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Co-op Bank HY profit drops by 10pc to Sh6.6Bn, ventures into leasing business

NAIROBI, Kenya, Aug 17 – Co-operative Bank of Kenya has posted a 10 percent decline in its half year net profit to hit Sh6.6 billion from Sh7.4 billion recorded same period 2016.

The first-tier Bank attributes the decline to a 10.3 percent reduction in total interest income that went down from Sh21.47 billion to Sh19.26 billion with interest on loans and advances declining by 9 percent despite a 14.2 percent increase in net loans and advances.

Customer deposits grew 3 percent to Sh287.2 billion compared to Sh279.6 billion in the same period last year while Shareholders’ funds grew from Sh57.9 billion to Sh64.5 billion, a growth of 11.3 percent.

Total assets hit 383.3 billion compared to Sh363 Billion in the same period last year as expenses dropped by 17 percent. 

Foreign exchange income increased by 28.2 percent to Sh1.24 billion.

Co-operative Bank of South Sudan, a unique Joint Venture (JV) partnership with Government of South Sudan (Co-op Bank 51 percent and GOSS 49 percent) made a marginal loss of Sh60,000 in the period under review owing to hyperinflation occasioned by the devaluation of the South Sudanese currency.

At the same time, the bank has announced that it’s entering into a leasing business in partnership with Super Group Limited, an established global leader in leasing business based in South Africa and listed on the Johannesburg Securities Exchange.

The partnership has already received regulatory approval from the Central Bank of Kenya for the deal that will leverage on the opportunities in the growing Kenyan economy and the region.

The joint venture is targeting major infrastructure projects, government leasing, especially vehicles, exploration and mining activities including oil and gas as well as other sector demands including manufacturing, construction, transport, ICT among others.

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“The joint venture will also leverage on the support of the Co-operative movement with over 14 Million customers and over 22,000 co-operative societies. The joint venture is expected to substantially boast the bank’s strategy of diversifying revenues and is being operationalised immediately,” the Bank said.

Super Group has a market capitalization of over Sh100 billion and operates in five countries globally.

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