Co-operative Bank Group has recorded an 11% growth in profit before tax for the year ending December 31, 2018, which stood at Ksh 18.2 billion compared to Ksh 16.4 billion realised in 2017. Profit after Tax was Ksh 12.7 billion compared to Ksh 11.4 billion in the previous year.
Group Managing Director and CEO Dr Gideon Muriuki said the lender’s operating model has equipped the business with added resilience to achieve the set strategic objectives, as reflected in the commendable performance in the period under review.
“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 our celebrated financial inclusion model rooted in the over 15 million-member co-operative movement, that is the face of Kenya,” said Muriuki in a statement.
Total interest income improved by 7% from Ksh 40.37 billion to Ksh 43.02 billion on account of interest income from government securities increasing by 19% from Ksh 8.21 billion to Ksh 9.79 billion and interest income from loans and advances increasing by 3% from Ksh 31.94 billion to Ksh 32.95 billion.
According to Muriuki, total interest expense remained under tight control, falling by Ksh 300 million from Ksh 12.27 billion to Ksh 12.24 billion. This was despite a 7% growth in deposits indicating improved management of the cost of funds. Total operating income grew by 5% from Ksh 41.6 billion to Ksh 43.68 billion.
The CEO revealed that total assets grew by Ksh 26.5 billion (+7%) to Ksh 413.41 billion from Ksh 386.86 billion recorded at the close of year 2017.
Net loans and advances book declined marginally (-3%) to stand at Ksh 245.41 billion compared to Ksh 253.86 billion in 2017.
Investment in Government securities grew by Ksh 11.03 billion (+16%) to Ksh 80.27 billion compared to Ksh 69.24 billion in 2017.
Customers deposits grew by 7% from Ksh 287.37 billion to Ksh 306.12 billion while borrowed funds from development partners grew by Ksh 2.79 billion (+13%) to Ksh 23.95 billion compared to Ksh 21.16 billion in 2017. Shareholders’ funds grew to Ksh 69.86 billion in 2018 that enables the bank to continue to pitch for big ticket deals.
Through its multi-channel strategy, Muriuki said the bank has successfully moved 91% of all customer transactions to alternative delivery channels that include self-service kiosks in 155 branches, an expanded 24-hour contact centre, mobile banking, 580 ATMs, internet and over 11,000 Co-op Kwa Jirani banking agents.
He added a successful universal banking model and the implementation of sales force effectiveness has seen the Group serve over eight million account holders across all sectors.
The lender is focusing 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 four million customers registered.
“Our unique model of retail banking services through Sacco FOSAs enabled us provide wholesale financial services to over 464 FOSA outlets, and issue over one million Sacco-Link cards,” he said.
On regional expansion, Muriuki said the 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%) made a Profit before tax of South Sudanese pounds (SSP) 897.3 Million in 2018 which was 368% higher than SSP 192 Million posted in 2017. This performance however translated to a monetary loss of Ksh 16.4 million in 2018 attributable to hyperinflation accounting occasioned by currency devaluation of the South Sudanese pound.
The Board of Directors has recommended for approval by the AGM the payment of a dividend of Ksh 1.00 per every ordinary share held subject to approval by the Capital Markets Authority. This will represent a growth of 25% compared to a dividend of Ksh 0.80 paid in 2017.
Dr Muriuki said the the Co-operative Bank Group will continue to deliver strong performance as it
focuses on the growing eight 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.