The Co-operative Bank of Kenya has announced its profits for the first six months of 2020. The lender recorded 7.2 billion shillings in profits, a 4 percent decline as compared to the previous year.
According to the lender, the slight drop in profits as a result of higher provisioning for the expected credit losses on loan issuance in line with the IFRS-9 accounting standards.
The slight drop was also as a result of the risks that have been occasioned by the Covid-19 pandemic that has seen the lender restricting its loans to give customers a humble time to pay.
The loan loss provision in the last six months rose by 57.9 percent to 1.87 billion shillings from 1.18 billion shillings at the same time in 2019.
The total operating income for Co-operative Bank grew by 5 percent to 24.2 billion shillings from 23 billion shillings in 2019. At the same time, the interest income expanded by 12 percent to 15.9 billion shillings.
The balance sheet for the lender expanded with the loan book growing by six percent to 272.2 billion shillings. Deposits from the customers grew by 19 percent to 384.6 billion shillings.
“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.
At the same time, the Co-operative bank reported that it had restructured 39.2 billion shillings in loans to cushion its customers against the pains of Covid-19. The restructuring was in line with the call from the Central Bank of Kenya that wanted commercial banks to talk to their customers with loans and give them friendly payment terms.
Last week, the Central Bank of Kenya gave a go-ahead to the Co-operative Bank to own 90 percent of Jamii Bora Bank. The deal has already been finalized and set to start.