Co-op Bank of Kenya has posted a Net Profit of KSh 11.6 Billion in the nine months period ending September 30th, 2021 compared to net earnings of KSh 9.8 Billion over a similar period last, an improvement of 18.4%. The lender’s earnings were boosted by an increase in loans to customers as well as an improvement in customer deposits.
Co-op Bank of Kenya had its Net Loans to Customers increase to KSh 306.3 Billion in Q3, 2021 from KSh 284.2 Billion in Q3, 2020 as individual families and businesses, including the lender’s catchment of the Co-operatives sector, experienced an accelerated recovery from effects of the pandemic in the third quarter of 2021.
The lender’s Balance Sheet size increased to KSh 592.9 Billion in Q3, 2021 from KSh 510.9 Billion at the end of the third quarter of 2020. Co-op Bank of Kenya’s Customer Deposits rose to KSh 420.4 Billion from KSh 375.5 Billion during the period under review.
Co-op Bank of Kenya Comprehensive Income Statement
Income from loans to customers, government securities as well as deposits with other banking institutions increased to KSh 39.6 Billion in Q3, 2021 from KSh 32.5 Billion over a similar period last year. Non-interest income from fees and commissions, forex trading and dividends as well as others increased from KSh 13.6 Billion to KSh 15.7 Billion during the period under review.
Loan Loss provisions increased to KSh 6 Billion from KSh 4 Billion while Gross Non-Performing Loans edged up to KSh 48.5 Billion in Q3 2021 from KSh 40.2 Billion in Q3, 2020.
The lender’s net NPL exposure declined significantly to KSh 204.9 Million in Q3 2021 from KSh 6 Billion in Q3, 2020. The profitability of the lender, as measured by the Basic Earnings per Share(EPS) improved to KSh 1.98 in Q3, 2021 from KSh 1.67 in Q3, 2020.
Analysts at AIB-AXYS Africa Research maintain that improved performance at Co-op Bank Kenya was mainly driven by an increase in Interest Income from government securities.
“We take note of the increase in Loan loss provision contrary to our expectations and what has been observed with other banks. We expect the bank’s performance to be driven by focus on SME lending and digital channels. Improving economic condition and better performance from subsidiaries will boost asset quality recovery.” said the COOP Bank Earnings Note.
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