The Cooperative Bank of Kenya has reported a Kes. 9.8 billion in net profit during the first nine months of this year, representing a 10 percent reduction in earnings which the lender attributes to increased COVID-19 related loan loss provisions.
Cooperative Bank booked a 95 percent increase in loan loss provision from Kes. 2.1 billion in 2019 to Kes. 4 billion pushing the lenders total operating costs to Kes.32.4 billion from Kes.28.7 billion.
Group CEO Gideon Muriuki in a statement said in appreciation of the challenges that businesses and households are grappling with from the disruption occasioned by the ongoing pandemic led to the Group’s increment in loan loss provision.
“As at the close of the third quarter, a total of 46 Billion shillings in loans have been restructured to support customers impacted by the pandemic.”
Confirmation of the first corona virus case saw the government recommend social distancing and work from home for non-essential workers.
This affected income generation that saw the central bank among others recommend that commercial banks allow borrowers facing difficulties in repaying their loans to restructure them.
This has come to haunt banks that have been reporting steady increases in non-performing loans that has affected profits.
Co-op Bank says fortification of digital channels to support uninterrupted access to banking services by customers continues with over 90 percent of services now on alternative banking channels.
Total Assets in the period under review grew by Kes. 70.1 billion to Kes. 510.9 billion compared while net loans and advances rose by Kes. 15.4 billion to Kes. 284.2 billion.
The lender’s subsidiary, Co-operative Bank of South Sudan made a pretax profit of 217.8 million shillings.