Co-operative Bank Group on Thursday declared a 12.4 per cent increase in net profit compared to Sh14.3 billion last year.
The bank attributed the growth to strong growth in non-interest income.
Total non-interest income increased by 33 per cent from Sh12.8 billion to Sh17.3 billion, keeping it in growth momentum with its tier I peers like KCB Group .
Co-operative Chief Executive Officer (CEO) Gideon Muriuki said its mobile wallet, M-Co-op cash. was instrumental in the growth of non-funded income as registered customers hit 4.8 million, helping it disburse loans valued at over Sh43.1 billion as at end of December 2019.
“The group has continued with a strategy for continued deepening and dominance in our domain market segment leveraging on our successful penetration of the micro, medium and small enterprises (MSMEs) and the Saccos, while reviewing opportunities to grow alternative income streams,” said Mr Muriuki.
The growth in its bottom-line was further supported by 1.4 percent growth in total interest income to Sh43.64 billion even as loan book expanded by 8.7 percent to Sh266.71 billion.
Interest income from government securities was up 16 percent to Sh11.35 billion as investment in government paper grew by 46.8 percent to Sh117.8 billion.
Interest expense rose marginally by Sh96 million to Sh12.34 billion. This was despite an 8.6 percent growth in deposits to Sh332.82 billion indicating higher demand deposits.
In the year under review, operating expenses grew eight percent to Sh27.8 billion on account higher provisioning for non-performing loans (NPLs).
The provisions jumped 38 percent to Sh2.5 billion even as gross NPLs rose 7.3 percent to Sh31.6 billion.
Co-op said over 70,000 customers have taken up its MSMEs loan packages launched in 2018 and has so far disbursed over half (Sh8.05 billion) of Sh15.2 billion earmarked for the program.
The board has recommended dividends of Sh1 per share, amounting to Sh5.86 billion. The payout will be the same as that of 2018.
