Co-operative Bank Group registered a Ksh29.4 billion profit before tax for the 2022 full-year results released on Thursday, March 16.
The profit before tax marked a 30 per cent growth compared to the Ksh22.6 billion recorded in the 2021 full year.
According to Co-op Bank, the financial results presented a strong profit after tax of Ksh22 billion compared to Ksh16.5 billion reported in 2021.
Following the growth trajectory, Co-op Bank sustained an increase in shareholder value as reflected in the competitive Return on Equity of 21.2 per cent.
" The Board of Directors has recommended a dividend of Ksh1.50 per share, subject to approval by the regulators and shareholders," read part of a statement by Group Managing Director and CEO Dr. Gideon Muriuki .
"The proposed dividend represents a 50 per cent enhancement on the Kshs 1.00 per share paid out last year. A virtual Annual General Meeting will be held on Friday, May 19, 2023," the statement added.
Key Performance Highlights
In the 2022 financial year, Co-op Bank's total assets grew to Ksh607.2 billion, a 4.7 per cent growth from Ksh579.8 billion in 2021.
Net loans and advances grew to Ksh339.4 billion, a 9.4 per cent growth from Ksh310.2 billion in 2021.
In the same period, customer deposits grew to Ksh423.8 billion, a 3.9 per cent increase from Ksh407.7 billion.
According to 2022 Co-op Bank 2022 full-year results, external funds from development partners stood at Ksh48.1 billion from Ksh42.9 billion in 2021.
Shareholders' funds grew to Ksh107.7 billion, a 7.4 per cent increase from Ksh100.2 billion in 2021.
Comprehensive Income
Total operating income grew by 17.9 per cent from Ksh60.4 billion to Ksh71.3 billion.
In the same period under review, total non-interest income grew by 32.7 per cent from Ksh19.4 billion to Ksh25.7 billion.
Besides growth in non-interest income, net interest income increased by 10.9 per cent from Ksh41.0 billion to Ksh45.5 billion.
Moreover, total operating expenses registered a positive growth of 10.9 per cent from Ksh38.1 billion to Ksh42.2 billion.
Cost Management
Co-op Bank Group reported gains from various initiatives to record a Cost-to-Income Ratio of 47.1 per cent in the 2022 financial year from 59 per cent in the 2014 financial year when the bank began its growth and efficiency journey.
" Credit Management remains a key focus area, with the Group prudentially making provisions of Ksh8.7 billion which has enhanced the Bank's Loan Loss Reserve/Coverage levels to 74 per cent from 69 per cent in 2021," the report added.
Strong Digital Footprint
In the period under review, Co-op Bank's digital channel strategy helped the financial institution move 92 per cent of its customer transactions to alternative delivery channels.
Other successes associated with the digital channel strategy included having a 24-hour contact centre, 542 ATMs, mobile and internet banking and over 17,000 networks of Co-op kwa Jirani agents
"We have successfully migrated our customers to the Omni-channel, integrating accessibility and user experience," Dr Mukiuki explained.
"Our omnichannel interfaces online banking through personal computers, mobile phones and USSD availing our services to all customers through their preferred channel yet retain the same experience from wherever they are," he added.
Through all-telco Mco-op Cash Mobile Wallet, the bank disbursed Ksh84.2 billion loan, and its customer base hit the 5 million mark.
According to the financial results, over 170,000 customers had taken up the MSME packages rolled out in 2018, and 33,673 have been trained on business management skills.
"Year to date, we have disbursed Kshs. 25.4 billion to MSMEs through our Mobile E-Credit solution. MSMEs are a critical part of economic recovery post-covid and contribute up to 16.9 per cent of our total Loan Book.
"Our unique model of retail banking services through Sacco FOSAS enabled us provide wholesale financial services to over 484 FOSA outlets," the Group Managing Director and CEO noted.
Subsidiaries
Co-op Consultancy & Bancassurance Intermediary Ltd posted a Profit Before Tax of Ksh1.01 billion in the 2022 financial year, 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 per cent and GOSS 49 per cent) returned a profit of Ksh132.7 million in the 2022 financial year compared to a loss of Ksh421.7 million in 2021, a 131 per cent growth.
Co-op Trust Investment Services contributed Ksh208.1 million in Profit Before Tax in 2022, with Funds Under Management of Ksh196.6 billion compared to Ksh189.2 billion in December 2021.
Kingdom Bank Limited (A Niche MSME Bank) contributed a Profit before Tax of Ksh803.8 million in 2022.
Environmental Social and Governance (ESG)
In 2022, the Bank embarked on an enhanced ESG roadmap to integrate ESG considerations into its operations with several key milestones achieved.
Among the achievements included enhanced ESG governance to ensure that the Bank has effective policies,procedures, and practices in place to identify, manage, monitor, and report on environmental, social, and governance (ESG) matters that may impact the bank's operations and stakeholders.
Appointment of an ESG Champions Committee and establishment of a dedicated ESG Unit.
Appointment of ESG champions across the entire Group, representing all Divisions, Subsidiaries and Control Functions.
Accolades
In the 2022 financial year, Co-op Bank was recognised as Best Overall in Satisfactory Customer Experience' following a customer survey conducted by the Kenya Bankers Association (KBA).
In addition, the bank was similarly recognised with the 'Excellence in Customer Experience in Digital Banking' award at the Digibanking Event held in Nairobi.