Ahead of the release of its 2019 full year financial results in mid-March 2020, Cooperative Bank of Kenya has been given an Overweight Rating by Securities Africa Kenya Limited.

In its 2020 research note on Kenya main banks valuation, Securities Africa Kenya limited said Coop bank will record earnings per share of KES2.47, which is a +15.6{d59e984f9fbc5c09e4ab0305e27bfa5819922b7230cd324f89a660f78358ca33} year on year growth with more notable growth in the 2020 and 2021 financial year of +16.7{d59e984f9fbc5c09e4ab0305e27bfa5819922b7230cd324f89a660f78358ca33} year on year and +20.1{d59e984f9fbc5c09e4ab0305e27bfa5819922b7230cd324f89a660f78358ca33} year on year respectively. The growth is mainly driven by improving efficiencies.

Securities Africa also anticipates that Coop bank will report stronger interest income growth of +12.2{d59e984f9fbc5c09e4ab0305e27bfa5819922b7230cd324f89a660f78358ca33}, following the repeal of the interest rate cap. This growth will be largely on the back of consumer lending as well as from SMEs and the agricultural sector.Cost of income will also improve further to 49.0{d59e984f9fbc5c09e4ab0305e27bfa5819922b7230cd324f89a660f78358ca33} and 47.0{d59e984f9fbc5c09e4ab0305e27bfa5819922b7230cd324f89a660f78358ca33} in 2020 and 2021 as a result of enhanced efficiencies.

This forecast by Securities Africa Limited comes two weeks after a similar report by Investec Securities indicated that the Co-op Bank share price has the highest upside potential at 14.2{d59e984f9fbc5c09e4ab0305e27bfa5819922b7230cd324f89a660f78358ca33} to a projected fair price of Kes. 17.30 from the current Kes15.15. KCB comes second with a 12.9{d59e984f9fbc5c09e4ab0305e27bfa5819922b7230cd324f89a660f78358ca33} upside potential from Kes52.00 to Kes58.70 while Equity comes third, projected to rise 3.9{d59e984f9fbc5c09e4ab0305e27bfa5819922b7230cd324f89a660f78358ca33} from Kes50.25 to Kes52.20.