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Co-op bank records Sh15.4 billion pre-tax profit in third quarter 2019

By Sara Okuoro | Nov 14th 2019 | 3 min read
By Sara Okuoro | November 14th 2019
Co-operative Bank Group MD Gideon Muriuki.

Co-operative Bank has reported Sh15.45 billion pre-tax profit for third quarter 2019 compared to Sh14.64 billion recorded in third quarter 2018. A growth of 6 per cent driven by growth in non-funded income and cost control.

Profit after tax was Sh10.9 billion compared to Sh10.3 billion in 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. This has deepened their Financial Inclusion model rooted in the over 15 million-member co-operative movement.

It 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 joint venture with Super Group of South Africa.

The total operating income grew by 9 per cent from Sh32.3 billion to Sh35.2 billion. Total non-interest income increased by 33 per cent from Sh10.6 billion to Sh14.1 billion.  Interest income from government securities increased by 18 per cent from Sh6.9 billion to Sh8.2 billion. And total operating expenses grew by 11 per cent from Sh17.8 billion to Sh17.8 billion on account higher loan loss provision.

Assets grew by Sh36.6 billion (9 per cent) to Sh440.8 billion compared to Sh404.2 billion in the same period last year. Net loans and advances book grew by Sh14.7 billion (6 per cent) from Sh254.2 to Sh268.9 billion.

Investment in Government securities grew by Sh11.4 billion (13.7 per cent) to Sh94.6 billion compared to Sh83.2 billion in first three quarters of 2018.

Customer deposits grew by 9 per cent from Sh296 billion to Sh322.5billion while borrowed funds from development partners grew by Sh3.7 billion (14 per cent) to Sh29.7 billion from Sh26 billion in the previous year.  Shareholders’ funds grew from Sh70.9 billion to Sh73.9 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.

The Bank has 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 Universal Banking model and the implementation of Sales Force 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 CaShMobile 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 Sh27.6 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 Sh15.2 billion for MSME lending and to date we have disbursed Sh5.4 billion under the program.

Retail banking services through Sacco FOSAs enabled us provide wholesale financial services to over 464 FOSA outlets, and issue over 1 million Sacco-Link cards.

Co-operative Bank of South Sudan that is a 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 Sh174.7 million in Q3 2019.

Co-op Consultancy & Insurance Agency contributed Sh511.1 million as at 30th September 2019. And Co-op Trust Investment Services has aggressively grown the funds under management to almost KSh100 billion.

Co-op Bank Foundation has also 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.

The Group has also received several accolades in Q3 including: EMEA Awards (African Banking Awards) 2019, the Bank was named Best Bank in Kenya; and 2019 East African Financial Reporting (FiRe) Awards, the bank was named Overall Winner in the Environmental Sustainability Reporting category.

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