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Co-op new strategy lifts profit to Sh14 billion

By Peter Theuri | March 20th 2020 at 06:30:00 GMT +0300

Coop Bank Managing Director Gideon Muriuki says penetration of the retail and consumer banking boosted income. [File, Standard]

Cooperative Bank Group recorded a growth of 12.6 per cent in profit after tax for the full year ending December 31, 2019. The bank registered a profit after tax figure of Sh14.3 billion in the year, up from Sh12.7 billion in 2018.

The Soaring Eagle Transformation Agenda, a strategy that taps into the bank’s 15 million customers has been a major driver in the growth.

This, alongside penetration of the retail and consumer banking, micro, medium and small enterprises and the co-operative movement saw its total operating income grow 10.9 per cent, from Sh43.68 billion to Sh48.46 billion.

Income streams

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Other boosters were alternative income streams services such as bancassurance and non-funded income streams.

“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,” said Group Chief Executive Gideon Muriuki.

“This has progressively deepened our financial inclusion model rooted in the over 15 million-member co-operative movement that is the face of Kenya.”

The lender’s interest income from loans and advances decreased by 3.5 per cent from Sh32.95 billion in 2018 to Sh31.78 billion last year.

Interest expense also noted a slight increase, growing from Sh12.24 billion to Sh12.34 billion. The bank, which is in negotiations with Jamii Bora Bank to acquire 100 per cent shareholding, registered a total assets growth of Sh43.6 billion - from Sh413.4 billion recorded at the close of the year 2018 to Sh457billion.

Acquisition of Jamii Bora Bank, which has over 350,000 customers in 17 branches and an asset base of Sh12.5 billion, will spread Cooperative Bank’s tentacles even further.

“The acquisition offers Co-op Bank the opportunity to cross-sell and deepen product offering to the enhanced customer base,” said Muriuki.

Muriuki noted that hyperinflation accounting, occasioned by currency devaluation of the South Sudanese pound, led to losses worth Sh344.7 million in Co-operative Bank of South Sudan, a joint venture partnership between Cooperative Bank and the Government of South Sudan.


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