Co-op Bank Group is pleased to report a Profit before Tax of Ksh8.15 billion for the first quarter of 2023, representing a 4.67 per cent growth compared to Ksh7.78 billion recorded in the first quarter of 2022.
This represents a Profit after Tax of Ksh6.1 billion compared to Ksh5.8 billion reported in 2022, a 5.2 per cent growth.
The strong performance of the bank is in line with the group's strategic focus on sustainable growth, resilience, and agility.
Key Performance highlights:
1. Financial Position: The Group has registered sustained growth as follows.
Total Assets grew to Ksh631.1 billion, a 5.7 per cent growth from Ksh597.0 billion in the same period last year.
Net loans and advances grew to Ksh360.1 billion, an 11 per cent growth from Ksh324.5 billion in 2022.
Customer deposits grew to Ksh419.8 billion, a 2.2 per cent increase from Ksh410.8 billion.
External funds from development partners have increased by 12 per cent to Ksh48.4 billion from Ksh43.3 billion in 2022.
Shareholders' funds have grown to Ksh112.6 billion, a 9.7 per cent increase from Ksh102.7 billion in 2022.
2. Comprehensive Income
Total operating income grew by 6.5 per cent from Ksh16.8 billion to Ksh17.9 billion.
• Total non-interest income grew by 10.8% from Kshs. 6.4 Billion to Kshs. 7.1
•Net interest income grew by 3.9 per cent from Ksh10.4 billion to Ksh10.8 billion. Total operating expenses increased by 8.8 per cent from Ksh9.0 billion to Ksh9.8 billion.
3. Cost Management
The Group reports considerable efficiency gains from the various initiatives to record a Cost-to-Income Ratio of 46.3 per cent in Q12023, a remarkable improvement from 59 per cent in FY2014 when we began our Growth and Efficiency journey.
4. Credit Management remains a key focus area, with the Group prudentially making provisions of Ksh1.5 billion which has enhanced the Bank's Loan Loss Reserve/Coverage levels to a high of 72 per cent from 69 per cent in 2021.
5. A Strong Digital Footprint
• Through our digital channel strategy, the Bank has successfully moved 91 per cent of all customer transactions to alternative delivery channels, a 24-hour contact centre, 543 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. 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.
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 Ksh19.2 billion disbursed in quarter one of 2023, averaging over Ksh6.4 billion per month.
• Over 174,000 customers have taken up the MSME packages that we rolled out in 2018, and 36,517 have been trained on business management skills. Year to date, we have disbursed Ksh5.6 billion to MSMEs through our Mobile E-Credit solution. MSMEs are a critical part of economic recovery post-Covid and contribute up to 15.9 per cent of our total Loan Book.
• Our unique retail banking model provides access to cash for FOSA operations, enabling 484 FOSA outlets to support over 15 Million Sacco members' access to banking services even in rural/remote areas.
6. Wide Branch Network
The Bank has strategically grown its branch network to 187 Branches (4 in South Sudan). Three new branches (Kenol Makuyu, Hindi and Bamburi) have been opened in 2023, whereas 5 Branches (Kabarnet, Iten, Kasarani, Kamakis and Chwele) were opened last year.
• Co-op Consultancy & Bancassurance Intermediary Ltd posted a Profit Before Tax of Ksh336.4 million in Q12023, riding on strong penetration of the Bancassurance business.
• Co-operative Bank of South Sudan that is a unique joint venture (JV) partnership with the government of South Sudan (Co-op Bank 51 per cent and GOSS 49 per cent), made a Profit before tax of Ksh110 million in Q12023. This performance, however, translated to a monetary loss of Ksh71.3 million attributable to hyperinflation accounting occasioned by currency devaluation of the South Sudanese pound.
Co-op Trust Investment Services Ltd contributed Ksh51.2 million in Profit Before Tax in Q12023, with Funds Under Management of Ksh194 billion compared to Ksh190.2 billion in Q12022.
• Kingdom Bank Limited (A Niche MSME Bank) has contributed a Profit before Tax of Ksh256.3 million in Q12023.
8. External funds from development partners
The Bank signed a Ksh12.6 billion long-term Credit Agreement with global institutional investors led by the German fund, Deutsche Investitions - und Entwicklungsgesellschaft (DEG). The fund will strengthen the bank's capital base and support lending to MSMEs. The facility was drawn in April 2023.
9. Robust Environmental Social and Governance (ESG) Practice
The Bank continues to implement a state-of-the-art ESG policy framework leveraging on an enhanced ESG implementation roadmap, groupwide ESG champions and ESG Governance.
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 10,264 students since inception.
Co-op Bank Capacity-building & Technical Assistance Fund for Farmers' Co-operatives
The Bank has established a dedicated Ksh100 million Fund is aimed at capacity-building, technical support and digitization for farmers' co-operatives.
Under the auspices of the Fund, the Bank has carried out capacity-building for 30 Co-operatives in six Agri-sectors: coffee, dairy, potatoes, poultry, cotton, and cereals. The initiative will impact over 50,000 individual farmers.
The Co-operative Bank Group continues pursuing 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 and the unique synergies in the over 15-million-member co-operative movement that is the largest in Africa.