(Adds consultant, South Sudan)

NAIROBI Nov 12 (Reuters) - The Co-Operative Bank of Kenya posted a 2.5 percent increase in nine-month profit as rising costs ate into higher fee income, and said on Wednesday it had begun a strategic review which it hopes will boost margins.

Pretax profit for the nine months climbed to 9.13 billion shillings ($101.44 million).

The bank's net interest income grew 8.8 percent to 20.86 billion shillings. Non-interest income -- income derived primarily from fees, including charges for the use of cash machines -- grew by almost a quarter to 8.45 billion shillings.

Operating expenses, however, increased by 13.9 percent.

Co-op Kenya, which mainly serves co-operative societies and individuals, said it had hired global advisory firm McKinsey to carry out a review of the business.

The review, to be concluded by December this year, is focused on enhancing the bank's ability to generate higher revenues and to increase efficiency, Co-op Kenya said.

It added its subsidiary in neighbouring South Sudan -- a two branch operation that will add another outlet soon -- will break even early next year after a peace settlement there.

Co-op Kenya started operating in South Sudan last year. (1 US dollar = 90.0000 Kenyan shilling) (Reporting by Duncan Miriri; Editing by Edith Honan and Clara Ferreira Marques)

In 3 years if the momentum is maintained CFC Stanbic will overtake Coop in terms of profits.

Sometime this year they had hired McKinsey.
I just hope they will inject fresh ideas.

Google the term "Chinese Wall"

INVESTOPEDIA EXPLAINS 'Chinese Wall'

Maintaining client confidentiality is crucial to any firm, but particularly large multiservice businesses. Where firms are providing a wide range of services, clients must be able to trust that information about themselves will not be exploited for the benefit of other clients with different interests. And that means clients must be able to trust in Chinese Walls. Some Wall Street scandals in recent years, however, have made some people doubt the effectiveness of Chinese Walls, as well placed executives of respectable firms have traded illegally on inside information for their own benefit.

The PAT dropped by 9% from 6.9bn to 6.3bn attributed to rise in interest expense of 27%.
Co-op’s after-tax performance reflects the expiry of a five-year tax holiday following its listing through an initial public offering in 2008. It has been paying corporate tax at the reduced rate of 20 per cent until last year.

@The Optimist;
Ignore the above message

Doing business in this country is like being in hell,a whole 30% tax is just too huge and senseless

Comparing kenya with America with a tax difference of 7% whereas america has existed for more than 200 years when we were monkeys in the forests??? I can support a tax revolution