12 November 2009
Nairobi — Co-operative Bank on Thursday reported a 10 per cent increase in its 2009 third-quarter profit, amid a general slowdown in the banking industry's earnings.
The Nairobi Stock Exchange-listed firm returned Sh2.9 billion in pre-tax profit over the nine months, compared to Sh2.6 billion over a similar period in 2008.
The bank's profit was mainly driven by a 27 per cent increase in interest income from Sh3.9 billion to Sh4.9 billion.
This was on the back of the expansion of its loan book, where net loans and advances increased from Sh48.7 billion to Sh60.5 billion.
On Thursday, managing director Gideon Muriuki, said the bank's Sh14 billion capitalisation and product diversification had contributed to the positive growth: "The key ICT investments are well supported by the recapitalised balance sheet with a capital of over Sh14 billion."
In the period under review, the bank's total customer deposits rose from Sh64.7 billion to Sh76.6 billion, representing an 18 per cent growth.
Total assets increased by 26 per cent from Sh78.5 billion to Sh98.8 billion.
However, as the bank expanded its countrywide presence, it saw operating expenses rise 16 per cent from Sh4.6 billion to Sh5.37 billion.
The bank has opened 19 new branches this year, partly through leasing of premises and equipment.
Sacco Link
Besides opening branches and investing in over 255 ATMs, Co-op Bank has invested in an ICT switch that enables members of saccos using the Sacco Link debit card access cash their ATM's and make purchases at Visa branded outlets globally.
Over 140,000 cards have been issued with the number projected to hit over 300,000 by yearend.
The bank is also providing corporate finance capacity support to the co-operative sector through Co-operative Consultancy Services, to increase Sacco Fosa's to over 400 and facilitate access to financial services to over 6 million members.
Coop Bank announced that it was preparing to shift to a new banking network.
It has been on a bank master/branch power core-banking system, after shifting from Misys, 10 years ago.
"To enhance our delivery channels, we have started reviewing our core banking software for the future," said Mr Muriuki.
Partnership
The ICT investment comes as the bank prepares to enter Southern Sudan with five branches.
It is negotiating a strategic partnership with the co-operative movement in Uganda and Rwanda.
It has also invested in Kingdom Securities stockbrokerage and appointed Co-op Bank branches and 250 active Sacco Fosa outlets as agents.
Recently, it launched the mortgage product, "Good Home".
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