Co-operative Bank (Co-op Bank) has reported a Ksh. 3.46 billion net profit for the first quarter 2021. This represents a 4% decline in profitability from Ksh. 3.59 billion which was posted on 31st March, 2020.

The reduced profitability was due to the fact that the bank set aside Ksh. 2.28 billion for potential loan losses, which was a 154% increase from the Ksh. 900 million set aside in the first quarter of 2020.

The bank also recorded a sharp rise in the level of bad debt as borrowers struggled to repay their loans. Gross non-performing loans grew to Ksh. 52 billion in the first three months of 2021, a 63% increase from Ksh. 32 billion posted in the first three months of 2020.

Co-op Bank’s main source of revenue, interest income, rose by 28% to Ksh. 13.45 billion in the first three months of 2021 from Ksh. 10.54 billion the previous year. On the other hand, non-interest income reduced by 9% to Ksh. 4.52 billion from Ksh. 4.98 billion in March last year.

In August 2020, Co-op Bank acquired 90% ownership in Jamii Bora Bank at a cost of Ksh. 1 billion. Additionally, the Bank’s assets value grew to Ksh. 553 billion at the end of March 2021, from Ksh. 470 billion in March 2020 before the acquisition. The Bank’s liabilities also went up to Ksh. 458 billion at the end of the first quarter of 2021, from Ksh. 387 billion in the first quarter of 2020.