The Co-operative Bank of Kenya has announced a four percent decline in profit after tax through the first six months of the year to Ksh.7.2 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.
Loan loss provisioning in the period rose by 57.9 percent to Ksh.1.87 billion from Ksh.1.18 billion last year.
The bank’s non-interest funded income further retreated by five percent to Ksh.8.3 billion from Ksh.8.3 billion.
Total operating income grew by five percent to Ksh.24.2 billion from Ksh.23 billion with net interest income expanding by 12 percent to Ksh.15.9 billion.
Co-op further saw an expansion of its balance sheet in the period as its loan book grew by six percent to Ksh.272.2 billion while customer deposits widened by 19 percent to Ksh.384.6 billion.
The higher loan-loss provisions however lifted operating expenses to Ksh.14.6 billion from Ksh.12.6 billion last year.
“This strong performance is an affirmation of resilience of the business in view of the most challenging environment occasioned by the COVID-19 pandemic that has brought about by the unprecedented economic and social disruption globally, “said Co-op Bank CEO Gideon Muriuki.
The bank has further reported the restructure of Ksh.39.2 billion in customer loans to cushion against the ongoing pandemic
Co-op is expected to wrap up on its acquisition of Jamii Bora Bank (JBB) later this month following its capture of requisite approvals.