This archive report was first published on 21 May 2020.
Cooperative Bank of Kenya, the fourth-largest lender in the country, has announced flat profits for the three months to March 2020.
According to the bank's latest financial results, net profit for the quarter stood at Sh3.58 billion, a significant drop from Sh5.59 billion in a similar period last year.
The decline in profits can be attributed to rising employee costs and provisions for bad debts, which have eaten into the bank's income from loans and fees.
Co-op Group managing director Gideon Muriuki attributed the increase in operating expenses to loan loss provision and staff expenses, which grew by 20.6 per cent.
Staff costs rose to Sh3.4 billion from Sh2.7 billion, while loan loss provisions nearly doubled from Sh510 million to Sh900 million.
Despite the challenges, the bank has taken proactive measures to mitigate the impact of the COVID-19 crisis, including restructuring loans worth Sh15 billion for struggling borrowers.
Co-op Bank has also managed to move 90 percent of all customer transactions to alternative delivery channels, including mobile and Internet banking as well as agents.
The bank's income from fees jumped to Sh3.76 billion from Sh2.87 billion, with key focus on digital banking.
