Co-op Bank Group is pleased to report a Profit Before Tax of Kshs. 10.5 Billion for the second quarter of 2021, a commendable 10% growth compared to Kshs. 9.6 Billion recorded in the second quarter of 2020.
This represents a strong Profit After Tax of Kshs. 7.4 billion compared to Kshs. 7.2 Billion reported in
second quarter of 2020.
Key highlights; –
1. Financial Position; The Group has registered sustained growth as
Total Assets grew by Kshs 59.1 Billion) (+12%) to Kshs. 573 Billion
compared to Kshs 513.9 Billion in the same period last year.
Net loans and advances book grew by Kshs 29 Billion (+11%) from
Kshs.272.2 Billion to Kshs. 301.2 Billion.
Investment in Government securities grew by Kshs.59.6 Billion (+49%) to
Kshs. 182 Billion compared to Kshs. 122.4 Billion in 2020.
Customer deposits grew by 6% from Kshs. 384.6 Billion to Kshs 407.7
Borrowed funds from development partners grew by Kshs. 18.8 Billion
(+73%) to Kshs 44.4 Billion from Kshs.25.6 Billion in 2020.
Shareholders’ funds grew to Kshs. 92.6 Billion (+16%) from Kshs. 80.1
Billion in 2020 enabling us to continue pitching for big ticket deals.
2. Comprehensive Income;
Total operating income grew by 20% from Kshs 24.2 Billion to Kshs 29.2
Total non-interest income grew by 24% from Kshs 8.3 Billion to Kshs 10.3
Net interest income grew by 18% from Kshs 15.9 Billion to Kshs 18.8
Total operating expenses grew by 28% from Kshs 14.6 Billion to Kshs. 18.7
Billion on account of 123% prudential growth in loan-loss provisions.
3. Credit Management remained a key focus areas in this season notably with
the following key interventions;-
a. The Credit Risk Adaptation Project dubbed ‘Project Kilele’ supported
by a Global consulting firm;
End-to-end assessment of credit risk management practices by
undertaking a comprehensive diagnostic review touching on each
area of credit risk, including credit risk management framework
with a key focus on risk governance, credit risk appetite,
origination and underwriting process, credit approval process,
credit scoring/rating models, and pricing.
Strengthen portfolio assessment and risk frameworks.
Enhance Collection platforms aligned to the new business operating
The project is now in the implementation phase with ‘quick wins’
being realized in underwriting process with improved turnaround time
in our lending operations, monitoring based on our new Early Warning
System and Collections with Client-Level Action Plans.
b. The Decentralization of Loan Portfolio Management, to the
Branches, Lending Units and Relationship Management teams to
enhance 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.
The Group prudentially increased loan loss provisions to Kshs. 4.2 Billion in the
second quarter of year 2021, in appreciation of the challenges that businesses
and households continue to face due to the economic effects of the ongoing
We continue to actively engage our customers to support them through this
period, by re-aligning the servicing of facilities, funding and transactional needs
as the situation unfolds. A total of Kshs. 49 Billion in loans was restructured
during the CBK restructure window that ended on 31 st March 2021 to support
customers impacted by the pandemic.
The restructured facilities are largely performing as per the realigned
agreements. Our customers continue to show resilience therefore improving
their repayment as the economy picks up in various sectors.
4. A Strong Digital Footprint;
Through our multi-channel strategy, the Bank has successfully moved 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.
A successful Universal Banking model and the implementation of Sales
Force Effectiveness has seen the Group serve over 8.8 million Account
holders across all sectors.
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 5.2 Million customers registered and loans worth Kshs 33.5
Billion disbursed year-to-date, averaging Kshs. 5.6 Billion per month.
Over 127,760 customers have taken up the MSME packages that we rolled
out in 2018, and 13,015 have been trained on business management skills.
To date we have disbursed Kshs. 28 Billion to MSMEs through our E-Credit
Our unique model of retail banking services through Sacco FOSAs enabled
us provide wholesale financial services to over 479 FOSA outlets, and issue
over 1.4 million Sacco-Link cards.
Co-op Consultancy & Insurance Agency posted a Profit Before Tax of Kshs
433.8 Million as at 30 th June 2021, riding on strong penetration of
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 290 Million in Q22021 attributable
to hyperinflation accounting due to currency devaluation of the South
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 compared to Kshs. 120.3 Billion as at Q22020.
Kingdom Bank Limited has contributed a Profit Before Tax of Kshs. 275
Million in Q22021. This is compared to 2020 full year loss of Kshs. 124
Co-op Bank holds a controlling 90% equity interest in Kingdom Bank, which
is a fully-fledged Commercial Bank, regulated by the Central Bank of
Kenya, with over 444,000 customers and 17 branches.
6. Long Term Financing: MSME, Sustainable Agriculture and 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 to MSMEs at affordable terms. The proceeds of the facility will
support customers operating in the following key business areas;
Micro small and medium enterprises (MSMEs)
Businesses undertaking climate-smart projects, including
agricultural inputs and sustainable agricultural practices, renewable
energy, energy efficiency and related areas.
We have partnered with IFC 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. This partnership is the first in Africa under the
IFC-led Africa Medical Equipment Facility that 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 Group also secured a US$ 10 Million credit line in partnership with
Eco.Business Fund to finance Sustainable Agriculture.
7. Co-op Bank launches Kenya’s first Pension-Backed Mortgage;
Following the enactment of the amendments to the Tax Act 2020, Retirement
Benefits (Mortgage Loans) Regulations Amendments 2020, we rolled out a
Pension-Backed mortgage facility whereby members currently contributing to a
registered pension scheme, who are still in active employment, can access up to
40% of their accumulated pension benefits for the purpose of acquiring a
residential property for own occupation.
A first in the market, the facility is expected to be a game-changer in
accelerating home ownership for the over 3 million Kenyans currently
contributing to registered retirement benefits schemes.
The Co-op Bank Pension-backed Mortgage will support contributors whose 40%
accrued pension may not be sufficient to purchase a home to apply for a top-up
facility to meet the cost of acquiring a home.
8. Corporate Social investment;
Co-operative Bank Foundation has provided 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 8,340 students since the inception of the program.
The Co-operative Bank Group continues to execute a proactive mitigation
strategy anchored on a strong enterprise risk management framework, to enable
uninterrupted access to banking services. We shall, riding on the unique
synergies in the over 15 million-member co-operative movement that is the
largest in Africa, continue to pursue strategic initiatives that focus on resilience
and growth in the various sectors as the economy continues to recover.