Co-operative Bank Of Kenya Ltd. · NSEKE:COOP
Co-operative Bank Of Kenya — H1 2010 Earnings Presentation
30 slides from Co-operative Bank Of Kenya's earnings presentation, 2010
Slide 1: Presentation of 2010 Half Year Financial Results
PRESENTATION OF 2010 HALF YEAR FINANCIAL RESULTS Gideon Muriuki, OGW GROUP MANAGING DIRECTOR & CEO
Slide 2: Profit Before Tax
Profit Before Tax Co-op Bank is pleased to report a remarkable Profit Before Tax of Kshs.2.91 billion for the period ended June 30, 2010 representing a commendable 50% growth compared to Kshs.1.94 billion recorded during the same period in year 2009.
Slide 3: A Growing Bank
A Growing Bank KES Billions Jun 30, 10 Jun 30, 09 (%) Change Total Assets 134 93 44% Loan Book (net) 70 57 23% Total Deposits 110 74 49% Shareholders 18 15 20% Funds Customer 1,253,239 812,406 54% Base
Slide 4: Income Statement
Income Statement KES Billions Jun 30, 10 Jun 30, 09 (%) Change Net Interest 4.1 3.1 32% Income Fees and 2.9 2.0 45% Commissions Total Income 7.0 5.2 35% Loan Loss 0.4 0.2 100% Provisions Operating 3.7 3.0 23% Expenses Profit Before Tax 2.9 1.9 50%
Slide 5: Sustainable Profitability
Sustainable Growth Sustainable Profitability 4.00 3.74 3.40 3.50 2.91 PBT (KShs Billions) 3.00 2.50 2.30 2.00 1.50 1.30 1.00 0.71 0.50 0.36 0.10 0.18 - 2002 2003 2004 2005 2006 2007 2008 2009 JUN 10 YEAR
Slide 6: Sustainable Growth
Sustainable Growth Co-op Bank remains focused on sustainable growth as its key objective of deepening shareholder value During the six months the following were the key business drivers that lead to these excellent results:-
Slide 7: 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 from KSh2.04 billion in June 2009 to KSh.2.94 billion in June 2010 out of the following key initiatives:-
Slide 8: 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 800,000 customers to over 1.2 million customers registering a 54% growth. Gro
Slide 9: Transaction Based Income: Branch Network Expansion
Transaction Based Income Branch Network Expansion We have increased our branch network by 9 locations since January 2010 to reach 83 locations. The expansions target strategic locations based on their profiles and business potential from our chosen market segments.
Slide 10: Expanded Automated Teller Machines (ATMs) network
Transaction Based Income Expanded Automated Teller Machines (ATMs) network We continued to increase our investments in ATM network and are now accessible in 299 service points. Also invested in over 20 Auto Banking Centre's with deposit taking capabilities hence providing our customers a 24 hour
Slide 11: Front Office Service Activity (FOSA) Project
Transaction Based Income Front Office Service Activity (FOSA) Project We continued retailing banking services through Sacco’s / Fosa’s to the over 7 million member co- operative movement using this unique model. Examples are:- Loan products Sacco link debit cards Payment systems Through ou
Slide 12: 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. Over 250,000 cards have been issued and the product targets over 400,000 users this year. This is well supported by an increased investment in ATM
Slide 13: Mobile Banking
Transaction Based Income Mobile Banking We have enhanced our mobile banking service the M-Banking Our customers can now access a wide range of services such as:- » Air-time top ups » Money transfer to and from Mpesa » Balance enquiry » Utility payments among others An active client base of ove
Slide 14: 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 KSh70 billion net on a well diversified loan portfolio as hereunder: ASSET BOOK KSh million % Corporate 13,292 19% Mortgage 340 .50% SME & MCU 5,083
Slide 15: Corporate and Trade Finance
Asset Growth Corporate and Trade Finance The bank has strengthened capacity thus growing the corporate book The results have been growth in the Forex to over kshs370million The bank is now a key player in the corporate market with significant portfolio’s e.g. has an Letters of Credit / Guarant
Slide 16: Institutional and Government Banking
Asset Growth Institutional and Government Banking Substantially grown our portfolio in this sector with key contributions to the balance sheet growth and non funded income streams We continue to be a niche market provider of banking services
Slide 17: Mortgage
Asset Growth Mortgage Our product “Good Home Mortgage” is fast growing and continues to perform well in the market. With the Co-operative captive market segment, this will be a cash cow for the bank. The product has over Kshs2billion in committed lines
Slide 18: Agri-business
Asset Growth Agri-business mainly coffee sector that was substantially reduced with the KShs5.2 billion debts write off in the year 2007, and is now supported by the Stabex revolving fund grant We have diversified our agri-business products including maziwa loans thus growing a good book.
Slide 19: Credit Risk Management
Credit Risk Management Prudent Lending With key hard lessons from our yester years when we incurred losses, the bank has continued to enforce strict credit risk management and our overall non performing loans portfolio decreased from 9% in 2009 to 7.7% in 2010. The bank has proactively grown a d
Slide 20: Kingdom Securities Limited (KSL)
New Business Kingdom Securities Limited (KSL) KSL has made a full turnaround with a PBT of KSh 15 million as at June 30, 2010 against a loss of KSh 8 million in June 30, 2009. Broadening the group’s performance by taking stock brokerage services to the over 7 million member co-operative movement
Slide 21: Alternative Banking Channels (ABCs)
New Business Alternative Banking Channels (ABCs) Taking cognisance of the importance of expanding our outreach, the bank has embarked on key initiatives under ABC Point of Sale (POS) Banking Through the use of ICT, we are broadening the concept of branchless banking through the POS where we expec
Slide 22: Agent Banking
New Business Agent Banking We have a project team in place who are in the process of implementing the model. We have experience in this model through the business partnership with the Co-operatives and SACCO’s.
Slide 23: Cost Rationalisation
Cost Rationalisation The bank optimized over 300 positions and thus was able to open additional branches with the same staff compliment. All cost lines continue to be monitored to eliminate waste and avoid budget overruns. Over 50% of the new branches are already contributing to the bottom lin
Slide 24: Human Resources
Human Resources Perhaps 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
Slide 25: Core Banking Software
Core Banking Software The Bank has been on a Bank Master / Branch Power core banking system from Misys that has given us a key competitive edge with a capacity to hold over 7 million customers. The Bank is at an advanced stage of upgrading its core banking software aimed at positioning the Bank
Slide 26: Regional Expansion
Regional Expansion The Co-operative Bank of Southern Sudan is expected to be operational by the end of this year with ownership as hereunder: 70% owned by Co-operative Bank of Kenya; and 30% by Government of South Sudan, on behalf of South Sudan’s Co-operative movement. Currently negotiating strat
Slide 27: Share Performance
Share Performance ith a price of kshs16per share and annualised PBT of kshs2.91billion this presents an annualised P/E of 12 ith an industry average P/E of 15 the projected price of the share will be kshs.20 o-op Bank is thus a growth stock
Slide 28: Conclusion
Conclusion Your bank has sustained the tremendous growth momentum over the years Given the various initiatives in place we project to do even better in the second half of year 2010.
Slide 29: Appreciation
Appreciation We sincerely thank you and all our stakeholders for the continued support over the years that has seen the success of the Kingdom Bank. We continue to heavily invest in the Kenyan People and are confident of brighter days ahead.
Slide 30: Thank you
Thank you and may God richly bless you all.
Co-operative Bank of Kenya — H1 2010 Earnings Presentation on 6ix