Co-op Bank Group is pleased to report a profit before tax of Ksh22.7 billion for the third quarter of 2022, a commendable 38 per cent growth compared to Ksh16.5 billion recorded in the third quarter of 2021.
This represents a strong profit after Tax of Ksh17.1 billion compared to Ksh11.6 billion reported in 2021. The performance delivers a competitive return on Equity of 23 per cent to our shareholders.
The Bank's strong performance is in line with the Group’s strategic focus on sustainable growth, resilience, and agility, according to a report released by the Co-op Ban CEO, Dr Gideon Muriuki, on Thursday, November 17, 2022.
Support to the Fundraising Appeal to Fight Hunger
Co-op Bank Group wishes to join other Kenyans and, indeed, the global community of goodwill in fully supporting the Fundraising Appeal initiated by His Excellency the President, with a key contribution of Ksh150 million to support relief efforts aimed at assisting families affected by the severe drought ravaging various parts of the Country.
Key Performance highlights;
Financial Position: The Group has registered sustained growth as follows;
Total Assets grew to Ksh622.1 billion, a 5 per cent growth from Ksh592. 9 billion in the same period last year.
Net loans and advances grew to Ksh335.2 billion, a 9.4 per cent growth from Ksh306.3 billion in 2021.
Customer deposits grew to Ksh432 Billion, a 3 per cent increase from Ksh420.4 billion.
External funds from development partners stand at Ksh41. 9 Billion from Ksh43.8 billion in 2021.
Shareholders’ funds have grown to Ksh100.9 Billion, a 6.2 per cent increase from Ksh95 billion in 2021.
Comprehensive Income
Total operating income grew by 17.6 per cent from Ksh44.4 billion to Ksh52.2 billion.
Total non-interest income grew by 28.3 per cent from Ksh15.7billion to Ksh20.2 billion.
Net interest income grew by 11.7 per cent from Ksh28.7 Billion to Ksh32 billion.
Total operating expenses increased by 6 per cent from Kshs 28.0 Billion to Ksh29.6 billion.
Cost Management
Excellent gains from our various initiatives with a Cost to Income ratio of 45.8 per cent in Q3 2022 from 59 per cent in FY2014 when we began our growth and efficiency journey.
Credit Management remains a key focus area that has achieved key milestones. The Group prudentially provided Ksh5.7 billion compared to Ksh6 billion provided in 2021, pointing to an improvement in the quality of the asset book.
A Strong Digital Footprint
Through our digital channel strategy, the Bank has successfully moved 94 per cent of all customer transactions to alternative delivery channels, a 24-hour contact centre, mobile banking, 550 ATMs, internet banking and a wide network of Co-op kwa Jirani agents
We have successfully migrated our customers to the Omni-channel, integrating accessibility and user experience.
Our omnichannel interfaces online banking through personal computers, mobile phones and USSD availing our services to all customers through their preferred channel yet retaining the same experience from wherever they are.
A successful Universal Banking model and the implementation of Sales Force Effectiveness have seen the Group serve 9 million Account-holders across all sectors.
Key focus on digital banking, with the all-telco Mco-op Cash Mobile Wallet continuing to play a pivotal role in the growth of non-funded income with 5 Million customers registered and loans worth Ksh62.5 billion disbursed year-to-date, averaging over Ksh6.9 billion per month.
Over 165,000 customers have taken up the MSME packages that we rolled out in 2018, and 30,723 have been trained in business management skills.
Year to date, we have disbursed Ksh18.8 billion to MSMEs through our Mobile E-Credit solution. MSMEs are a critical part of economic recovery post-covid and contribute up to 16 per cent of our total Loan Book.
Our unique model of retail banking services through Sacco FOSAs enabled us to provide wholesale financial services to over 466 FOSA outlets.
Subsidiaries
Co-op Consultancy and Bancassurance Intermediary Ltd posted a profit before tax of Ksh772 million in Q32022, riding on strong penetration of the Bancassurance business.
Co-operative Bank of South Sudan is a unique joint venture (JV) partnership with the Government of South Sudan (Co-op Bank 51% and GOSS 49a) returned a profit of Ksh190 Million in Q32022 compared to a loss of Ksh104 million in Q32021.
Co-op Trust Investment Services contributed Ksh141 Million in profit before tax in Q32022, with funds under management of Ksh202.6 billion compared to Ksh187.1 billion in September 2021.
Kingdom Bank Limited (A Niche MSME Bank) has contributed a profit before tax of Ksh609.2 million in Q32022 compared to Ksh413.1 million reported last year, representing a 47a Growth year-on-year.
Environmental Social and Governance (ESG)
The Group was named the Overall Winner at the Kenya Bankers Association Catalyst Awards held in September 2022. The awards recognize organizations that exemplify their sustainability prowess through promoting catalytic finance that impacts industry, economy and society.
This latest win is the third in five years, having won in 2017 and 2019, ranking Co-op Bank as Industry Leader in Sustainable Finance in Kenya.
Co-op Bank Foundation, the Group’s social investment vehicle, continues to provide Scholarships to gifted but needy students from all regions of Kenya. The sponsorship includes fully paid secondary education, full fees for University education, Internships and career openings for beneficiaries.
The foundation is fully funded by the bank and has supported 9553 students since the program's inception.
Accolades
The Group Managing Director & CEO Dr Gideon Muriuki was honoured with the award of a third Doctorate by the Africa International University in November 2022.
The Citation for the degree award noted his illustrious career in banking, his historic turnaround of Co-op Bank, his destiny-defining contribution to the cooperative movement and his enduring commitment to sustainable finance in Africa.
Conclusion
The Co-operative Bank Group continues to pursue strategic initiatives focusing on resilience and growth in the various economic sectors.
This is anchored on a successful universal banking model supported by an innovative digital presence, a wide physical footprint, a 9 Million customer base and the unique synergies in the over 15 million-member co-operative movement that is the largest in Africa.