This archive report was first published on 23 August 2019.
Co-op Bank Posts 5% Growth in Profit Before Tax for First Half of 2019 ¶
Published on August 23, 2019
The Co-operative Bank Group has reported a profit before tax of Kshs. 10.44 billion for the first half of 2019, representing a 5% growth compared to the same period in 2018. This achievement comes despite a challenging economic environment.
The Group's profit after tax stood at Kshs. 7.5 billion, a slight increase from the Kshs. 7.1 billion recorded in the previous year.
According to the Group's financial results, total operating income grew by 5% from Kshs. 21.8 billion to Kshs. 23 billion. Total non-interest income increased by 25% from Kshs. 7 billion to Kshs. 8.8 billion, while interest income from government securities rose by 22% from Kshs. 4.5 billion to Kshs. 5.5 billion.
Meanwhile, total operating expenses remained under control, growing by 5% from Kshs. 11.97 billion to Kshs. 12.6 billion, thanks to a prudent cost management strategy and enhanced efficiency.
The Group's balance sheet also showed significant growth, with total assets increasing by Kshs. 31.2 billion (+8%) to Kshs. 430 billion compared to Kshs. 398.4 billion in the same period last year.
Net loans and advances book grew by 3% from Kshs. 252.1 billion to Kshs. 257.6 billion, while investment in government securities rose by Kshs. 14.8 billion (+18.4%) to Kshs. 95 billion.
Customer deposits grew by 8.3% from Kshs. 300 billion to Kshs. 325 billion, while borrowed funds from development partners increased by Kshs. 3 billion (+16%) to Kshs. 21.5 billion.
Shareholders' funds grew from Kshs. 68 billion to Kshs. 71 billion, and the bank maintained a sound capital base, with adjusted total capital against total risk-weighted assets standing at 16.7%, which is 2.7% above the statutory minimum of 14.5%.
The Group has continued to leverage on the benefits of the 'Soaring Eagle' Transformation Agenda, which has re-tooled and equipped the business with added competitive edge. The Group has also continued with a strategy for continued deepening and dominance in its domain market segment, while reviewing opportunities to grow alternative revenues from other services like Bancassurance and Leasing business.
Through its multi-channel strategy, the Bank has successfully moved 88% of all customer transactions to alternative delivery channels, including mobile banking, an expanded 24-hour contact centre, 585 ATMs, internet, and over 12,956 Co-op Kwa Jirani banking agents.
The Group has also served 2 million account-holders across all sectors, with a key focus on digital banking. The all-telco Mco-op Cash Mobile Wallet has continued to play a pivotal role in the growth of non-funded income, with over 4.6 million customers registered and loans worth over Kshs. 14.4 billion disbursed as at the close of the first half of 2019.
Additionally, the Group has earmarked Kshs. 15.2 billion for MSME lending and has disbursed Kshs. 3.4 billion under the program, which includes 80,249 mobile unsecured business e-loans and 1,162 supply-chain loans disbursed in the first half of 2019 alone.
The Group's subsidiaries, including Co-operative Bank of South Sudan, Co-op Consultancy & Insurance Agency, and Co-op Trust Investment Services, have also contributed significantly to the Group's performance.
Co-op Bank Foundation has provided scholarships for gifted but needy students from all regions of Kenya, with the sponsorship including fully-paid secondary education, full fees for university education, internships, and career openings for beneficiaries.
The Co-operative Bank Group will continue to deliver good performance as it focuses on growing the 8.2 million account-holder base, digital banking, the basket of innovative financial solutions, efficient delivery of services, and multichannel access to retain market position and deliver business growth and profitability in the days ahead.
