Invest Your Money Wisely! Co-operative Bank Explodes With Billions Of Shillings In Profit As Some Banks Are Collapsing #MakeItHappen

The easiest way to tell which bank you should save your money with is just to analyse the profits the bank make in a half a year time.

The Co-operative Bank Group has recorded Profit before tax of Kshs.10.45 billion for Half-year 2016, a 19% growth in profit compared to the same period in 2015 when the bank made 8.75 billion in profit.

The commendable performance is attributable to the significant benefits arising from the bold ‘Soaring Eagle’ Transformation Project that the bank has been implementing since 2014 with a critical focus on cost optimization, improvement in operating efficiencies and innovative customer delivery platforms.

The project has led to the achievement of the following key milestones;

•    Branch Transformation and channel migration whereby more than 87% of our transactions have been moved to alternative channels leading to impressive   channel optimization
•    Sales Force Effectiveness which has seen us maximize on the Bank’s value chain to increase market share by generating new opportunities from the strong 6 Million account-holder base
•    Enhanced credit management systems, processes and tooling to ensure a quality loan book
•    Enhanced Data Analytics which is playing a key role in driving sales with lead generation, proactive credit management and optimum frontline accountability

Operational efficiencies resulting from this project have seen our Cost-to-Income Ratio improve from 58.8% in Dec 2015 to 51.4% in June 2016.

Half Year 2016Business Performance

The Bank has substantially grown the Balance Sheet with Total Assets at over Kshs.363Billion(a +12% growth)supported bya growing customer base now standing at 6 Million account-holders.

Key financial highlights:-

1.    Profit & Loss
•    Total interest income grew by 29% from Kshs16.7 billion to Kshs21.5 billion supported by an 11% growth in earning assets.

•    Total interest expense grew by 43% from Kshs4.91 billion to Kshs7.01 billion mostly attributable to an 11% growth in deposits as well as increased cost of funding

•    Total operating income grew by 20% to Kshs 21.3 billion from Kshs17.7 billion.

•    Fees and commissions on loans and advances increased by 8% from Kshs1.11 billion to Kshs 1.20 billion compared to the same period last year.

•    Total Non-Interest income grew by 15% from Kshs5.97billion to Kshs6.85 billion compared to the same period last year. This countered the 21% rise in Total operating expenses which increased to Kshs10.96 billion in 2016 from Kshs9.06 billion in 2015.

2.    Balance sheet

•    Total assets grew by Kshs 37.9 billion (+12%) toKshs. 363 billion compared to Kshs325.1 Billion in the same period last year.

•    Net loans and advancesbook grew byKshs16.4Billion (8%)to Kshs. 221.3 billion comparedto Kshs. 204.8 Billion in the same period last year.

•    Deposits grew by Kshs. 26.8 billion toKshs. 279.6 billion fromKshs. 252.8 billion last year, an11% increase.

•    Shareholders’ funds grew from Kshs. 47.1 billion to Kshs. 57.9billion, an impressive growth of 23%, supported by a steady retention ofearnings and improved earning over the years.

3.    Innovative Customer Delivery Platforms

•    Successful Universal Banking model and the implementation of Sales Force Effectiveness has seen the Group serve 6 million Account-holders across all sectors supported by our multichannel strategy that includes 144 Branches, 8,765Co-op Kwa Jirani Banking Agents and over 570 ATMs.

•    The versatile Mco-op CashMobile Wallet has continued to play a pivotal role in the growth of non-funded income with over 2.85 Million active customers.

•    Through our multi-channel strategy the Bank has successfully moved 87% of the customer transactions to alternative delivery channels particularly mobile banking, ATMs, internet and Co-op Kwa Jiranibanking Agency outlets.

•    Our unique model of retail banking services through Sacco FOSAs enabled us provide wholesale financial services to over 555 FOSA outlets.The bank has currently issued over 933,928Sacco link cards.

4.    Regional Expansion

Co-operative Bank of South Sudan that is a unique Joint Venture (JV) partnership with Government of South Sudan (Co-op Bank 51% and GOSS 49%)successfully contributes to the Group’s bottom linehaving made a profit of Kshs.29.22millionin Q22016.

The Bank’s regional expansion strategy will involve similar Joint Venture models in other countries notably Rwanda, Uganda, Tanzaniaand Ethiopia in the next 5 years.

5.    Corporate Social Responsibility Programs

•    The bank’s wholly-owned subsidiary Co-op Consultancy & Insurance Agency whose core mandate is to build capacity in the co-operative movement, has carried out over 2000 consultancy and advisory mandates since inception.

•    Co-op Bank Foundation has provided Scholarships for 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 4,255 students since the inception of the program in 2007.

6.    Accolades

The Group has received recognition from the African Banking Awards for Social Responsibility and for being the Best Commercial Bank in Kenya. The Bank has also received the 2015 International Banker Award for Financial Inclusion.