Co-operative Bank of Kenya (COOP) reported profit for the nine months period to the end of September 2016 increased 22.3% year-over-year (or YoY) to Ks10.5 billion. Total revenue increased to Ks32.3 billion, up from Ks26.6 billion a year earlier, with net interest revenue shooting up to Ks22.4 billion from Ks17.4 billion a year ago.
COOP Bank said its earnings improvement in the latest period was largely supported by the ongoing automation of the company’s banking operations. Automation is helping the bank whittle down operating costs, thus lifting profit margins. COOP Bank began aggressive modernization of its operations two years ago under a program dubbed “Soaring Eagle”.
As the bank automates its operations, it is not only dropping down costs but also freeing up staff to pursue more sales leads, resulting in the double improvement in bottom line and topline metrics.
COOP loan book grows 7%
COOP Bank saw fairly strong lending activity during the latest period with its loan book expanding 7% to Ks227.1 billion. The bank’s loan book could grow further as uptake for credit is expected to improve in the current following a move last quarter to cap lending rates 4% above the regulatory benchmark.
Unlike Barclays (BBK) that took a hit on its bottom line as it boosted provision for loan losses, COOP Bank didn’t report loan loss provision blowout. The bank said its assets grew 6.4% to Ks354 million.
COOP Bank stock rose 8.21% to close at Ks14.50 on November 17. The company has a market cap of about Ks65.5 billion. COOP Bank is a component of Kenya NSE 20 Index, which tracks the performance of 20 largest companies listed on the Nairobi Securities Exchange (NSE) market.
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