Co-operative Bank posted a net profit of KSh 14.3 billion at the close of financial year ended 31st December 2019, a 13 percent jump from KSh 12.7 billion recorded in 2018.
Ranked as one of the biggest lenders in Kenya, Co-op bank’s fees and commissions on loans to its vast customer base rose from KSh 575.9 million to KSh 3.2 billion in 2019. The net interest income increased to KSh 31.3 billion from KSh 30.8 billion.
The Group’s balance sheet size grew to KSh 457 billion from KSh 413.4 billion in the period under review. Interest on loans and advances declined to KSh 31.8 billion from KSh 32.9 billion the previous year.
Investment in the lucrative Government paper saw the bank’s earnings grow to KSh 11.4 billion from KSh 9.8 billion posted in 2018.
Customer deposits increased from KSh 306.1 billion to KSh 332.8 billion, signifying the lender’s ability to appeal to customers.
Co-operative Bank planned to hold its annual general meeting on 21st May, 2020 at the Bomas of Kenya, but the directive from the Capital Markets Authority will see the company move the AGM to a future date.
Co-op bank is in process of acquiring the loss-making Jamii Bora Bank (JBB) with an asset base of Ksh12.5 billion ($125 million). The proposed transaction, which is still subject to shareholders and regulatory approval, will see Co-op Bank acquire 100 per cent shareholding of JBB, which controls 0.21 percent of the market.
The Jamii Bora acquisition is set to increase Co-op Bank’s assets to Ksh462.5 billion ($4.62 billion). Analysts at AIB Capital Ltd however predict that the transaction may not have significant impact on Co-op Bank’s balance sheet.
“We don’t think the acquisition will add much to Co-op’s balance sheet. Jamii Bora’s market share stands at 0.21 percent and this is unlikely to have a material impact on Co-op,” said AIB Capital in a research note.