The Co-operative Bank Group on Friday, November 15, reported a pre-tax profit of Ksh15.45 billion for the third quarter of 2019.
This was a significant improvement compared to Ksh14.64 billion recorded in the same quarter of 2018, a strong 6% growth despite the backdrop of what the bank describes as a challenging economic environment in the period.
Profit after tax was Ksh10.9 billion compared to Ksh10.3 billion in the same period, the previous year.
"The Group continues to leverage on the benefits of the “Soaring Eagle” Transformation Agenda that has re-tooled and equipped the business with added competitive edge as reflected in the sustained growth in market share across all market segments and Counties," a statement signed by Group managing director and CEO, Gideon Muriuki, read.
It has also progressively deepened its celebrated financial inclusion model rooted in the over 15 million-member co-operative movement, that is the face of Kenya.
"The Group has continued with a strategy for continued deepening and dominance in our domain market segment leveraging on our successful penetration of the Micro, Medium and Small Enterprises and the Saccos, while reviewing opportunities to grow alternative income streams from other services like Bancassurance, and leasing business being done through Co-op Bank Fleet Africa Leasing Ltd, a strategic joint venture with Super Group of South Africa," the statement further reads.
Some of the group's key financial highlights included:
1. Profit and Loss
- Total operating income grew by 9 per cent from Kshs 32.3 billion to Ksh 35.2 billion.
- Total non-interest income increased by 33 per cent from Kshs 10.6 billion to Ksh 14.1 billion.
- Interest income from government securities increased by 18 per cent from Ksh 6.9 billion to Ksh 8.2 billion.
- Total operating expenses grew by 11 per cent from Ksh 17.8 billion to Ksh 17.8 billion on account higher loan loss provision.
Balance sheet
- Total assets grew by Ksh 36.6 billion (+9 per cent) to Ksh 440.8 billion compared to Ksh 404.2 Billion in the same period last year.
- Net loans and advances book grew by Ksh 14.7 billion (+6 per cent) from Ksh254.2 to Ksh 268.9 billion.
- Investment in Government securities grew by Ksh11.4 billion (+13.7 per cent) to Kshs. 94.6 billion compared to Kshs. 83.2 billion in first three quarters of 2018.
- Customer deposits grew by 9 per cent from Ksh 296 billion to Ksh 322.5billion
- Borrowed funds from development partners grew by Ksh 3.7 billion (+14 per cent) to Kshs 29.7 billion from Ksh26 billion in the previous year.
- Shareholders’ funds grew from Ksh 70.9 billion to Ksh 73.9 billion.
- The bank closed the quarter on a sound capital base, with adjusted total capital against total risk-weighted assets standing at 15.8 per cent, which is 1.3 per cent above the statutory minimum of 14.5 per cent.
- Innovative Customer Delivery Platforms
- Through our multi-channel strategy, the Bank has successfully moved 89 per cent of all customer transactions to alternative delivery channels that include mobile banking, an expanded 24-hour contact centre, 586 ATMs, internet banking and over 16,000 Co-op Kwa Jirani banking agents.
- A successful Universal Banking model and the implementation of SalesForce Effectiveness has seen the Group serve 8.7 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 over 4.7 Million customers registered and loans worth over Kshs 27.6 billion disbursed as at the close of quarter three 2019.
- Over 56,800 customers have taken up the rolled out MSME packages that we launched in 2018 and 4000 have been trained on business management and planning. We have earmarked Kshs 15.2 billion for MSME lending and to date, we have disbursed Kshs 5.4 billion under the program.
- Our unique model of retail banking services through Sacco FOSAs enabled us to provide wholesale financial services to over 464 FOSA outlets and issue over 1 million Sacco-Link cards.
- Subsidiaries
- Co-operative Bank of South Sudan that is a unique Joint Venture (JV) partnership with Government of South Sudan (Co-op Bank 51 per cent and GOSS 49 per cent) made a Profit before tax of Ksh 174.7 Million in Q3 2019.
- Co-op Consultancy & Insurance Agency contributed Ksh 511.1 million as at 30th September 2019.
- Co-op Trust Investment Services has aggressively grown the funds under management to almost Ksh 100 billion.
- Corporate Social Responsibility Programs
Co-op Bank Foundation has provided 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 so far supported 7,032 students since the inception of the program.
