NAIROBI, Kenya, May 18 – Cooperative Bank Kenya has posted a six percent drop in their first quarter of 2017 net profit to Sh3.2 billion from Sh3.4 billion recorded in 2016.
Management attributes the decline to a tighter operating environment especially with the capping of interest rates and currency devaluation and hyperinflation in South Sudan operations.
Total interest income reduced by 10.8 percent from Sh10.7 billion in the first quarter of 2016 to Sh9.5 billion in the first quarter of 2017.
Interest income from loans and advances also declined by 7.7 percent despite the15 percent increase in net loans & advances to Sh245.9 billion.
Total assets grew by 7.9 percent to Sh378.5 billion compared to Sh350.7 Billion in the same period last year while Customer deposits grew by 6.9 percent to Sh279.8 billion compared to Sh261.7 billion in the same period last year.
The Banks’ South Sudan subsidiary that is a unique Joint Venture (JV) partnership with Government of South Sudan made a loss of Sh34.7 Million in the period under review owing to hyperinflation occasioned by devaluation of the South Sudanese currency.
“The massive investments in the economy in terms of infrastructure, ICT, Energy Generation and Human Capital has seen the economy attract increased inflows of Foreign Direct Investments.”
“Co-op Bank is well positioned to ride on the expected upswing of the economy after the August elections leveraging on our strong balance sheet, a cost effective operating structure and a highly motivated team,” the firm stated.