NAIROBI, Kenya, Nov 12 – Co-operative Bank has announced a 10 percent rise in pre-tax profits for the half year ending September 30.
The bank recorded Sh2.85 billion up from Sh2.59 in the corresponding period in 2008.
Co-op Managing Director Gideon Muriuki described the performance as commendable noting the challenging economic environment and the global downturn.
During the period under review, net loans and advances increased by 24 percent from Sh48.7 billion to Sh60.5 billion backed by diversified product lines and a competitive pricing mechanism. Non-funded income particularly fees and commissions constituted 40 percent of the bank’s revenue as interest income increased from Sh3.8 billion to Sh4.9 billion.
An extensive expansion program saw the bank’s operating expenses rise 16 percent to Sh5.37 billion from Sh4.6 billion. This year the bank has opened 19 branches mainly through application of a leasing option for new outlets.
“We found this one way of managing our costs as it’s cheaper and also tax efficient,” Mr Muriuki said.
Under its Sacco Link product, the bank invested in an ICT switch, enabling Sacoo members access to their money from any Co-op ATM. The bank projects to have 300,000 users by year end having issued over 140,000 cards.
Co-op plans on investing Sh200 million implementing the key Point of Sales Banking project as it broadens its branchless banking operations.
The bank acquired stock brokerage firm Kingdom Securities earlier in the year, appointing all bank branches as agents.
“This will bring the services closer to the common man especially over the six million members of the Sacoo movement that are the majority and strategic investor in the bank,” he said.
Going forward the bank still plans to enter Southern Sudan with five branches and is currently negotiating a strategic partnership with the co-operative movement in Uganda and Rwanda.