Co-op rides on loan book to record Sh14b profit

Zachary Ochuodho @zachuodho

Co-operative Bank Group has reported an after tax profit of Sh14.3 billion for the period ended December 30, 2019 compared to Sh12.7 billion reported in a similar period in 2018.

The group recorded a 14 per cent improvement in profit before tax to stand at Sh20.7 billion last year compared to Sh18.2 billion recorded in 2018.

Group managing director Gideon Muriuki said the group will continue to focus on digital banking, with the all-telco MCoopCash Mobile Wallet expected to boost non-funded income.

He said the total operating income for the period grew by 10.9 per cent from Sh43.7 billion to Sh48.5 billion, while the growth in operating income was attributed to an increase in total interest income from Sh43.02 billion to Sh43.64 billion supported mainly by interest income from government securities which increased by 16 per cent from Sh9.8 billion to Sh11.4 billion.

Loan advances

“Interest income from loans and advances decreased slightly by 3.5 per cent from Sh33 billion to Sh31.78 billion. Interest expense remained under tight control, increasing marginally by Sh96 million from Sh12.24 billion to Sh12.34 billion,” said Muriuki.

He said the group banked on their “increased dominance” strategy in the domain market segment leveraging on successful penetration of the retail and consumer banking, micro, medium and small enterprises, corporate banking and the co-operative movement to grow alternative income streams from other services like bancassurance and non-funded income streams

Muriuki said the group’s total assets for the period grew by 10.5 per cent from Sh413.4 billion recorded at the close of 2018 to Sh457 billion in 2019.

He said the net loans and advances book grew by Sh21.3 billion (8.7 per cent) to stand at Sh266.7 billion compared to Sh245.41 billion in 2018 adding that the group has continued to leverage on the benefits of the “Soaring Eagle” Transformation Agenda that has re-tooled and equipped the business to deliver the results.

Investment in government securities grew by Sh37.5 billion (46.8 per cent) to Sh117.8 billion compared to Sh80.3 billion in 2018.

Borrowed funds

Customers’ deposits grew by 8.7 per cent from Sh306.1 billion to Sh332.8 billion adding that borrowed funds from development partners grew by Sh2.5 billion (10.3 per cent) to Sh26.4 billion compared to Sh24 billion in 2018.

Shareholders’ funds grew to Sh79.3 billion in 2019 ( 13.6 per cent) from Sh69.9 billion in 2018. This has enabled the bank to continue to pitch for big-ticket deals.

Co-operative Bank of South Sudan posted a profit before tax of Sh240.6 million in 2019, translating into monetary loss of Sh344.7 million attributable to hyperinflation accounting occasioned by currency devaluation of the South Sudanese pound.