Co-op Bank's profit jumps 47pc to Sh17bn on increased revenue

The lender, majority-owned by co-operative societies, grew its revenues by 17.6 per cent to Sh52.2 billion in the review period from Sh44.4 billion in the third quarter of last year.

The results come on the backdrop of an economy battered by many shocks, including a drought that is ravaging various parts of the country.

The lender, which is listed on the Nairobi Securities Exchange (NSE), contributed Sh150 million to the fundraising appeal initiated by President William Ruto to support relief efforts aimed at assisting families affected by the severe drought.

It is the single largest contribution so far from any corporate organisation. Non-funded income, comprising fees and commissions, grew by close to a third to Sh20.2 billion from Sh15.7 billion.

Net interest income from loans grew by more than 11.7 per cent to Sh32 billion from Sh28.7 billion, as borrowers, most of whom had been affected by the Covid-19 pandemic, resumed servicing their loans.

Loan loss provision, or the money set aside as insurance against possible loan defaults, reduced from Sh6 billion to Sh5.7 billion during the review period, pointing to an improvement in the quality of the lender's asset book.

"Credit management remains a key focus area that has achieved key milestones," said Mr Muriuki, noting that the bank's cost-to-income ratio has since gone down from a high of 59 per cent in 2014 to 45.8 per cent in the review period.

Last year, the bank announced it had retained a global consulting firm to craft a credit risk adaptation project dubbed 'Project Kilele'.

Over the review period, the group's subsidiaries also grew their profitability, with Co-operative Bank South Sudan, a joint venture partnership with the government there, returning a profit of Sh190 million compared to a loss of Sh104 million in the third quarter of last year.

Kingdom Bank, formerly Jamii Bora Bank, also continued its recovery, recording a profit of Sh609.2 million in the third quarter, compared to a profit of Sh413 million in the same period last year.

Co-op Bank, Kenya's third-largest bank in asset size, saw its total assets grow by five per cent to Sh622.1 billion compared to Sh592.9 billion in the same period last year.

Though it did not announce an interim dividend, the bank is among the few lenders that consistently shared their profits with shareholders last year.