Co-operative Bank Of Kenya Ltd. · NSEKE:COOP
Co-operative Bank Of Kenya — FY2011 Earnings Presentation
31 slides from Co-operative Bank Of Kenya's earnings presentation, May 10, 2012
Slide 1: Presentation of Year 2011 Financial Results
PRESENTATION OF YEAR 2011 FINANCIAL RESULTS Dr. Gideon Muriuki GROUP MANAGING DIRECTOR & CEO
Slide 2: Profit Before Tax
Profit Before Tax Co-op Bank is pleased to report a Profit Before Tax of Kshs.6.36 billion for the year ended December 31, 2011 representing a commendable 10.2% growth compared to Kshs.5.77 billion recorded in the year 2010.
Slide 3: A Growing Bank
A Growing Bank KES Billions Dec 31, 11 Dec 31, 10 (%) Change Total Assets 168.3 154.3 9% Loan Book (net) 109.4 86.6 26% Government Securities 22.2 34.4 (35%) Total Deposits 142.6 123.9 15% Customer Base 2.3 M 1.6 M 44% Branch Network 94 87 8%
Slide 4: Balance Sheet Growth
Balance Sheet Growth Our growth was mainly underpinned by the growth in our balance sheet notably; Our loan book which grew by Kshs.22.8 billion (26%) as supported by our deposits. Our deposit book grew by 15% to kshs.142 Billion. Our customers base grew by 44% from 1.6 million to 2.3 million
Slide 5: Income Statement
Income Statement KES Billions Dec 31, 11 Dec 31, 10 (%) Change Interest Income 16.39 11.83 39% Interest Expenses 4.50 2.64 70% Net Interest Income 11.89 9.19 29% Fees and Commissions 6.60 5.01 32% FOREX Income 1.01 0.62 63% Total Income 18.34 15.67 17% Loan Loss Provisions 0.71 0.80 (11%) Operating
Slide 6: Key issues to highlight
Key issues to highlight Whereas the performance for the first six months to June 2011 stood at a PBT Kshs.4.2billion, second half of 2011 was challenging owing to high inflation, weakening of the shilling and eventual tightening of the monetary policy, CBR at 18%. Interest rates rose significantly
Slide 7: Sustainable Profitability
Sustainable Growth Sustainable Profitability 7.04 6.36 5- 60 5.0 2 40% shi io) 3.36 oo Y a 3.0 2.32 a < ¥ 2.0 1.0 4 0.0 - - 2007 2008 2009 2010 2011 @Profit before Tax
Slide 8: Loans, Customer Deposits and Total Assets
Sustainable Growth BA K Loans, Customer Deposits and Total Assets 180 + es yy . 9 yy : 160 ~ 140 ~ 120 ~ = 7) 3 3 & c 400 2 Fy 80 8 _ g 7) 8 ® = n 60 < g 40 20 0 2007 2008 2009 2010 2014 BNet loans & advances Customer Deposits Total Assets
Slide 9: Sustainable Growth
Sustainable Growth Co-op Bank remains focused on balance sheet growth and transaction based income as a key driver of our performance. In 2011 the following were the key business drivers that led to our sustained good performance
Slide 10: Transaction Based Income
Transaction Based Income 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:-
Slide 11: Transaction Based Income: Customer Growth
Transaction Based Income Customer Growth During the year, we continued an aggressive customer growth campaign aimed at increasing our customer base. The all inclusive bank staff initiative grew our customer base from 1.6 million customers to over 2.3 million customers registering over 44% growth
Slide 12: County Banking Structure
Transaction Based Income 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 strategi
Slide 13: Expanded ATMs Network
Transaction Based Income Expanded ATMs network We continued investments in ATM network and are now accessible in 426 service points. Also invested in over 30 Auto Banking Centre's with deposit taking capabilities, providing our customers a 24 hour banking service.
Slide 14: Front Office Service Activity (FOSA) Project
Transaction Based Income 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 throug
Slide 15: SACCO Link
Transaction Based Income SACCO Link 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 sup
Slide 16: Mobile Banking
Transaction Based Income Mobile Banking 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 » Balance
Slide 17: Liability Growth
Liability Growth Our good liability growth from Kshs.123.9 billion to Kshs.142.6 billion (15%) was underpinned by :- Growth in number of accounts which increased to over 2.3 million customers; A strong Institutional and Government Banking Sector strategy; The strong growth was against high c
Slide 18: Asset Growth
Asset Growth 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: ASSET BOOK KSh million % Corporate 22,265 19.4% Mortgage 4,989 4.4% MCU 3
Slide 19: Corporate and Trade Finance
Asset Growth Corporate and Trade Finance Our Corporate and Trade Finance book has continued to grow owing to the strengthened capacity. The result has been growth in our Forex income to over Kshs.1.013 Billion Corporate segment has contributed to significant portfolio’s in corporate lending, L
Slide 20: Co-operative Sector Lending
Asset Growth Co-operative Sector Lending The bank has strengthened its focus in this key market segment as a means of financial deepening to the unbanked. We continue to focus on wholesale banking and financial intermediation. Current programmes in place include; KFW small holder irrigation, AFD
Slide 21: Credit Risk Management
Credit Risk Management Prudent 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.
Slide 22: New Business: Co-operative Insurance Company of Kenya
New Business 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
Slide 23: New Business: Agency Banking
New Business Agency Banking To expand our outreach, and take banking services closer to the people, the bank has launched the most aggressive Agency Banking Platform “Co-op Kwa Jirani” We successfully recruited and obtained approval from CBK for over 2,400 agents and over 1,800 are already operati
Slide 24: Cost Rationalisation
Cost Rationalisation 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
Slide 25: Human Resources
Human Resources The key competitive edge for Co-operative Bank group is continued investment in our people. The bank has heavily invested in performance management systems that are tied to compensation. Both local and overseas training remains key with minimum training hours a target for every
Slide 26: Core Banking Software
Core Banking Software The implementation of the core-banking software (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 optimisa
Slide 27: Regional Expansion
Regional Expansion The establishment of Co-operative Bank of Southern Sudan as a joint venture has already been approved by the Government of South Sudan. Final touches on the shareholding structure and roll out are being discussed.
Slide 28: Co-op Bank Foundation
Co-op Bank Foundation The bank has continued to play its co-operate social responsibility role by assisting the needy with the key focus on Education as hereunder; Paying full secondary school fees to over 1,400 students from all over the country The foundation targets bright but needy students P
Slide 29: Dividend Policy
Dividend Policy In view of the good performance, the Board of Directors has recommended a retention of the same dividend paid in 2010 at 40 cents per share in line with our balance sheet growth strategy. The Board of Directors have also approved a bonus share of one (1) for every five (5) ordina
Slide 30: Conclusion
Conclusion The bank has done well scooping the “Bank of the Year in Kenya Award” by Financial Times of London for two consecutive years, 2010 and 2011. We are optimistic that the challenging economic environment will ease with inflation and interest rates coming down. This being an election ye
Slide 31: Thank you
Thank you and may God richly bless you all.
Co-operative Bank of Kenya — FY2011 Earnings Presentation on 6ix