By Stanley Wabomba
Co-operative Bank made 7.41 billion shillings in net profit during the first six months of this year driven by improved operating efficiencies and innovative customer delivery platforms.
The profit represents a 19 percent growth on the 6.24 billion shillings that the bank made during a similar period last year.
Chief Executive Officer Gideon Muriuki says the bank’s innovative financial solutions coupled with efficient delivery of services will drive an increase in profitability going forward.
Cooperative bank attributes the 19 percent increase in net profit to 7.41 billion shillings during the first six months of this year to the ‘Soaring Eagle’ Transformation Project that the bank has been implementing since 2014.
The bank says the project has driven cost optimization, improved operating efficiencies and fueled innovative customer delivery platforms.
Muriuki says implementation of the ‘Soaring Eagle’ Transformation Project has led to branch transformation and channel migration with 87 percent of Cooperative Bank’s transactions moved to alternative channels such as mobile banking, ATMs, internet and Co-op Kwa Jirani banking Agency outlets.
This is in addition to enhancing credit management systems and processes to ensure a quality loan book. During the period under review, total interest income rose 29 percent to 21.5 billion shillings supported by an 11 percent growth in earning assets.
Total interest expense rose 43 percent to 7.01 billion shillings fueled by increased cost of funding.
During the second quarter of this year, the bank’s South Sudan subsidiary contributed 29.22 million shillings in profit to the Group’s bottom line.
Muriuki says Cooperative Bank’s regional expansion strategy will involve similar Joint Venture models in other neighboring countries such as Rwanda, Uganda, Tanzania and Ethiopia.
The regional expansion would be undertaken within the next five years. He projects increased profitability going forward driven by the banks’ 6 million account-holders, multichannel access, innovative financial solutions, and efficient delivery of services.