Co-operative Bank shareholders are set for a Sh5.86 billion dividend after the lender retained the payout despite full-year net profit declining by 24.4 percent on increased provisions for loan defaults.
Co-op Bank’s board on Thursday morning said after-tax profit for the year ended December 2020 dropped from Sh14.3 billion to Sh10.81 billion.
The tier I lender posted a growth in both interest and non-interest income but the bottom-line was slowed by the 3.2 times rise in loan loss provisions to Sh8.11 billon from Sh2.53 billion.
The bank’s chief executive Gideon Muriuki said the sharp rise in provisions was in line with the prevailing economic difficulties facing borrowers due to Covid-19 disruptions.
“The group has taken loan loss provisions of Sh8.5 billion in appreciation of the challenges that businesses and households are grappling with from the disruptions occasioned by the ongoing pandemic,” said Mr Muriuki.
He said the bank restructured loans worth Sh49 billion or 17 per cent of total loan book during the review period to support customers.
