Co-operative Bank Kenya Rises to 3-Week High on Lending Outlook

Co-operative Bank of Kenya Ltd., the nation’s fifth-biggest lender by market value, climbed to the highest level in three weeks on bets that income from loans improved last year and operations were more efficient.

The stock advanced 1.7 percent to 18.30 shillings by the close in Nairobi, the capital, the strongest level since Jan. 29. Investors traded 1.1 million shares, equal to 1.1 times the three-month daily average, pushing the 14-day relative strength index to 60 A level of 70 or higher indicates to some technical traders a stock may be overbought.

“They have turned around their loan book and are focusing more on segments that bring them more money,” Joy D’Souza, an analyst at Nairobi-based Kestrel Capital (East Africa) Ltd., said by phone. “They have been able to leverage on their new core banking system to cut costs and cross-sell new products to existing customers.”

Full-year profit at Co-op Bank, as the lender is known, may have risen 17 percent in 2013, driven by a 19 percent growth in interest income, D’Souza said. A date for the earnings release has yet to be announced.

Co-op Bank’s net income in the nine months through September rose 17 percent to 6.94 billion shillings ($81 million), the company said in November. Net interest income advanced to 14.6 billion shillings from 11.8 billion shillings. The shares have climbed 5.6 percent this year, compared with a 1.1 percent drop in the FTSE NSE Kenya 25 Index in the period.

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