Dr. Gideon Muriuki GROUP MANAGING DIRECTOR & CEO. PRESENTATION OF YEAR 2011 FINANCIAL RESULTS. Profit Before Tax.
GROUP MANAGING DIRECTOR & CEO
Co-op Bank is pleased to report a Profit Before Tax of Kshs.6.36 billionfor the year ended December 31, 2011 representing a commendable 10.2%growth compared to Kshs.5.77 billion recorded in the year 2010.
Our fees and commissions (notably ATM, personal and business banking commissions, M-Banking, Forex income and letters of credit) have grown to KSh.7.6 Billion in 2011out of the following key initiatives:-
County Banking Structure
In line with the new constitution, we performed a strategic positioning of our outlets and realised a need for additional 42 branches / outlets. 7 were opened in 2011 and the rest are on course to be opened in 2012.
The expansions target strategic locations based on their profiles and business potential from our chosen market segments.
Expanded ATMs network
Front Office Service Activity (FOSA) Project
Co-operative movement continue to be core and are thus retailing banking services through Sacco’s / Fosa’s to the over 7 million members using this unique model.
We continue to provide corporate finance capacity support through our subsidiary Co-operative Consultancy and Insurance Agency Limited aimed at increasing the number of Sacco FOSA’s.
Currently over 418 FOSA's are operational with our key focus being to increase our products such as sacco link debit card and payments systems offering through them and maximise commissions and other revenues.
This ICT switch enables members of Sacco’s cash at our ATM’s and goods/services at Visa branded outlets globally.
The numbers continue to grow now with over 420,000 cards been issued up to 2011 and targeting over 600,000 users by end of 2012
This is well supported by the increased investment in ATMs and POS’s.Transaction Based Income
We have enhanced our mobile banking service the M-Banking platform now with a client base of 769,000 customers and growing.
Our customers are able to access a wide range of services such as:-
Air-time top ups
Money transfer to and from Mpesa
Utility payments among others
School Fees payments (Mkaro)
Account to account transfers and alerts
The Bank continued to grow quality assets with increased investments in a strong credit risk management framework. Our portfolio stood at KShs.114.6 billion gross on a well diversified loan portfolio as hereunder:
Corporate and Trade Finance
Co-operative Sector Lending
The bank continued to enforce strict credit risk management especially with high interest rates.
The bank made adequate provisions for bad and doubtful debts amounting to Kshs.710 million in 2011.
Co-operative Insurance Company of Kenya Limited (CIC)
The Banks shareholding in CIC (K) Ltd of 26.57% makes it the substantial/ single largest shareholder.
The investment contributed over Kshs. 153.9 million in 2011.
The bank thus continues to strengthen its financial supermarket model by providing insurance services in addition to fund management and stock brokerage services.
The new venture has resulted in increased commision incomes, thus offering a diversified investment portfolio to shareholders.
To expand our outreach, and take banking services closer to the people, the bank has launched the most aggressive Agency Banking Platform “Co-op KwaJirani”
We successfully recruited and obtained approval from CBK for over 2,400 agents and over 1,800 are already operational.
We took time on designing the product features and the POS platform which has been superbly received in the market place with already over 60,000 transactions per day.
The impact has been increased transaction incomes
We endeavour to operationalize over 4,000 agents by end of 2012.New Business
Our branch expansion strategy particularly with county structure of Government remained on course with the acquisition and establishment of most of the 42 outlets completed in 2011. These are expected to contribute positively to the bottom line in 2012 / 2013
All cost lines continue to be monitored to eliminate waste and avoid budget overruns.Cost Rationalisation
The implementation of the core-banking software structure of Government remained on course with the acquisition and establishment of most of the 42 outlets completed in 2011. These are expected to contribute positively to the bottom line in 2012 / 2013(Bank Fusion Universal Banking-BFUB) from Misys is progressing well and is aimed at positioning the Bank for future growth.
Our estimated go live date is third quarter 2012 which will come with immense efficiency and optimisation benefits.Core Banking Software
The bank has continued to play its co-operate social responsibility role by assisting the needy with the key focus on Education as hereunder;
Thank you structure of Government remained on course with the acquisition and establishment of most of the 42 outlets completed in 2011. These are expected to contribute positively to the bottom line in 2012 / 2013
may God richly bless you all.