THE CO-OPERATIVE BANK OF KENYA HALF YEAR 2011 ANALYSIS

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The Co-operative Bank of Kenya (Co-op Bank) today morning announced its financial results for the Half Year ending June 30^th 2011

Profit Before Tax rose by 42.4% to Kshs. 4.15 Billion. Profit After Tax was up by an equally impressive 41.3%, hitting Kshs. 3.31 Billion

Total Assets were up by 23.4% to stand at Kshs. 164 Billion

The loan book also grew at a brisk pace. Net loans and advances was up 35.8%

Net Interest Income was up by a more than respectable 46.4%

Total Operating expenses was up 28.7%, but this was offset by a 33.1% in Total Operating Income

Net-Non Performing Loans reduced to 1.45 Billion, representing a 14.4% decline

Bank accounts now stand at 2.2 Million accounts, up from 1.4 Million accounts, thanks in no small part due to their all inclusive bank staff initiative. This represents an over 57% growth.

H1 2010 vs. H1 2011 Analysis

	H1 2010 Kshs.	H1 2011 Kshs.	% CHANGE
TOTAL ASSETS	133.6 BILLION	164.8 BILLION	+23.4%
NET LOANS AND ADVANCES	70 BILLION	95 BILLION	+35.8%
CUSTOMER DEPOSITS	109.7 BILLION	130.7 BILLION	+19.2%
LOAN:DEPOSIT RATIO	63.9%	72.8%	+8.9%
TOTAL INTEREST INCOME	5.5 BILLION	7.3 BILLION	+31.5%
TOTAL INTEREST EXPENSE	1.47 BILLION	1.33 BILLION	-9.7%
NET INTEREST INCOME	4.07 BILLION	5.96 BILLION	+46.4%
TOTAL OPERATING INCOME	7 BILLION	9.3 BILLION	+33.1%
TOTAL OPERATING EXPENSE	4.1 BILLION	5.3 BILLION	+28.7%
COST:INCOME RATIO	58.5%	56.5%	-2%
NET NON PERFORMING LOANS	1.7 BILLION	1.45 BILLION	-14.4%
PROFIT BEFORE TAX	2.91 BILLION	4.15 BILLION	+42.4%
PROFIT AFTER TAX	2.34 BILLION	3.31 BILLION	+41.3%

Co-op Bank saw a strong growth in Customer deposits by almost 20% to Kshs. 130.7 Billion

Staff costs went up by 20.9 % to Kshs. 2.55 Billion from Kshs. 2.1 Billion

Total Fees & Commissions rose by 16.4% to Kshs. 2.53 Billion

Not surprisingly, Co-op Bank made a healthy return from Foreign Exchange Trading income. FOREX 

Trading Income rose by 43.9% to Kshs. 539 Million

Q1 2011 vs. Q2 2011 (Quarter on Quarter Analysis)

	Q1 2011 Kshs.	Q2 2011 Kshs.	% CHANGE
TOTAL INTEREST INCOME	3.46 BILLION	3.83 BILLION	+10.7%
TOTAL INTEREST EXPENSE	605.8 MILLION	723.3 MILLION	+19.4%
NET INTEREST INCOME	2.85 BILLION	3.1 BILLION	+8.9%
TOTAL OPERATING INCOME	4.58 BILLION	4.75 BILLION	+3.5%
TOTAL OPERATING EXPENSE	2.54 BILLION	2.74 BILLION	+8.0
COST:INCOME RATIO	55.3%	57.7%	+2.4
PROFIT BEFORE TAX	2.05 BILLION	2.1 BILLION	+2.4%
PROFIT AFTER TAX	1.64 BILLION	1.67 BILLION	+1.5%

For all their impressive growth from their previous half, Co-op Bank posted modest Quarter on Quarter growth. This goes to show the impact of inflation started to be felt by most banks in Q2 2011.

Operating Expense & Interest Expense grew faster than Operating Income & Interest Income respectively

Co-op Bank registered only a slight increase in Profit Before Tax and Profit After Tax, Quarter on Quarter

The Branch network now stands at 89. ATM networks are now accessible in over 410 service points.

On the agency banking platform, 440 Agents have been approved by the Central Bank of Kenya, with the bank targeting over 2000 by year end.

With a 21% shareholding in CIC Insurance, Co-op bank will definitely benefit from the growth of the insurance industry in Kenya.