Co-op Bank registers Ksh5.1 billion profit in first quarter of 2019

Image: Co-operative Bank CEO/Managing Director Gideon Muriuki

Co-operative Bank Group has registered a pre-tax profit of Ksh. 5.1 billion for the first quarter of 2019 compared to Ksh. 4.9 billion recorded in the first quarter of 2018.

This is a steady growth of 4.4 per cent against the backdrop of a challenging economic environment in the period. Profit after tax was Ksh 3.6 billion compared to Ksh 3.4 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; which has progressively deepened the Financial Inclusion model rooted in the over 15 million-member co-operative movement, that is the face of Kenya.

Cooperative Bank Group MD Gideon Muriuki (right) and Chairman Stanley Muchiri

The total non-interest income increased by 19.1 per cent from Ksh. 3.5 billion to Ksh. 4.2 billion with interest income from government securities increasing by 39.6 per cent from Ksh. 2.0 billion to Ksh. 2.8 billion.

The operating income grew by 1.7 per cent from Ksh. 10.9 billion to Ksh. 11.1 billion while total operating expenditure decreased by 1.2 per cent from Ksh. 6.1 billion to Ksh. 6.0 billion as a result of prudent cost management strategy and enhanced efficiency.

Assets grew by Ksh. 27.9 Billion (+7 per cent) to Ksh. 425.7 billion compared to Ksh. 397.8 billion in the same period last year.

Net loans and advances book remained relative stable at Ksh. 251.6 billion.

Investment in government securities grew by Ksh 29.0 billion (+38.6 per cent) to Ksh. 103.9 billion compared to Ksh. 75.0 billion in first quarter of 2018.

Customers’ deposits grew by 7.4 per cent from Ksh. 295.9 billion to Ksh. 317.8 billion.

Borrowed funds from development partners grew by Ksh. 3.1 billion (+14.9 per cent) to Ksh. 23.7 billion compared to Ksh. 20.7 billion in the same period the previous year.

Shareholders’ funds grew from Ksh. 67.9 billion to Ksh. 72.8 billion.

The bank closed the quarter with a sound capital base, with adjusted total capital against total risk-weighted assets standing at 16.5 per cent, which is 2.0 per cent above the statutory minimum of 14.5 per cent.

Also read: 5 reasons why the MCo-op Cash app is the best first resort when you’re in a tight financial spot

Through its multi-channel strategy, the Bank has successfully moved 88 per cent of all customer transactions to alternative delivery channels that include self-service kiosks in 155 branches, an expanded 24-hour contact centre, mobile banking, 585 ATMs, internet and over 11,600 Co-op Kwa Jirani banking agents.

A successful universal banking model and the implementation of sales force effectiveness has seen the Group serve 8.2 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 4.3 million customers registered and 1.2 million loans worth over Ksh. 5.1 billion disbursed as at the close of Q1 2019.

Over 26,800 customers have taken up the rolled out MSME packages that Co-op Bank launched in 2018 and 1600 have been trained on business management and planning.

The bank has earmarked Ksh. 15.2 billion for MSME lending and to date we have disbursed Ksh. 3.2 billion under the program.

These include 24,167 mobile unsecured business e-loans and 450 supply-chain loans disbursed in Q1 2019 alone.

Co-op Bank’s unique model of retail banking services through Sacco FOSAs has enabled it to 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 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. 1.7 million in Q1 2019, which was 28.7 per cent higher than Ksh. 32.4 million posted in 2018.

Co-op Bank Foundation has also 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 7,689 students since the inception of the program.

Co-op Bank Headquarters
Co-op Bank Headquarters

About this writer:

David Kingsley

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