The Co-operative Bank of Kenya has posted a Kes 7.2 billion net profit for the first six months to June, a 3.6 percent drop from Kes 7.5 billion in a similar period last year on increased bad debt provisioning even as interest income grew.
Total operating income grew by five percent to Kes.24.2 billion from Kes.23 billion with net interest income expanding by 12 percent to Kes.15.9 billion.
The slight decline in earnings is attributable to the lender’s higher provisioning for expected credit losses on loan issuance in line with the IFRS-9 accounting standards and risks presented by the Covid-19 pandemic.
Co-op Bank has restructured loans amounting to Kes 39.2 billion since the country reported its first coronavirus infection case in mid-March and says that it is still actively considering customer applications on a case-by-case basis. Loan loss provisioning in the period rose by 57.9 percent to Kes.1.87 billion from Kes.1.18 billion last year.
The bank’s non-interest funded income further retreated by five percent to Kes.8.3 billion from Kes.8.3 billion.
Co-operative Bank’s Investment in government securities grew 29 percent to Kes 122.4 billion, helping it book a 12 percent interest growth to Kes 6.2 billion.
Co-op bank says a six percent growth in net loans and advances to Kes 272 billion and a 19 percent growth in customer deposits to Kes 384.6 billion during the period helped the business absorb some Covid-19 shocks.
