Co-op Bank Reports Ksh 26.8B Profits in Q3 2024

 

Co-op Bank is
pleased to report a Profit Before Tax of Kshs.26.8
Billion for Q32024, a commendable 8.5%
growth compared to Kshs. 24.7 Billion recorded in Q32023. This represents a
Profit after Tax of Kshs. 19.2 Billion
compared to Kshs. 18.4 Billion reported in 2023.

 

The strong
performance by the Bank is in line with the Group’s strategic focus on
sustainable growth, resilience, and agility delivering a competitive Return on Equity
of 21.3%, riding on the ‘Soaring Eagle’ Transformation Agenda.

 

Key Performance highlights:

 

1.  
Financial
Position: The Group has registered strong growth as follows.

 

·      
Total Assets
grew to Kshs.750.8 Billion, a 13.5% growth from Kshs 661.3 Billion in the same
period last year.

·      
Net loans and advances grew to Kshs. 381.3 Billion
from Kshs.378.1 Billion in 2023.

·      
Customer
deposits grew to Kshs. 514.0 Billion, an 18.7% increase from Kshs. 432.8 Billion.

·      
External funds
from development partners stand at Kshs. 58.0 Billion compared to Kshs.65.6
Billion in 2023.

·      
Shareholders’
funds have grown to Kshs. 131.8 Billion, a 22% increase from Kshs. 108.1 Billion
in 2023 driven by the strong growth in retained earnings of Kshs. 16.3 Billion.

pic courtesy

 

2.   Comprehensive Income

 

·      
Total
operating income grew by 10.8% from Kshs. 53.4 Billion to Kshs. 59.2 Billion.

·      
Total
non-interest income grew by 8.2% from Kshs. 20.6 Billion to Kshs. 22.3 Billion.

·      
Net interest
income grew by 12.3% from Kshs 32.8 Billion to Kshs 36.9 Billion.

·      
Total
operating expenses grew by 12.7% from Kshs 29.0 Billion to Kshs. 32.7 Billion.

 

3.   Cost Management

 

The Group
reports excellent efficiency gains from the various initiatives to record a
Cost-to-Income Ratio of 45.8%
in Q32024, from 59% in FY2014 when we began our Growth & Efficiency
journey.

 

4.  
A Strong
Digital Footprint

 

·    
A New
Core Banking System, presenting opportunity for growth and enhanced efficiency

The Bank continues to leverage the new core banking system (latest
version of Finacle from Infosys, one of the best-rated platforms globally), to support
the Group’s digital synergy. The system will further enhance service excellence
and provide innovative and advanced banking solutions.

 

·    
Through our digital channel strategy, the
Bank has successfully moved over 93%
of all customer transactions to alternative delivery channels, a 24-hour
contact centre, 603 ATMs & Cash Deposit Machines
(CDMs), mobile &
internet banking and over 16,000 network of Co-op kwa Jirani agents.

 

·    
Our Omni-channel
platform continues to offer users
accessibility and enhanced experience. The platform interfaces online banking
through personal computers, mobile phones and USSD availing our services to all
customers through their preferred channel yet retain the same user experience
from wherever they are.

 

·    
Mco-op Cash Mobile wallet
continues to drive substantial non-funded income streams with Kshs 55.7 Billion in loans disbursed in
Q32024, averaging Kshs. 6.2 Billion
per month.

 

·    
Over 231,200 customers have taken up the MSME packages
we rolled out in 2018, and 64,100​ have been trained on business management
skills. Year to date, we have disbursed Kshs. 11 Billion to MSMEs through our
Mobile E-Credit solution. MSMEs make up 15.9%
of our total Loan Book. 

 

·    
Our
unique model of retail banking services avails access to cash for FOSA
operations, enabling 690 FOSA outlets to support over 15 million Sacco members access banking
services even in rural/remote areas.

 

 

5.  
Wide and
Expanding Branch Network

The Branch
network has expanded to a total of 204 outlets (5 in South Sudan).

We have planned
15 additional outlets this year, with 8 already opened at these locations; Imaara
Mall-Mombasa Road-Nairobi, Ugunja in Siaya, Luanda, Isibania, Maai Mahiu,
Dagoretti Market, Marimanti and Ruiru Nord Mall.

 

Kingdom Bank
opened its 22^nd branch in Meru County, being the third branch opened
this year.

 

Co-operative
Bank of South Sudan opened its fifth branch in Wau, supporting business growth
and financial inclusion in South Sudan.

 

6.   A Growing Team

The Bank continues to
invest in a competitive team set to serve at existing functions at the same
time tap new growth opportunities across all areas of the business. Staff
Numbers have grown from 4,864 as at the close of 2022 to 5,617, creating
job opportunities for over 753 young people.

 

7.   Subsidiaries

·      
Co-op Bancassurance Intermediary Ltd
posted a Profit Before Tax of Kshs 824.3 Million in Q32024, riding on strong
penetration of Bancassurance business.

·      
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 Kshs 434.7 Million in Q32024.
This performance however translated to a profit of Kshs. 33.8 Million
attributable to hyperinflation accounting occasioned by currency devaluation of
the South Sudan Pound.

·      
Co-op Trust Investment Services Ltd
contributed Kshs. 254.9 Million Profit Before Tax in Q32024 compared to Kshs. 154.5
Million in Q32023, a commendable 65% growth. The Subsidiary has Funds Under
Management currently at Kshs. 299.6 Billion.

·      
Kingdom
Bank Limited (A niche MSME Bank) contributed a Profit Before Tax of Kshs. 929.2
Million in Q32024, a remarkable growth of 18.1% from Kshs. 786.6 Million
reported in Q32023.

 

8.   Commitment to Sustainability

 

In 2022, the
Bank embarked on an enhanced Environmental, Social and Governance (ESG) roadmap
to integrate ESG considerations into its operations with several key milestones
achieved.

 

Supporting
Industry effort on climate risk management

The
Bank is playing an active role in supporting climate change initiatives (IFRS
S1 & S2, Green Finance Taxonomy) that are being led by our regulator
Central Bank of Kenya and the industry lobby group Kenya Bankers Association.
Co-op Bank
has the highest capacity-building rate in Kenya Bankers Association Sustainable
Finance Module XII on Climate Risk.

 

Climate
Risk Project

We have, in line with Sustainable Development Goals
(SDG) number 13 ‘Take urgent action to combat climate change and its impacts’
embarked on a Climate Risk Project with the aim of formulating an effective Climate
Strategy Roadmap and Implementation Plan to chart a clear path towards our
climate goals.