Co-op Bank pre-tax profit jumps 48 pc

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By James Anyanzwa

The Co-operative Bank of Kenya has registered a 48 per cent growth in pre-tax profits for the full year ending December 31.

The 40-year-old bank whose shares started trading at the Nairobi Stock Exchange barely three months ago recorded a staggering Sh3.4 billion in profits before tax up from the previous year’s Sh2.3 billion.

Earnings Per Share jumped 29 per cent to Sh0.67 up from Sh0.52 weathering off the mounting volatility in both local and global financial markets.

“The year was extremely challenging, but our confidence and unrivalled strategic planning provided an unshakable base on which to thrive,” Gideon Muriuki, the bank’s Managing Director told The Standard at the bank’s headquarters in Nairobi yesterday.

Muriuki attributed the bank’s performance to the tremendous growth and diversification of its income streams, which resulted in an overall growth of total earnings by 17 per cent to Sh9.7 billion.

According to the bank’s financial statements, the first ever since listing at the bourse on December 22 last year, interest income surged 27 per cent to Sh7.42 billion up from Sh5.85 billion, mainly due to the bank’s competitive pricing mechanism, while non-interest income advanced 15 per cent to Sh3.955 billion from Sh3.43 billion in a similar period.

Growth in revenue

Muriuki attributed the growth in non-interest income to forex trading, trade finance, institutional banking, electronic payment services and transaction based commission income. Total operating expenses — interest expenses and other operating expenses — rose 16 per cent to Sh3.7 billion from Sh3.2 billion in 2007.

The deposits for the bank’s 800,000 customers climbed 20 per cent to Sh65.8 billion from Sh54.7 billion while its loan book increased 39 per cent to Sh53.3 billion over a similar period riding on an aggressive sales strategy.The bank’s total asset base grew 28 per cent to Sh83.8 billion from Sh65.7 billion.

The non-performing loans as a percentage of gross advances, however, declined despite a rise in advances due to persistent risk management framework implemented amid inflationary increases and economic slowdown.

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