Co-operative Bank of Kenya Slips to 1-Month Low: Nairobi Mover

Co-operative Bank of Kenya Ltd., the country’s fifth-biggest lender by market value, declined to its lowest level in a month after lending in the second quarter fell and interest paid on deposits more than doubled.

Shares in Co-op Bank, as the lender is known, declined as much as 2.2 percent to 10.90 shillings before trading 0.9 percent lower at 11.05 shillings by 12:10 p.m. in the capital, Nairobi. A close at this level would be the lowest since June 5.

“Quarter-on-quarter, their lending is down marginally,” Faith Atiti, an analyst at Nairobi-based Sterling Investment Bank, said in a phone interview today.

In the three months to June, the bank provided 112.6 billion shillings ($1.34 billion) to customers compared with 113.6 billion shillings in the previous three months, according to an e-mailed statement from the company.

Interest paid on deposits more than doubled to 5.55 billion shillings from the previous quarter,

“We therefore see a risk to the bank’s balance sheet growth prospects in financial year 2012 as the bank seeks to protect itself from interest expenses arising from expensive wholesale deposits,” Gregory Waweru, an analyst at Nairobi- based Kestrel Capital (East Africa) Ltd., said in an e-mailed note today.

Co-op Bank today said first-half profit climbed 22 percent to 4.03 billion shillings as earnings from loans grew in the six months through June. Net interest income, the money banks earn from charges on loans, jumped 25 percent to 7.44 billion shillings, it said.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net.

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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