Customers line up at a Cooperative Bank ATM. [Photo: Bankelele]
Co-operative Bank has posted a decline in net profit to Sh9.5 billion in the third quarter of 2017, down from Sh10.5 billion reported in the same period last year.
The bank has attributed the decline to a tight operating environment fueled by the capping of interest rates and the slowdown in the economy due to a prolonged political season.
The bank recorded a 7.7% decline in total interest income to Sh 29.9 billion in quarter three of 2017, down from Sh32.3 billion recorded in the same period in 2016.
The bank's net profit reduced to Sh9.5billion in the third quarter of 2017, down from the 10.5 billion shillings the bank reported in the same period last year.
Despite the decline in net profit, however, the bank’s South Sudan subsidiary recorded a Sh30 million profit in the period under review despite the tough operating environment.
In the period, the bank's total assets grew 9.7 percent to Sh 388.3 billion shillings; customer deposits grew 12.1 percent to Sh289 billion while shareholders’ funds grew 13.8 percent to Sh67.3 billion.
The bank attributes the growth in shareholders’ funds to a steady growth in earnings retention and a dividend policy anchored on progressive growth.
The bank’s total operating expenses increased marginally to Sh17.25 billion while the total operating income reduced by 4.3% to Kshs 30.9billion down from Sh 32.3 billion in the same period in 2016.
Despite the 14.2% increase in net loans & advances, however, interest income from loans & advances declined by 6.9%.
Riding on its multi-channel strategy the bank says it has successfully moved 86% of customer transactions to alternative delivery channels particularly mobile banking, ATMs, internet and Co-op Kwa Jirani bank agency outlets.
The bank plans to leverage on its strong balance sheet, solid customer base, and a wide range of service channels, robust ICT framework and a skilled team to grow its business.