Genghis Capital - Co-operative Bank of Kenya (COOP) The Co-operative Bank of Kenya Plc (NSE: COOP) 1H20 Earnings Note

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Genghis Capital

Gerald Muriuki

The Co-operative Bank of Kenya Plc (NSE: COOP) 1H20 Earnings Note

The Co-operative Bank of Kenya Ltd (NSE: COOP) announced 3.6% y/y fall in 1H20 Earnings per Share (EPS) to KES 1.23 slightly ahead of expected KES 1.14 on slower-than-expected provisions. The growth was slackened by 57.9% y/y increase in provisions and 11.3% y/y increase in other operating expenses against a 5.3% y/y growth in operating income. Net Interest Income (NII) grew impressively by 11.6% y/y to KES 15.9Bn as Non-interest revenue (NIR) backtracked 5.1% y/y (33.3% q/q) in what we attribute to slow transactional banking activity impacted by the ensuing pandemic. Total operating expenses before provisions grew 11.3% y/y on account of a fast rise in staff costs, up 15.5% y/y to KES 6.6Bn. The balance sheet grew 19.6% y/y primarily driven by investment in government securities (27.2% y/y), with the loan book expanding 5.7% y/y (-1.5% q/q) to KES 272.2Bn. We maintain our long term BUY rating on COOP at fair value estimate of KES 13.96

14/08/2020 4 EN

Underlying

Co-operative Bank of Kenya

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KE1000001568 Nairobi Securities Exchange Kenya

Provider

Genghis Capital

Genghis Capital is an innovative and customer focused Investment Bank licensed by the Capital Markets Authority (CMA). Founded in 2008, Genghis is one of the leading investment banks in Kenya. Since its establishment, Genghis has achieved tremendous growth to offer a well-diversified portfolio of financial services that includes:

i. Securities(Equity/Debt) Trading
ii. Research
iii. Wealth Management services
iv. Investment Advisory & Management via the GenCap Unit Trusts
v. Corporate Finance & Transaction Advisory services

The Kenyan Capital Markets continue to develop in size, scope and sophistication. With this is an increasing demand for more specialized and personalized brokerage service and we at Genghis Capital are glad to be able to offer you this service. Our strength lies in ensuring our clients are up to speed with developments at the stock market and the economy. Research and technology remains our competitive and comparative advantage hence Experience, Expertise and Professionalism are some of the qualities you can expect from our team.

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Analysts

Gerald Muriuki

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The Co-operative Bank of Kenya Plc (NSE: COOP) 1H20 Earnings Note

Vital Signs: Actionable charts

Kenya Banks: Sector Q3 21 PBT jumps 68% yoy, and outlook for Q4 is positive too

Cooperative Bank: Reiterate Hold, despite strong 9M 21 revenue performance

Genghis Cross-Asset Weekly Strategy - 8th February 2021

East African Breweries Ltd (NSE: EABL) 1H21 Earnings Note

KenGen Company Plc (NSE: KEGN) FY20 Earnings Note

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