Co-op Bank posts Sh11.4bn profit
Co-operative Bank has posted a 10 percent drop in its full year profit to Sh11.4 billion down from Sh12.7 billion a year earlier.
The drop was occasioned by a reduction in interest income which dropped four percent to Sh40 billion.
Banks have been grappling under pressure from interest rate caps and a slowing economy that has seen individuals and businesses ability to repay loans drop.
For, Co-operative Bank this led to an increase of its nonperforming loans which stood at Sh17 billion from Sh10 billion a year earlier.
The bank was also hit by hyper inflation in South Sudan which saw it book a Sh603 million monetary loss.
Co-operative Bank group chief executive officer Gideon Muriuki said the bank is continuously adapting to the regulatory changes and will be strengthening its operations with the introduction of IFRS9 accounting.
“This is a very commendable performance against the backdrop of one of the most challenging operating environments that business had to contend with in the year with interest rate caps and lower economic growth in an election year,” Mr Muriuki said.
Despite the drop in profitability, Co-op Bank’s loan book expanded by Sh17 billion to Sh253.9 billion compared to Sh236.9 billion in the same period last year.
Interest income from government securities retreated by three per cent from Sh8.5 billion to Sh8.2 billion.
The board proposed a final dividend of Sh0.80 per share.