Co-op Bank Net Profit Grows to Sh12.1 Billion in Half Year Ended June

Co-operative Bank of Kenya (Co-op Bank) recorded a 5.8 percent increase in its net profit to Sh12.1 billion for the half-year period ended June 2023. This growth was driven by an expansion in the bank’s loan book and investments in government debt securities, despite a significant rise in interest expenses.

The bank’s total interest income increased by 11.9 percent to Sh31.9 billion, fueled by a 10.7 percent growth in its loan book to Sh365.3 billion. Additionally, Co-op Bank’s investment in government debt securities grew from Sh183.1 billion to Sh188.4 billion, contributing to the rise in interest income.

Co-op Bank’s non-interest income also increased by 3.9 percent to Sh13.8 billion, partly driven by transactions on its mass-market mobile wallet, MCo-op Cash. The platform had five million registered customers and disbursed Sh41.3 billion in loans during the review period, averaging Sh6.9 billion per month.

Despite these positive developments, Co-op Bank’s interest expenses surged by 38.9 percent to Sh10.4 billion. This increase was attributed to growth in customer deposits amid rising interest rates on various assets, including fixed deposits. To support its lending activities, the bank’s customer deposits grew by Sh40.8 billion to Sh463.8 billion, bolstering its funding sources.

Co-op Bank’s subsidiary, Kingdom Bank, in which it holds a 90 percent stake, also saw its net profit rise by 28.6 percent to Sh521.9 million. Co-op Bank acquired Kingdom Bank in 2020 through a Sh1 billion rescue deal orchestrated by the Central Bank of Kenya, turning around the lender’s fortunes from heavy losses to profitability.

Overall, Co-op Bank’s financial performance demonstrates its resilience and ability to adapt to changing market conditions. The bank’s strategic focus on sustainable growth and its commitment to customer-centric solutions have positioned it well for continued success in the Kenyan banking sector.

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