August 17, 2022

Sacco Review|The Leading Newspaper for Co-operative Movement in Kenya

The Leading Newspaper for Co-operative Movement in Kenya

Co-op Bank does it again, recording 56% profit before tax

Co-op Bank has recorded a 56% profit before tax.

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At 56 per cent growth in pre-tax profit, nothing seems to be stopping top tier lender’s exploits

By Matumbai Bernard-Boy

The Co-operative Bank of Kenya has maintained its upward trajectory, recording a 56 per cent before tax growth in the first quarter of 2022 as compared to the same period last year.

In a statement dated Thursday, May 26, and made available to the Sacco Review, the top tier lender reported a profit before tax of Sh7.78 billion, a much improved variation from that of the Sh4.98 billion recorded in 2021’s first quarter.

At a corresponding Sh5.8 million in profit after tax – literally dwarfing the Sh3.5 billion the bank realised in the corresponding period last term – Co-op Bank seems not ready to relax its trend-setting exploits, putting on display one robust milestone after another.

This latest fete translates to a Return on Equity of 23.8 per cent to the shareholders, who continue to relish their investments in the high achieving Tier I lender.

Group Managing Director and Chief Executive Officer, Dr Gideon Muriuki, disclosed that the impressive outing was in line with the bank’s strategy, with the highest growth experienced in the bank’s investment in government securities which grew to Sh183.4 billion from Sh166.2 billion in 2021, a significant 10 per cent jump.

In the period under review, the bank also registered a growth in total assets to Sh597.0 billion, up from Sh552.9 billion in the corresponding period last year, with net loans and advances growing to Sh324.5 billion as compared to Sh298.2 billion the previous term.

As if to exude confidence in their bank of choice, customers saw their deposits rise to Sh410.8 billion, a 4 per cent surge, from Sh393.8 billion recorded in 2021.

On the other hand, external funds from development partners stood at Sh43.3 billion up from Sh46.9 billion in the preceding period last year. 

According to the statement, the Group prudentially provided Sh1.5 billion compared to Sh2.3 billion provided in 2021, an improving quality of the bank’s asset book as businesses and households continue to recover from the impact of Covid-19 pandemic.

Co-op Bank also reported a reduced Gross Non-Performing Loan (NPL) Book, at 5 per cent, with its NPL ratio improving to 13.3 per cent against 15.2 per cent in a similar period last year. 

The bank is positive that it has also established a strong digital footprint and has successfully migrated its customers to the Omni-channel, integrating accessibility and user experience.

Co-op Bank’s Omni-channel interfaces online banking through personal computers, mobile phones and USSD, availing its services to all customers through their preferred channel yet retain the same experience from wherever they are.

Thanks to its digital channel strategy, Co-op Bank has successfully moved 94 per cent 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. 

According to the statement, over 151,500 customers took up the MSME packages that Co-op Bank rolled out in 2018, 23,363 of who have since been trained on business management skills.