded 24-hour contact centre, mobile banking, 584 ATMs, internet, and over 16,700 banking agents through its multi-channel strategy.
The lender’s MCo-op Cash Mobile Wallet played a pivotal role in the growth of non-funded income with 5.6 Million customers registered and loans worth over KSh16 billion disbursed during the quarter.
In a statement, the bank acknowledged the impact of the pandemic on its operations, disclosing that it had prompted an accelerated shift towards digital channels.
“The group has put in place a comprehensive mitigation strategy intended to ensure full banking services continue being accessible to customers in a safe environment consistent with the Ministry of Health guidelines.
“In this regard, we continue to leverage our digital channels while ensuring that all branch outlets remain open to offer service, with due regard to health and safety of both customers and bank teams,” it read in part.
Total operating income grew by 12.5 per cent 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 per cent from KSh4.2 billion to KSh5 billion.
Net interest income increased by 8.5 per cent from KSh6.9 billion to KSh7.5 billion. Total operating expenses grew as well, increasing by 20.6 per cent to hit KSh7.3 billion from KSh6 billion on account of higher loan loss provision and staff expenses.
Notably, total assets also grew by KSh44.7 billion to KSh470.4 billion from KSh425.7 billion in the first quarter of 2019.
“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.
He added that the group has noted the historically unique operating environment occasioned by the pandemic, which has brought about unprecedented economic and social disruption throughout the world.
”In this regard, we continue to leverage our digital channels while ensuring that all branch outlets remain open to offer service, with due regard to the health and safety of both customers and bank teams,” Muriuki said.
In March, the Central Bank of Kenya approved the Group’s plan to acquire 100 per cent of Jamii Bora Bank Ltd whose total assets sit at KSh12.5 billion. This could see Coop Bank close its asset gap with third-placed NCBA, which on Wednesday reported asset growth to KSh509.6 billion in a quarter, ended March 31, 2020.
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