Genghis Capital - Co-operative Bank of Kenya (COOP) The Co-operative Bank of Kenya (NSE: COOP) 1H19 Earnings Note

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Genghis Capital

Gerald Muriuki

The Co-operative Bank of Kenya (NSE: COOP) 1H19 Earnings Note

Co-operative Bank of Kenya Ltd (NSE: COOP) reported a 4.3% y/y growth in 1H19 Profit After Tax (PAT) to KES 7.4Bn, slower than our expected PAT growth of 6.1%. The growth was buoyed by Non-Interest Revenue (NIR) which grew 25.1% y/y to KES 8.8Bn spurred by a 39.0% y/y rise in other fees and commissions. However, Net Interest Income (NII) fell by 3.8% y/y on account of a 1.7% y/y drop in interest income, coupled with a 3.5% y/y rise in interest expenses. Total operating expenses before provisions grew modestly at 4.9% y/y on account of a 6.8% y/y increase in staff costs to KES 5.7Bn. Provisions rose 8.1% y/y to KES 1.2Bn against our expected decrease of 30.5% y/y. The balance sheet grew 7.8% y/y primarily driven by investment in government securities (16.7% y/y) and 2.6% y/y rise in the loan book. We recommend a BUY on COOP with a target price of KES 16.33, representing a potential upside of 37.8%.

22/08/2019 1 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 (NSE: COOP) 1H19 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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