Cooperative bank made 7.2 billion shillings in net profit during the first six months of this year, representing a 3.6 percent reduction that the lender blames on higher loan loss provision occasioned by the outbreak of the COVID-19 pandemic.
Group CEO Gideon Muriuki says the lender has restructured loans worth 39.2 billion shillings in support of customers affected by the COVID-19 pandemic and increased loan loss provision by 57.9 percent to 1.87 billion shillings.
Since the first coronavirus case was reported in Kenya and with the advice from the central bank in April, cooperative bank says it has restructured loans worth 39.2 billion shillings top cushion borrowers from hard economic times occasioned by the tough business environment due to the adverse effects of the COVID-19 pandemic.
The loan loss ate into the lender’s first half profitability that dipped marginally by 300 million shillings or 3.6 percent to 7.2 billion shillings.
Of this, the lender’s subsidiary in South Sudan made 102.6 million shillings, Co-op Consultancy & Insurance Agency made 387.8 million shillings while Co-op Trust Investment Services contributed Kshs. 47.1 million shillings in pretax profit.
To minimize the spread of the Coronavirus, the bank digitized 90 percent of operations with the lender disbursing 27.4 billion shillings worth of loans during the period electronically.
Customer deposits grew 19 percent to 384.6 billion shillings with the bank’s asset base hitting 513.9 billion shillings.
Commenting on the 90 percent acquisition of Jamii Bora Bank, Group CEO Gideon Muriuki said the deal offers Co-op Bank an opportunity to cross-sell and deepen product offering to the enhanced customer base and offer specialized credit offerings for MSMEs, Microfinance, Youth & Women, Asset Finance and Leasing.
Going forward, Muriuki says the lender has put in place a proactive mitigation strategy anchored on a strong enterprise risk management framework for uninterrupted access to banking services.