Cooperative Bank, Kenya’s fourth-largest bank by assets, has reported a 4% dip in its net profit in the first quarter of this year compared to the same period in 2020. The bank’s profit after tax declined to KSh3.46 billion on 31st March 2021 from KSh3.59 billion on 31st March 2020 as the provisions for loan losses increased in the period under review.
In the first quarter of this year, Cooperative bank set aside KSh2.28 billion for potential loan losses, a 154% increase from the KSh900 million set aside in the first quarter of 2020.
Coop bank’s main source of revenue, interest income, rose 28% to KSh13.45 billion in the first three months of 2021 from KSh10.54 billion a year earlier. However, non-interest income fell by 9% to KSh4.52 billion from KSh4.98 billion in March last year.
In August 2020, Cooperative bank acquired 90% ownership in Jamii Bora bank at a cost of KSh1 billion. The value of the lender’s assets grew to KSh553 billion at the end of March 2021, from KSh470 billion in March 2020 before the acquisition. The bank’s liabilities also went up to KSh458 billion at the end of the first quarter of 2021 from KSh387 billion in the first quarter of 2020.
Coop bank recorded a sharp rise in the level of bad debt as borrowers struggled to repay their loans. Gross non-performing loans grew to KSh52 billion in the first three months of 2021, a 63% jump from KSh32 billion posted in the first three months of 2020.
Also read: Coop Bank Shareholders Approve Jamii Bora Takeover
