Co-op Bank Profit For 2022 Hits Sh29.4B, Dividend Up 50%

Co-operative Bank Group has reported a profit before tax of Ksh29.4 billion for the full year 2022, a 30% growth from Ksh22.6 billion in 2021. This represents a strong profit after tax of Ksh22 billion, compared to Ksh16.5 billion reported in 2021.

Co-op Bank Managing Director & CEO says Gideon Muriuki says the strong performance is in line with the group’s strategic focus on sustainable growth, resilience and agility. “The Co-operative Bank Group continues to pursue strategic initiatives that focus on resilience and growth in the various economic sectors,” Dr Muriuki said.

“This is anchored on a successful universal banking model supported by an innovative digital presence, a wide physical footprint and the unique synergies in the over 15-million-member co-operative movement that is the largest in Africa.”

Meanwhile, the strong performance has led to a sustained increase in shareholder value as reflected in the competitive return on equity of 21.2%. The Board of Directors has recommended a dividend of Ksh1.50 per share, subject to approval by the regulators and shareholders. The proposed dividend represents a 50% increase on the Ksh1 per share paid out last year.

Key Performance highlights

Total Assets grew to Ksh607.2 billion, a 4.7% growth from Ksh579.8 billion in the same period last year. Net loans and advances grew to Ksh339.4 billion, a 9.4% growth from Ksh310.2 billion in 2021, while customer deposits grew to Ksh423.8 billion, a 3.9% increase from Ksh407.7 billion.

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According to the financial report, external funds from development partners stands at Ksh48.1 billion from Ksh42.9 billion in 2021. Shareholders’ funds have grown to Ksh107.7 billion, a 7.4% increase from Ksh100.2 billion in 2021.

Comprehensive Income

Total operating income grew by 17.9% from Ksh60.4 billion to Ksh71.3 billion. Total non-interest income grew by 32.7% from Ksh19.4 billion to Ksh25.7 billion. Net interest income grew by 10.9% from Ksh41 billion to Ksh45.5 billion. Total operating expenses increased by 10.9% from Kshs 38.1 Billion to Ksh42.2 billion.

Cost Management

“Co-op Bank Group reported excellent efficiency gains from the various initiatives to record a cost-to-income ratio of 47.1% in the financial year 2022 from 59% in 2014 when we began our Growth-Efficiency journey,” says Dr Muriuki.

He said credit management remains a key focus area, with the group prudentially making provisions of Ksh8.7 billion which has enhanced the bank’s loan loss reserve/coverage levels to 74% from 69% in 2021.

Strong Digital Footprint

Through its digital channel strategy, the Co-op Bank has successfully moved 92% of customer transactions to alternative delivery channels, a 24-hour contact centre, 542 ATMs, mobile & internet banking and more than 17,000 network of Co-op kwa Jirani agents.

“We have successfully migrated our customers to  the  Omni-channel, integrating accessibility and user experience. Our omni-channel interfaces online banking through personal computers, mobile phones and USSD, availing our services to all customers through their preferred channel,” he said.

The all-telco Mco-op Cash Mobile Wallet continues to play a pivotal role in the growth of non-funded income with 5 million customers registered and loans worth Ksh84.2 billion disbursed year-to-date, averaging over Ksh7 billion per month.

Over 170,000 customers have taken up the MSME packages that were rolled out in 2018, and 33,673 have been trained on business management skills.  Year to date, Co-op Bank has disbursed Ksh25.4 billion to MSMEs through our Mobile e-Credit solution.

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“MSMEs are a critical part of economic recovery post-Covid and contribute up to 16.9% of the bank’s total loan book. “Our unique model of retail banking services through Sacco FOSAs enabled us provide wholesale financial services to over 484 FOSA outlets,” he says.

A virtual Annual General Meeting will be held on 19^th Friday, May 2023.

Subsidiaries

Co-op Consultancy & Bancassurance Intermediary Ltd posted a Profit Before Tax of Ksh1.01 Billion in  FY2022,  riding on  strong penetration of Bancassurance business.

Co-operative Bank of South Sudan, which is a unique joint venture partnership with Government of South Sudan (Co-op Bank 51% and GOSS 49%) returned a profit of Ksh132.7 Million in FY2022 compared to a loss of Ksh421.7 million in FY2021, a 131% growth.

Co-op Trust Investment Services contributed Ksh208.1 million in profit before tax in FY2022, with Funds Under Management of Ksh196.6 billion compared to Ksh189.2 billion in December 2021. Kingdom Bank Limited (a Niche MSME Bank) contributed a profit before tax of Ksh803.8 million in FY2022.

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