The Co-operative Bank of Kenya has announced its 2016 financial year results registering a 15 percent increase in profits before tax over the 2015 results.
The lender witnessed a profit before tax of 17.7 billion shillings for the year ending 31st December 2016, being an improvement from 15.4 billion shillings recorded in 2015.
The profit after tax stood at 12.7 billion shillings in 2016 up from 11.7 billion shillings recorded in 2015 with this being 8.5 percent growth.
According to the lender, the institution’s transformation agenda has enhanced their cost to income ratio from a high of 59 percent in 2014 to 52.1 percent in 2016.
Total interest income on the other hand grew by 15 percent from 36.8 billion shillings to 42,3 billion shillings on account of; interest income from government securities growth by 40 percent from 6.1 billion shillings to 8.5 billion shillings and interest income from loans and advances growth by 11 percent from 30 billion shillings in 2015 to 33.4 billion shillings in 2016.
Total interest expense reduced by 6 percent from 13.6 billion shillings to 12.8 billion shillings on account of lower cost funding while the total operating income grew by 16 percent from 36.4 billion shillings to 42.3 billion shillings.
According to the financial statement released by the bank, the total assets grew by 9.5 billion shillings or 3 percent to 352 billion shillings compared to 342.5 billion shillings at the same period last year. The net loans on the other hand grew by 23.5 billion shillings or 11 percent to 236.9 billion shillings compared to 213.4 billion shillings recorded at the same period in 2015.
Total deposits declined slightly by 2 percent from 268.8 billion shillings to 263.6 billion shillings while the shareholders’ funds grew from 50.2 billion shillings to 61.3 billion shillings this being a growth by 22 percent. According to the Board of Directors, the shareholders will receive a 0.80 shillings per every ordinary share held and a dividend and a bonus share issue of one share for every 5 shares held.
Co-operative Bank of Kenya becomes the first bank to record an increase in profits even with the prevailing interest capping law that has affected profits across the banking sector in Kenya.