Co-operative Bank yesterday announced their third quarter results and just like the trend with other big banks, it announced an increase in their net profit to Ksh.10.5 billion. This was a 22.3% increase from the Ksh.8.6 billion that It had posted In a similar period the previous year.

This increase in earnings was backed by interest income from both loans and deposits which increased by Ksh.3.9 billion. The biggest boost however came from government securities which netted the lender a cool Ksh.6.7 billion, this followed the Treasury’s increased appetite for domestic debt. This came about as the bank increased its investment in government papers by 57% to 66.6 billion as compared to Ksh.42.2 billion the previous year. With the rate cap, I see this being the trend for most banks as the securities have a lower risk than lending to corporates and individuals.

Co-op bank’s loan book experienced a 6.9% growth to Ksh.227 billion from Ksh.212.3 billion the previous year. Their total assets grew by 6.4% to Ksh.354 billion while their liabilities increased to Ksh.295.2 billion mostly due to customer deposits which as at the end of the quarter stood at Ksh.257.8 billion.

Their South Sudan subsidiary bucked the trend in the other banks and turned a profit of Ksh.45.1 billion for the period despite the business and political challenges. These guys might be doing something right.

The bank has been undergoing a transformation since 2014 which has seen their cost to income ratio drop to 47% from 60% due to operational efficiencies. This transformation has seen 87% of their transactions migrate to alternative channels. Moving forward their focus just like in other banks will be pushing mobile banking.

The bank expects its gross profit to increase by 22% by the end of the year. Find the full results here.