Business

Co-op Bank H1 net profit hits Sh7.5bn

Co-op Bank H1 net profit hits Sh7.5bn
  • Group Managing Director Gideon Muriuki said prudent cost management strategy and revenue diversification helped to deliver the growth in profitability.

Co-operative Bank’s net profit for the first six months of 2019 has grown 4.6 per cent to Sh7.5 billion, majorly supported by growth in non-interest income.

Total non-interest income, mainly from fees and commissions on loans and advances, increased by 25 per cent from Sh7 billion to Sh8.8 billion while interest income grew marginally to Sh20.45 billion from Sh20.2 billion.

Group Managing Director Gideon Muriuki said prudent cost management strategy and revenue diversification helped to deliver the growth in profitability.

“The group has continued with a strategy for continued deepening and dominance in our domain market segment while reviewing opportunities to grow alternative revenues from other services like bancassurance, and leasing business.,” said Mr Muriuki.

The strong growth in non-funded income helped to grow the top line despite the sluggish growth in total interest income.

Its all-telco Mco-op Cash mobile wallet was a key driver in growing non-funded income by disbursing loans worth Sh14.4 billion as at the close of half-year under review. The wallet has more than 4.6 million registered customers.

Its South Sudan joint venture in which it owns 49 per cent stake made a before-tax profit of Sh93 million, which was a 19 per cent drop compared to Sh115 million posted in the half-year of 2018.

The results helped Coop to remain the third most profitable lender after Equity and KCB Group which posted Sh11.92 billion and Sh12.7 billion net profit respectively during the period.

NIC Bank, which is working on a merger with Commercial Bank of Africa, with the hope of outpacing Coop on bottom-line, saw a 4.2 per cent drop in profit to Sh1.9 billion.