NAIROBI, Kenya, Mar 10 – The Co-operative Bank of Kenya has posted a 55 percent growth in its net profit recording Sh4.59 billion in its 2010 full year results.
The results beat the Sh.297 billion the bank realised in 2009.
Briefing investors on Thursday, Co-operative Bank Group Managing Director Gideon Muriuki attributed the strong performance to growth in the bank\’s balance sheet.
During the year, total customer deposits grew by 35 percent to Sh123.9 billion compared to the Sh91.5 billion realised a year earlier. The bank\’s loan book increased to 86.6 billion representing 39 percent growth from Sh62.3 billion recorded in 2009.
This led to Sh9.19 billion realised in net interest income, compared to Sh6.77 billion a year earlier.
"What we liked about our performance is based on balance sheet growth. We focused on growing our loan, assets and liabilities books and we believe it will be sustainable growth in the years to come," Mr Muriuki said.
Non-funded income increased to Sh6.48 billion compared to Sh4.95 billion representing 31 percent growth mainly from fees and commissions.
The MD also noted that the bank\’s strategy to diversify its product lines and introduce a competitive pricing mechanism paid dividends in growing its profits.
"The bank continued with its growth plans and was able to boost the lines of income thus sustaining profit growth," Mr Muriuki said.
Co-operative Bank employs a universal banking model where it operates insurance, investment, consultancy and stock brokerage businesses.
In 2010, CIC Insurance (in which the bank holds a 21 percent controlling stake) contributed Sh130 million to the group\’s profits. Kingdom Securities generated Sh37 million while Co-optrust Investments Services contributed 57 million to the group\’s profit.
Co-op Consultancy services realised a Sh11 million loss, but Mr Muriuki said the company would turn around in 2011 as it focuses more on Saccos.
Co-operative Bank joins the list of Kenyan banks posting impressive results. Kenya Commercial Bank posted a 56 percent rise in pre-tax profit reporting Sh9.8 billion, NIC Bank pre-tax profit leapt 71 percent to Sh2.6 billion while Equity Bank reported Sh9.04 billion in gross profits.
During the year the bank\’s customer base grew by 60 percent to 1.6 million from one million customers. It also opened 35 new branches, spreading its network to 88 outlets.
"Our expansion strategy will target locations exhibiting high business potential key to growing our deposit base and transaction income," the MD said.
With the introduction of agency banking Co-op Bank will leverage on co-operative societies, with Mr Muriuki saying a number of agents had already been approved by the Central Bank.
Regionally, the bank says it is likely to complete its entry into Southern Sudan within the year.
Mr Muriuki said they were also in talks with the co-operative movements in Uganda and Rwanda with a keen eye on venturing into those regions later.
The bank\’s board has proposed a dividend payout of Sh0.40 per share up from Sh0.20 in 2009.
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