Profit before tax jumped 33 percent to hit Sh7.49 billion for the same period/FILE
NAIROBI, Kenya, Nov 15 – Co-operative Bank has announced a 32percent jump in quarter three profit, posting Sh5.91 billion for the nine months ended September 30, 2012.
Profit before tax jumped 33 percent to hit Sh7.49 billion for the same period.
The bank attributes the improved performance to the growth in non-funded income as well as transaction based fees and commissions from a sustained growth in the customers numbers to over 3.2 million account holders.
Managing Director Gideon Muriuki said an expanded branch and agency banking network and aggressive cost rationalisation also helped them record the profit.
“We continued with our strategy of managing costs focusing mainly on staff rationalisation which saw the redeployment of staff to the newly opened branches,” he said.
“Despite the significant growth and expansion in terms of branch network and ‘Co-op Kwa Jirani’ agents, operating costs increased only by 20 percent compared to a similar period in 2011,” he revealed.
He added that other cost areas are being consistently reviewed and monitored to ensure no cost overruns.
“In line with the new constitution and the county government structure, we grew our ‘ network to 107 branches, with over 4,000 active ‘Co-op Kwa Jirani’ agents,” he said.
“We’re targeting to close the year with over 5,000 agents and the agency banking service has greatly contributed to the non-funded income streams,” he added.
Muriuki explained that through their enhanced mobile banking platform, they have increased their active client base to almost one million customers.
“We have deepened our outreach through provision of wholesale financial services to over 500 Sacco FOSA outlets; that reach out to millions of unbanked Kenyans in the rural areas,” he added.
He revealed that using this model, the bank has currently issued over 516,000 Sacco link cards.
Total customer deposits increased to Sh156.8 billion compared to Sh137.7 billion in September 2011, an impressive growth of Sh19 billion representing 13.9 percent growth.
Muriuki noted that the Co-operative Bank of Southern Sudan is now a reality with the joint venture agreement with the Government of South Sudan having signed a 51:49 shareholding structure.
He confirmed that they expect to open the first branch in South Sudan early next year.
He acknowledged that the bank has widened its income streams by continuing to offer a universal banking model with a wide range of services which include; co-operatives banking, corporate/commercial banking, treasury, SME banking, micro credit, mortgage, asset financing and now banc-assurance.
Total interest income rose 30 percent to Sh18.6 billion from Sh11.29 billion in first half 2011.
The bank’s earnings per share rose to Sh1.41 from Sh0.96 and gross non performing loans (NPL) increased 2.91 percent. The bank’s total operating income increased 34.8 percent to Sh17.6 billion compared to the results released in June.
Net interest income increased by 36.7 percent to Sh11.7 billion for the period under review, while loans and advances grew by 32.9 percent to Sh16.5 billion.
Staff costs were up 34.2 percent, while other operating expenses increased by 35.8 percent over the nine month period.
