Co-op Bank Group has reported a profit before tax of Ksh7.78 billion for the first quarter of 2022, an impressive 56% growth from Ksh4.98 billion recorded in the first quarter of 2021. This represents a strong profit after tax of Ksh5.8 billion compared to Ksh3.5 billion reported in 2021. The performance delivers a competitive return on equity of 23.8% to shareholders.
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The strong performance is in line with the Group’s strategic focus on sustainable growth, resilience, and agility. Total Assets grew to Ksh597.0 billion, 8% growth from Ksh552.9 billion in the same period last year. Net loans and advances grew to Ksh324.5 billion, a 9% growth from Ksh298.2 Billion.
Investment in government securities grew to Ksh183.4 billion, a 10% rise from Ksh166.2 Billion in 2021, while customer deposits grew to Ksh410.8 billion, a 4% increase from Ksh393.8 billion.
External funds from development partners stood at Ksh43.3 billion from Ksh46.9 billion in 2021. Shareholders’ funds grew to Ksh102.7 billion, a 10% increase from Ksh93.7 billion in 2021 enabling us to continue pitching for big ticket deals.
“We had excellent gains from our various initiatives with a cost income ratio of 44.6% in Q1 2022 from 59% in FY2014 when we began our growth & efficiency journey,” Dr Gideon Muriuki, Co-operative Bank CEO said. “Credit management remains a key focus area and we have the Credit Risk Adaptation Project dubbed ‘Project Kilele’ supported by a global consulting firm, now in the implementation phase.”
Dr Muriuki said the Group prudentially provided Ksh1.5 Billion compared to Ksh2.3 billion provided in 2021, indicating improving quality of the asset book as businesses and households continue to recover from Covid-19.
The Gross Non-Performing Loan (NPL) Book has reduced by 5% from last year, with NPL ratio improving to 13.3% against 15.2% in a similar period last year. This affirms credit quality and growth strategies and will continue to improve to single digit pre-pandemic NPL levels.
A Strong Digital Footprint
Through its digital channel strategy, Co-op Bank has successfully moved 94% of all customer transactions to alternative delivery channels, an expanded 24-hour contact centre, mobile banking, 541 ATMs, internet banking and over 27,000 Co-op Kwa Jirani agency banking terminals.
Subsidiaries
Co-op Consultancy & Bancassurance Intermediary Ltd posted a profit before tax of Ksh316.9 Million as at 31st March 2022, riding on strong penetration of Bancassurance business.
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Co-operative Bank of South Sudan, which is a unique joint venture (JV) partnership with Government of South Sudan (Co-op Bank 51% and GOSS 49%), returned a profit of Ksh43.9 Million in Q1 2022compared to a loss of Ksh89.1 million in Q12021.
Co-op Trust Investment Services contributed Ksh53.7 Million in Profit Before Tax, with Funds Under Management of Ksh190.2 billion compared to Ksh128.4 billion in March 2021.
Kingdom Bank Limited (a niche MSME bank) contributed a Profit Before Tax of Ksh199.3 million in Q12022compared Ksh126.7 million reported last year representing, a 57% Growth year on year.
Strong Outlook
Dr Muriuki said Co-operative Bank Group continues to execute a proactive mitigation strategy anchored on a strong enterprise risk management framework, to enable uninterrupted access to banking services.
“We shall, riding on the unique synergies in the over 15 million-member co-operative movement that is the largest in Africa, continue to pursue strategic initiatives that focus on resilience and growth in the various sectors as the economy continues to recover,” he said.
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