Co-op Bank posts a 2.5% increase in pretax profit

by Elayne Wangalwa 0

The bank’s profit before tax rose by 2.5 per cent to 9.13 billion Kenyan shillings for the nine months ended 30 September 2014 in comparison to 8.91 billion Kenyan shillings posted in a similar period last year.

This slight improvement is as a result of the growth in the lenders asset book, interest income and non-funded income segment.

Co-op’s total assets plummeted 18.3 per cent to 270.6 billion Kenyan shillings, while the net interest income increased to 20.86 billion Kenyan shillings compared to 19.16 billion Kenyan shillings recorded the previous year.

Buoyed by its mobile money banking services, ATM commissions, personal and business banking commissions, among others, the lender’s foreign exchange commission grew by 13.5 per cent leading to the 23.8 per cent growth of the non-funded income segment to 8.45 billion Kenyan shillings.

The third largest bank in Kenya by asset-size, has seen its branch network in the East African country grow to 142 branches having opened two additional branches in the third quarter and two in South Sudan. The firm’s net loans and advances grew by 31 per cent to 175.97 billion Kenya shillings while customer deposits grew by 11 per cent.

Earlier in the month, the lender received an international information security standard and certification, making it the first bank in East Africa to achieve the certification.

In September, the bank hired McKinsey & Company to guide it on its next phase of growth. The three month engagement will see it emerge as a more efficient player in the industry.

(READ MORE: Co-op bank Kenya brings McKinsey on board to steer growth plan)

Recommendations by the New York-based consultancy firm are anticipated to play a pivotal role in the lender’s five-year strategic plan. The bank’s next growth phase will be from 2015 to 2019.

In the last three years, Co-operative Bank has grown its customer base and sought to cultivate transaction volumes by investing in alternative service channels.