Co-operative and I&M Banks have been ranked as the top-performing banks in Kenya in 2020 in a report by Cytonn Investments.
According to the report, I&M bank takes the top position in a ranking of the country’s leading financial institutions followed by the Co-operative Bank.
Co-op rose to the second position from third in the 2019 Financial Year with the progress credited to the Gross non-Performing Loans (NPL) ratio to 10.8 percent in Q1’2020 from 11.2 percent in FY’2019, in turn, advancing its franchise value score.
The report disclosed that Co-operative Bank rose to the top in the franchise ranking due to high-efficiency level as shown by a low price to Income ratio which came in at 58.1 percent compared to an industry average of 61.4 percent.
KCB Group, on the other side, dropped to third place from the first position in 2019 due to deterioration in the cost to income ratio to 61.1 percent in Q1’2020 from 56.2 percent in 2019 hence worsening the franchise value score.
Equity Group and Diamond Trust took the fourth and fifth positions respectively in the comprehensive ranking.
According to the report, Kenya’s banking sector has shown resilience performance despite the sturdy operating environment which is largely attributable to persisted revenue diversification.
Announcing the financial results for Quarter 1, 2020, Co-operative Bank CEO Gideon Muriuki announced that the bank had restructured loans worth Sh15 billion in the first Quarter of 2020 to support customers amid Covid-19 pandemic.
With the tough economic times caused by the pandemic, the bank engaged customers seeking a longer repayment period, those seeking additional funding to sustain operations and also the ones in need of an interest moratorium period during the ongoing pandemic.
In a statement, Co-operative Bank acknowledged that the pandemic had impacted its operations, revealing that it had prompted an accelerated shift towards digital channels.