Coop Bank's Q1(3 months) net profit rises 6pc to Sh3.4bn on higher lending - This is higher that CRDB annual profit

Coop Bank's Q1(3 months) net profit rises 6pc to Sh3.4bn on higher lending - This is higher that CRDB annual profit

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Co-operative Bank of Kenya (Co-op Bank) has announced a 6.25 per cent rise in net profit for the three months ended March, buoyed by increased lending.

The bank’s net profit for the quarter stood at Sh3.4 billion, compared to Sh3.2 billion in the first quarter of last year.

Co-op Bank’s net interest income rose by 9 per cent to Sh7.4 billion, while interest earnings from government securities also increased by 13.4 per cent to Sh2 billion.

The lender attributed the performance to a “gradual economic recovery” from a tough operating environment witnessed last year.
This is a very commendable performance as the operating environment gradually recovers from the significant headwinds that business had to contend with in the aftermath of the 2017 Elections,” said Cooperative Bank's chief executive officer Gideon Muriuki in a statement.

Total non-interest income grew by four per cent in the period under review, to Sh3.52 billion compared to Sh3.39 billion in quarter one 2017.

Customer deposits grew 6.5 per cent to Sh299.9 billion, which saw its interest expenses rise 5 per cent to Sh2.97 billion.

READ: Equity ranked best bank in Kenya

READ: Co-op Bank’s Gideon Muriuki raises stake in CIC

Sh7bn loan book growth

The top tier lender recorded a 2.85 per cent or Sh7 billion growth in its loan book to Sh252.8 billion during the quarter.

The lender’s loan loss provisions remained stood at Sh762 million up marginally by 1.6 per cent from Sh750 million posted last year with its non-performing loan portfolio, however, rising by 152.6 per cent to Sh28.3 billion.
Operating expenses rose 3.45 per cent to Sh6 billion.

The lender said its long-term debt fell 14.9 per cent to Sh20.7 billion.

Mr Muriuki said the lender would leverage on its digital channels to boost profitability.

“The group will continue to leverage on the growing 7.2 million account-holder base, digital banking focus, the basket of innovative financial solutions, efficient delivery of services and multichannel access to retain market position and deliver business growth and profitability in the days ahead,” he said.

IFRS9 standards

Co-op Bank is the fifth lender after KCB, Equity Bank, Stanbic Bank and NIC to report its first quarter results that capture the impact of the more conservative accounting rules, dubbed IFRS 9, which came into force at the beginning of the year and were expected to raise provisions for bad debt through anticipation of defaults.

Kenyan banks will take a full hit from provisions for new loans issued in 2019 and beyond after the Central Bank of Kenya (CBK) refined its capital waiver rules that has mitigated the impact of IFRS9 in the short term.

The banking sector regulator says incremental provisions – limited to good loans outstanding as of December 31, 2017 and those issued this year — may be added back to earnings for purposes of computing core capital.

“All provisions under the expected credit loss (ECL) model for facilities/loans issued after 2018 shall not be added back for purposes of computing regulatory capital,” the CBK said in a circular.
Coop Bank Q1 profit rises to Sh3.4bn
 
wow was also googling COOP this is one. mega bank that is really underestimated my guess is this is larger than even equity or KCB i stand to be corrected. coop should rebase their market value
 
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