The Co-operative Bank Group yesterday announced Sh12.7 billion in net profit for year ended December 31,2018, 11.4 percent compared to the previous year.
The bank’s gross profits for the year under review stood at Sh18.2 billion compared to Sh16.4 billion in 2017.
Co-operative Bank managing director Gideon Muriuki attributed the profit growth to the ‘Soaring Eagle’ business model adopted in 2014 which champions digital transformation and diversified products.
“The group continues to leverage on the benefits of the “Soaring Eagle” Transformation Agenda that has re-tooled and equipped the business with added competitive edge as reflected in the sustained growth in market share across all market segments, Muriuki said in a statement.
Total income improved seven per cent from Sh40.37 billion to Sh 43.02 billion majorly from government securities which increased by 19 per cent from Sh8.21 billion to Sh 9.79 billion while income from loans and advances increased by three per cent from Sh31.94 billion to Sh32.95 billion.
The Bank’s total assets grew by 25.6 billion to hit Sh413.4 billion, cementing its position as the third largest bank in Kenya by asset value.
Even so, its position in the local market is under threat following the intended merger between NIC and CBA Bank who will command a combined asset value of Sh444 billion.
The bank’s loan book and however declined by three percent to Sh245.41 billion compared to Sh254.86 billion.
Although the Co-operative Bank South Sudan which is in a unique Joint Venture (JV) with the South Sudanese government on 51:49 ratio made a profit of 362 per cent higher than in 2017, the performance translated into a loss of Sh30.78 million.
This is attributed to hyperinflation accounting occasioned by currency devaluation of the South Sudanese Pound.
The Cooperative Bank’s profit of Sh12.7 billion is second best among five local lenders that have announced their 2018 results.
Kenya Commercial Bank group leads the pack with Sh24 billion, Barclays Bank Sh7.4 billion, Diamond Trust Bank Sh7.08 billion and Stanbic Bank at Sh6.17 billion.
The cumulative profit by five banks is Sh56.8 billion.
What can these banks’ profits do?
This financial year, Treasury allocates Sh25billion to the agricultural sector with key focus on irrigation and crop insurance for small-holder farmers.
The amount is however a drop in the ocean if the Maputo Declaration that requires a minimum of 10 percent allocated to the agriculture.
The Sh56.8 billion net profits by the five banks can help Kenya double its agriculture budget, improve food production and minimize food shortage crisis currently witnessed in some parts of the country.
