Co-op Bank reports an hefty Ksh22.6B Profit before Tax for the year 2021

Co-op Bank Group is pleased to report a Profit Before Tax of Kshs. 22.6 Billion for the full year 2021, a strong 59% growth compared to Kshs. 14.3 Billion recorded in Full Year 2020.

This represents a commendable Profit After Tax of Kshs. 16.5 billion compared to Kshs. 10.8 Billion reported in 2020.

Key Highlights:
Financial Position:

The Group has registered sustained growth as follows;

• Total Assets grew to Kshs. 579.8 Billion, a +8% growth from Kshs 536.9 Billion in year 2020
• Net loans and advances book grew to Kshs. 310.2 Billion, a +8% growth from Kshs.286.6 Billion in year 2020
• Investment in Government securities grew to Kshs. 184.1 Billion from Kshs. 161.9 Billion in 2020, a +14% growth.
• Customer deposits grew to Kshs 407.7 Billion, a +8% growth from Kshs. 378.6 Billion.
• Borrowed funds from development partners stood at Kshs 42.9 Billion from Kshs.46.0 Billion in 2020.
• Shareholders’ funds grew to Kshs. 100.2 Billion (+10%) from Kshs. 90.7 Billion in 2020 enabling us to continue pitching for big ticket deals.

Comprehensive Income

• Total operating income grew by 12% from Kshs 53.8 Billion to Kshs 60.4 Billion.
• Total non-interest income grew by 11% from Kshs 17.5 Billion to Kshs 19.4 Billion.
• Net interest income grew by 13% from Kshs 36.3 Billion to Kshs 41.0 Billion.
• Total operating expenses improved by 3% from Kshs 39.4 Billion to Kshs. 38.1 Billion.

Increased Market Dominance

A successful Universal Banking model and the implementation of Sales Force Effectiveness has seen the Group serve over 9 million Account holders across all sectors.

Through our multi-channel strategy, the Bank has successfully moved 94% of all customer transactions to alternative delivery channels, an expanded 24-hour contact centre, mobile banking, 561 ATMs, internet banking and over 26,000 Co-op Kwa Jirani agency banking terminals.

Key focus 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 5.3 Million customers registered and loans worth Kshs 71.2 Billion disbursed year-to-date, averaging Kshs. 6 Billion per month.

Over 144,000 customers have taken up the MSME packages that we rolled out in 2018, and 19,963 have been trained on business management skills.

To date, we have disbursed Kshs. 42.5 Billion to MSMEs through our E-Credit solution.

Our unique model of retail banking services through Sacco FOSAs enabled us provide wholesale financial services to over 464 FOSA outlets.

Proactive Credit Management remains a key focus area supporting Loan Assets growth;

The Credit Risk Adaptation Project dubbed ‘Project Kilele’ supported by a Global consulting firm, now in the implementation phase.

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

The successful project, aimed at enhancing collection activities, has advanced to Project Connect & Build (CB). The project is aimed at:
Identifying more business opportunities for loan book growth.

Engaging existing & potential customers with a view to establishing/enhancing their needs and co-create solutions.

Increasing customers’ product-holding.
Sustaining the best practices learnt under the Decentralization of Loan Portfolio Management and Project Kilele above.

The Group prudentially provided Kshs. 7.9 Billion in loan loss provisions compared to Kshs 8.1 billion provided in 2020 indicating improving quality of our asset book as businesses and households continue to recover from the impact of Covid-19 pandemic.

Subsidiaries

Co-op Consultancy & Bancassurance Intermediary posted a Profit Before Tax of Kshs 803.9 Million as at 31st December 2021, 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%) returned a monetary loss of Kshs 421.7 Million in FY2021 attributable to hyperinflation accounting due to currency devaluation of the South Sudanese pound.

Co-op Trust Investment Services contributed Kshs. 140.4 Million in Profit Before Tax in FY2021, with Funds Under Management of Kshs. 189.2 Billion compared to Kshs. 127.5 Billion in December 2020.

Kingdom Bank Limited (former Jamii Boar Bank) has contributed a Profit Before Tax of Kshs. 512.4 Million in FY2021.

Long Term Financing: MSME, Sustainable Agriculture & Health sectors.

In 2020 the Group secured a long-term financing facility from the IFC (International Finance Corporation) amounting to Kshs. 8.25 Billion for on-lending at affordable terms to MSMEs involved notably in climate-smart projects, sustainable agricultural practices and clean energy.

Partnered in the US$ 300 million IFC-led Africa Medical Equipment Facility and Philips (a leading health technology company) to support Africa’s health sector operators purchase essential medical equipment and strengthen their response to COVID-19 and other medical technology needs.

The Group secured a US$ 10 Million credit line in partnership with Eco.business Fund to finance Sustainable Agriculture.

Corporate Social investment

Co-operative Bank Foundation has continued to provide annually over 650 Scholarships to gifted but needy students from all regions of Kenya.

The sponsorship includes fully paid secondary education, full fees for University education, Internships and career openings for beneficiaries.

The foundation is fully-funded by the bank and has so far supported 8,842 students since the inception of the program.

Accolades
The Group appreciates the recognition and Awards received in 2021, notably the following EMEA Awards (African Banking Awards);

The Best Bank CEO in Africa Award, awarded to Dr Gideon Muriuki, Group Managing Director & CEO, Co-op Bank with the following citation;

The Board of Directors’ bold decision to sustain the same level of dividend payments to shareholders despite the Covid-19 crisis offered a most timely relief, especially to the over 15 Million-Member Co-operative Movement, whose livelihoods would have been severely impaired had the dividend been withheld.

The Bank notably also sustained a relentless focus on Staff Wellness with the unprecedented challenges occasioned by the Covid-19 pandemic; notably it undertook a bank-wide analysis to identify and address manpower inefficiencies spurred by the disruption, with a critical focus on staff redeployment/retention other than redundancies.

The Best Bank in Kenya Award, and as Best Bank in Financial Inclusion -Africa, with the citation;

Bank subsidiary Co-optrust Investments Services was named Best Asset Manager in Kenya; now has an Asset Base of over Kshs. 189.2 Billion under management.