Genghis Capital - Co-operative Bank of Kenya (COOP) Co-operative Bank of Kenya Ltd 1H18 Earnings Update

Report

Genghis Capital

Patrick Mumu

EUR 25.82 For Business Accounts Only

Co-operative Bank of Kenya Ltd 1H18 Earnings Update

Co-operative Bank of Kenya Ltd (NSE: COOP) released 1H18 financial results reporting a 7.6% increase in EPS to KES 1.22 from KES 1.13 in 1H17. The increase was buoyed by Net Interest Income (NII) which grew 10.4% y/y to KES 14.8Bn compared to KES 13.4Bn in 1H17. Non-interest Revenue (NIR) declined 1.6% y/y to KES 7.0Bn, attributed to a 41.4% decline in fees and commissions on loans. Total operating expenses grew by a modest 5.5% y/y on account of a 13.0% y/y increase in staff costs to KES 5.3Bn, while loan loss provisions (LLP) declined by 27.6% y/y to KES 1.1Bn. The balance sheet grew 3.9% y/y driven primarily by investment in government securities that increased 12.0% y/y, despite the 0.6% y/y decline in the loan book. We maintain our HOLD recommendation on Coop Bank at a target price of KES 19.40. This represents an upside potential of 13.8% from the current market price of KES 17.05.

20/08/2018 5 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

Patrick Mumu

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