Co-op Bank Group makes 10 billion in profit in six months

Co-op Bank Group is pleased to report a Profit Before Tax of Kshs.10.5b for the second quarter of 2021, a commendable 10% growth compared to Ksh.9.6b recorded in the second quarter of 2020.

This represents a strong Profit After Tax of Kshs.7.4b compared to Kshs.7.2b reported in second quarter of 2020.

The bank reported growth in different areas in the same period last year. Notably, Total Assets grew by Kshs.59.1b to Ksh.573b up from Kshs.513b.

In the credit department, net loans and advances book grew by Kshs29b above the previous years Kshs.272b.

Other notable growths include investments in Government securities from Kshs.182b to Kshs.301b.

The group attributes this growth to several factors: A robust Credit Management initiative and the De-centralization of Loan Portfolio Management

In credit management, there’s a Credit Risk Adaptation Project dubbed ‘Project Kilele’ that’s supported by a Global consulting firm which involves an end-to-end assessment of credit risk management practices, an effort to strengthen portfolio assessment and risk frameworks.

Besides, this seeks to enhance collection platforms aligned to the new business operating environment.

The Decentralization of Loan Portfolio Management to the Branches, Lending Units and Relationship Management teams has enhanced collection activities.

The project dubbed ‘3C’ (Connect, Collect, Cure) entails proactive management of the Credit book re-assigned from Remedial Credit to Branches and Business Segments.

Co-op Bank Group also attributes success to A Strong Digital Footprint.

This has enabled the bank move 93% of all customer transactions to alternative delivery channels, an expanded 24-hour contact centre, mobile banking, 576 ATMs, internet banking and over 25,000 Co-op Kwa Jirani banking terminals.

The key focus lies 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 5.2 Million customers registered and loans worth Kshs 33.5 Billion disbursed year-to-date, averaging Kshs. 5.6 Billion per month.

The bank also pursues a unique model of retail banking services through Sacco FOSAs that enables the bank provide wholesale financial services to over 479 FOSA outlets, and issue over 1.4 million Sacco-Link cards.

The group’s Subsidiaries, too, continue to post impressive statistics.

Co-op Consultancy & Insurance Agency posted a Profit Before Tax of Kshs 433.8 Million, riding on strong penetration of Bancassurance business.

However, Co-op Bank of South Sudan – that’s a unique joint venture (JV) partnership with the South Sudan Govt (Co-op Bank 51% and GOSS 49%) returned a monetary loss of Kshs 290 Million in Q22021 attributable to hyperinflation accounting due to currency devaluation of the South Sudanese pound.

Co-op Trust Investment Services contributed Kshs. 47.9 Million in Profit Before Tax in Q22021, with Funds Under Management standing at Kshs. 179.4 Billion.

Kingdom Bank Ltd (which Co-op Bank holds a controlling 90% equity interest), has contributed a Profit Before Tax of Kshs. 275 Million in Q22021.

This is compared to 2020 full year loss of Kshs. 124 Million.

In regard to Long Term Financing for MSME’s, Sustainable Agriculture and Health sectors, the Group secured a long-term financing facility from the IFC (International Finance Corporation) in 2020, amounting to Kshs. 8.25 Billion for on-lending to MSMEs at affordable terms.

The proceeds of the facility will support customers operating Micro, small and medium enterprises (MSMEs) and businesses undertaking climate-smart projects, including agricultural inputs and sustainable agricultural practices, renewable energy, energy efficiency and related areas.

Co-op Group has also partnered with IFC and Philips in a first-of-its-kind support in Africa, for health sector operators towards purchase of essential medical equipment and strengthen their response to COVID-19.

It makes available a US$ 300 million kitty to provide risk-sharing facilities to help small businesses acquire the equipment and tools they need by way of loans and leases.

The Co-op Bank Group continues to execute a proactive mitigation strategy anchored on a strong enterprise risk management framework, to enable uninterrupted access to banking services.