Co-op Bank’s after tax profit up by 21pc

Co-operative Bank of Kenya has reported a 21 per cent increase in profit after-tax in the first nine-months of the year, driven by rising interest income on loans.

The bank said on Thursday that its after-tax profit stood at Sh4.5 billion up from Sh3.7 billion reported in a similar period last year, making it the fourth most profitable lender in the country after Equity Bank, Kenya Commercial Bank (KCB) and Barclays Bank.

Increased lending saw its net interest income grow 38 per cent to Sh8.8 billion from the previous Sh6.37.

It also reaped from its strategy to have all staff open at least five new accounts every month and its agency banking network, after it reported a 57 per cent rise in customer numbers to 2.3 million.

This pushed up customer deposits by Sh20 billion to Sh137.7 billion — a 17 per cent growth.

Operating expenses increased by 20 per cent to Sh8.5 billion, rising at almost the same pace as its profits, up from Sh7 billion in 2010.

However, the bank is upbeat it will maintain profit growth into the last quarter, a signal that concerns of a slow-down of Kenya’s economy is unlikely to affect performance.

“The successful strategy of increasing our customer numbers, thereby increasing the transaction based incomes, is expected to drive our performance for the rest of the year,” said the bank’s managing director, Mr Gideon Muriuki.