The Co-operative Bank of Kenya (Coop Bank) has posted a reduced profit of Sh3.46 billion in the first quarter of this year owing to the negative effects of the Covid-19 pandemic.
This represents a drop of 3.6 per cent compared to a profit after tax of Sh3.59 billion that the lender made in the first three months of 2020. The lender put aside a big chunk of its revenue as insurance against possible defaults.
“The group prudentially increased loan-loss provisions to Sh2.3 billion in the first quarter of 2021 in appreciation of the challenges that businesses and households continue to face due to the economic effects of the pandemic,” said Co-operative Bank Chief Executive Officer Gideon Muriuki.
This even as Moody’s, a global rating agency, affirmed the listed lender’s B2 rating citing “solid capital levels.”
In the three months of this year, the lender recorded increased revenues from its lending activities with its net interest income growing by over a third from Sh7.5 billion to Sh9.8 billion. The lender’s total revenue – interest and non-interest income – grew by 15 per cent to Sh14.4 billion from Sh12.5 billion, a sign that despite the ravages of the pandemic, a good number of the borrowers were able to service their loans.
Non-interest income declined nine per cent to Sh4.52 billion following the fee waiver on mobile banking fees.
However, last month members of Savings and Credit Co-operative Societies (Saccos) started paying a fee for using the Co-op Bank’s digital wallets such as Co-op Cash.
The move was aimed at compensating the owners of the technology who are normally third parties. Co-operative Bank is majority-owned by Saccos.
