Co-op Bank Group profit after tax increased to Ksh 17.1 Billion as of the close of the third quarter ending in September 2022. This is a 47.0% increase from Ksh 11.6 Billion at the end of September 2021.
The lender’s balance sheet size grew by 4.9% to Ksh 622.1 Billion in Q3, 2022 from KSh 592.9 Billion in Q3 2021. This growth was propelled by a 9.4% growth in net loans to customers which increased to KSh 335.2 Billion in Q3 2022 from KSh 306.3 Billion at the end of September last year.
Following a peaceful August 2022 General Elections, the lender cut down on its investments in less risky Government Securities by 5.7% to KSh 182.4 Billion at the end of September 2022 from KSh 193.3 Billion over a similar period last year as the Bank shifted its lending away from Government paper following an improved business environment.
Coop Bank Group Profit before tax and exceptional items rose by 37.9% at the close of September 2022 to KSh 22.7 Billion, from KSh16.5 Billion at the end of September 2021.
Gross Non-Performing Loans(NPLs) increased 4.70% to KSh 51.81Billion from KSh 49.5 Billion in September last year while the NPL ratio declined to 13.96% (below the latest industry average of 14.20%) owing to a faster loan book growth.
However, the NPL ratio reduced to 14.0% in Q3’2022, from 14.6% in Q3’2021, owing to the 9.5% growth in gross loans to KSh 371.1 Billion, from KSh 338.7 Billion in Q3’2021, which outpaced the 4.7% increase in gross non-performing loans.
Experts attribute this improvement in the lender’s asset quality to Kenya’s continued economic recovery, improved business environment as well as the Group’s proactive credit management strategies,
Kingdom Bank, a subsidiary of Coop Bank Group, had its Gross NPL declining 13.20% to KSh 5.55Billion to further support the Group’s asset quality.
Total Shareholders’ funds-what owners of the bank would get if the business is liquidated, increased by 6.2% to KSh 100.9 Billion in September 2022, from KSh 95.0 Billion in Q3 2021, mainly driven by an 18.5% increase in the retained earnings to KSh 101.0 Billion, from KSh 85.2 Billion in Q3 2021.
Coop Bank Group’s Interest income rose by 10.5% to KSh 43.7 Billion in Q3 2022, from KSh 39.6 Billion in Q3’2021 driven by a 9.6% increase in interest income from loans and advances to KSh 27.9 Billion, from KSh 25.4 Billion in Q3’2021, coupled with a 12.5% increase in interest income from government securities to KSh 15.5 Billion, from KSh13.8 Billion in Q3 2021.
The lender’s Yield on Interest-Earning Assets declined by 0.1% points to hit 11.4%, from 11.5% in Q3’2021 as a result of a faster 7.8% growth in the average interest-earning assets, which outpaced the 7.0% growth in trailing interest income.
Non-Interest income was up 28.25% to hit KSh 20.17 Billion pushed up by improved forex trading income which grew by a 71.58% as well as 31.7% growth in fees and commissions.
Analysts expect Coop Bank Group growth to be propelled by channel diversification which will increase usage, traffic and generate more profit
As at the end of June 2022, Coop Bank Group had already transferred 94.0% of all its customer transactions to alternative channels such as internet and mobile banking.
The lender’s focus on branch transformation and innovation centered on alternative channels is expected to drive Non Funded Income growth and also transform branches to handle advisory, wealth management and advisory services.
Coop Bank Group is also expected to focus on MSME lending better subsidiary performance and digital channels where the average MCoop cash mobile loan per month has improved to KSh 6.90Billion from KSh 6.00Billion last year.
