Co-op Bank eyes Ethiopian market

The Cooperative Bank is eying the Ethiopian market as part of its expansion programme.

The management said it hopes to make an entry into the nation by 2016 once current talks between Kenya and its neighbour are concluded.

The group also plans to set up shop in Uganda joining Equity and KCB in regional growth drives.

“We are thinking of Uganda in 2015 and Ethiopia by 2016. We find Uganda very good for us because the cooperative movement in the country is very strong. Ethiopia has a big population and its economy is opening up now, and we think there are big opportunities for growth there,” Co-op Bank Group managing director, Mr Gideon Muriuki said.

He spoke on Wednesday while releasing the group’s financial results for 2013 which posted 18 per cent rise in earnings.

In the 2013 financial year, the bank made Sh9.1 billion after tax profit up from Sh7.7 billion reported in 2012, buoyed by a significant decline in interest expenses and rise in net interest income.

INTEREST COSTS DOWN

In the period, interest costs fell by 32 per cent to Sh5.9 billion from Sh8.68 billion. Net interest income on the other hand, rose by 19 per cent to Sh18.6 billion from Sh15.7 billion.

Its South Sudanese operation, in which it holds a 51 per cent stake with balance held by the South Sudan Government, made a loss of Sh275.2 million ($3.2 million) in 2013.

The bank commands 4.1 million customer accounts compared to 3.2 million in 2012. The number of agents stands at 7,099 but is targeting to more than double the same to 15,000 by end of 2014.

Co-op Bank intends to replicate the model it used in entering South Sudan to penetrate Uganda and Ethiopia.

“We would like to go there as a joint venture with the cooperative movement but with a controlling stake,” said Mr Muriuki.