Co-operative Bank Of Kenya Ltd. · NSEKE:COOP
Co-operative Bank Of Kenya — Q3 2024 Earnings Presentation
45 slides from Co-operative Bank Of Kenya's earnings presentation, November 2024
Slide 1: Investor Briefing Q3 2024
Ge) CO-OPERATIVE BANK Investor Briefing Q3 2024
Slide 2: A Transformational Bank
Group Financial Results Q3 2024 A Transformational Bank Largest Co-operative Bank in Africa - 15 Million Members Successful Universal Banking Model, Increased Dominance in Kenya Growth, Resilience and Agility Kshs. 750.8 Billion in Total Assets 5,617 Skilled, Motivated Staff Members 2
Slide 3: We are Growing
We are Growing Creating Value 3
Slide 4: Efficient, Profitable Business Model Growing Asset Base
Group Financial Results Q3 2024 Efficient, Profitable Business Model 26.8 Profit Before Tax (Kshs. B) 24.7 Q3 2023 Q3 2024 Growing Asset Base 750.8 Total Assets (Kshs. B) 661.3 Q3 2023 Q3 2024 4
Slide 5: Group Structure
Group Financial Group Structure Results Q3 2024 Co-operative Bank of South Sudan Ltd (51%) Co-op Bancassurance Intermediary Ltd (100%) 15M Member Co-operative Movement Co-optrust Investment Services Ltd (100%) Co-op Holdings Co-op Society Ltd (64.56% Strategic Ownership) Kingdom Securities Ltd (60%)
Slide 6: A Successful Universal Banking Model
Group Financial Results Q3 2024 A Successful Universal Banking Model Retail and Business Banking Corporate & Institutional Banking (Kshs.260.2 Billion Loan Book) (Kshs. 113.4 Billion Loan Book) Leasing: Co-operatives Banking Coop Bank Fleet Africa Ltd (Kshs. 36.6 Billion Loan Book) (Kshs.123.6 Mn PB
Slide 7: Our Presence
Group Financial Results Q3 2024 Our Presence 16000+ 205 Branches Co-op Kwa Jirani 24hr Contact Centre Agents 690 Sacco Front 603 ATMs & Cash 16K Diaspora Banking offices Branch Deposit Machines Customers Network (CDMs) New Core Banking 5,617 Staff System 7
Slide 8: Resilience in our Regional Business: Co-operative Bank of South Sudan
Group Financial Results Q3 2024 Resilience in our Regional Business : Co-operative Bank of South Sudan Q3 2023 Q3 2024 Kshs. Millions 8,684 8,018 6,703 5,647 3,392 3,447 Total Assets Total Deposits Loans And Advances Q3 2023 Q3 2024 Kshs. Millions 1,310 1,276 1,019 975 5 Branches 5 Non-oil collectio
Slide 9: We are Resilient
We are Resilient Protecting Value 9
Slide 10: Robust Financial and Operational Foundations Driving Stability
Group Financial Results Q3 2024 Robust Financial and Operational Foundations Driving Stability Proactive Enterprise Risk Management Strong Capital Buffers: Total Capital to Risk Weighted Framework. Assets (RWA) 21.6% (Regulatory 14.5%) Up to 51% of our loan Book is in Consumer Continuous support to
Slide 11: We are agile
We are agile Fast | Adaptable 11
Slide 12: Leveraging Digital Transformation and Agile Methodologies
Group Financial Results Q3 2024 Leveraging Digital Transformation and Agile Methodologies 93% of transactions on alternative channels enhancing operational efficiency. New core banking system operational in Kenya (June 2023) & South Sudan (March 2024) enhancing innovation, customer experience & anal
Slide 13: Increased Access to Finance with E-Credit
Group Financial Results Q3 2024 Increased Access to Finance with E-Credit Cumulative Mcoop Cash Loan Customer Numbers ( In '000’) Kshs. 55.7 Bn Disbursed YTD 12,195 10,727 8,774 Kshs. 407.9 Disbursed since inception. 6,577 4,641 % CONTRIBUTION TO YTD DISBURSEMENTS 2,924 1,389 388 694 28 183 20% FY 2
Slide 14: Growing Co-op Kwa Jirani Agency Banking
Group Financial Results Q3 2024 Growing Co-op Kwa Jirani Agency Banking Total No. of Transactions Deposits Generated by Agents Transaction Value distribution (%) (Millions) (Ksh.Bn) Q3 2023 Q3 2024 22.7 115 116.3 21.9 66.2% 27.3% 63.2% 29.5% 6.5% 7.3% Q3 2023 Q3 2024 Q3 2023 Q3 2024 Deposits Withdra
Slide 15: Operating Environment
Group Financial Results Q3 2024 Operating Environment Economic Highlights 15
Slide 16: Global growth is stable with divergence at the regional level
Global growth is stable with divergence at the regional level Real GDP growth (Annual percent change) Tailwinds o Stability in global economic activities supported by strong growth in the United States & Asia (China & India), o Global trade is expected to continue to grow in line with GDP, reaching
Slide 17: Monetary Policy Evolution & the Path Ahead
Group Financial Results Q3 2024 Domestic borrowing costs have started to improve following Policy shift to support asset quality efforts, reduce policy pivot from the CBK. funding pressure, portfolio flows & increase demand for credit in 2025 MONETARY POLICY EVOLUTION & THE PATH AHEAD Private Sector
Slide 18: Demand for goods & services to improve as interest & inflation fall
Group Financial Results Q3 2024 Demand for goods & services, investment & production to GOK fiscal constraints are easing over the medium- improve as interest & inflation rates fall term Second Quarter GDP Growth Rates, 2016-2024 Government Fiscal Projections Vision 2030 Growth Target Public debt to
Slide 19: Corporate Strategic Plan 2020 – 2024
2020 – 2024 Corporate Strategic Plan 19
Slide 20: Purpose, Vision, Mission
Group Financial Results Q3 2024 PURPOSE VISION MISSION A financial institution predominantly owned by To be the dominant bank in Kenya and the To offer a wide range of innovative financial solutions leveraging the Kenyan Co-operative movement, region, riding on the unique Co-operative Model on our h
Slide 21: "Soaring Eagle" Transformation
Group Financial Results “Soaring Eagle” Transformation Q3 2024 Progressive gains for our efficiency and growth. 1. Branch Transformation 2. MSME Transformation 3. Sales Force Effectiveness 4. Shared Services & Digitization “The Digital Bank” 5. NPL Management & Credit Processes 6. Cost Management 7.
Slide 22: Branch Transformation and MSME Transformation
Group Financial Results Q3 2024 Branch Transformation MSME Transformation 93% of total transactions are on Alternative 64,100 Customers trained Channels. 231,200 customers onboarded MSME E-Credit Gold, Silver & Bronze • A key focus area, Kshs. 407.9B disbursed to Date. NFS • Kshs. 6.2 Billion disbur
Slide 23: NPL Management & Credit Processes, Cost Management
Group Financial Results Q3 2024 NPL Management & Credit Processes Cost Management Continuous Process improvement for enhanced End to End Turn Efficiency gains Around Time on all loan applications. 62.6% Proactive early delinquency & NPL management through 55.2% Connecting with our customers, collect
Slide 24: Corporate Strategic Plan 2025-2029
CORPORATE STRATEGIC PLAN 2025-2029 The Board of Directors has approved a new Corporate Strategic Plan that will guide the Group’s activities for the next 5 years. This Plan ushers in a period of growth that will see the Bank’s asset size grow to over Kshs.1 Trillion. The key objectives are: 1. Enhan
Slide 25: Environmental Social and Governance (ESG)
Environmental Social and Governance (ESG) 25
Slide 26: Impact driven by our dedicated ESG Focus
Group Financial Results Q3 2024 Impact driven by our dedicated ESG Focus with an enhanced ESG Policy Framework Affordable Basic MSME Financing Renewable Energy 12.3 Billion Infrastructure Access to Essential Green Buildings Food Security Services Employment Generation Youth Banking Women Banking 10,
Slide 27: Sustainability Awards
Sustainability Awards Most Sustainable Bank in Kenya Most Innovative Bank Best in financing Commercial Clients Best in Promoting Gender Inclusivity Best In promoting People with Disability (PWD) 1ST Runners up – Best in Financing MSMEs 2ND Runners Up – Best in Sustainable Finance 27
Slide 28: Award-Winning Brand
Group Financial Results Award-Winning Brand Q3 2024 Best Women and Youth empowerment Programs. KBA CUSTOMER SATISFACTION SURVEY 2022 & 2023 • Education Scholarship Program • Adoption of Agribusiness and use of Best Overall in Satisfactory Customer Experience. Renewable Energy Technologies for 33000
Slide 29: Group Financial Performance
Group Financial Results Q3 2024 Group Financial Performance 29
Slide 30: Strong Financial Position (Kshs. Billions)
Group Financial Group Financial Results Results Q3 2024 Q3 2024 Total Assets Net Loan book 750.8 381.3 661.3 378.1 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Strong Financial Position (Kshs. Billions) Total Deposits Shareholder's Funds 524.5 131.8 108.1 450.5 H12023 H12024 H12023 H12024 30
Slide 31: Strong Financial Position (Kshs. Billions)
Group Financial Results Q3 2024 Strong Financial Position (Kshs. Billions) Kshs. Billions Q32024 Q32023 % Growth Total Assets 750.8 661.3 13.5% Net Loan book 381.3 378.1 0.9% Government Securities 211.6 185.1 14.3% Total Deposits 524.5 450.5 16.4% Borrowed Funds 58.0 65.6 -11.6% Shareholder's Funds
Slide 32: Diversified loan book
Group Financial Group Financial Results Results Q3 2024 Q3 2024 Loan Book By Segment Diversified loan book Q32023 Q32024 47.6% 47.5% • Diversified across segments. • Highest book is in Personal Banking; • Check off; deductions are done at source. 27.8% 27.6% • Diversified across various Government/q
Slide 33: Diversified loan book
Group Financial Group Financial Results Results Q3 2024 Q3 2024 Loan Book by Sector Tourism, Restraurant & Hotels 0.5% Diversified loan book 0.6% 0.9% Building & construction 1.0% Agriculture 1.5% • Diversified across sectors 1.5% Energy & Water 1.9% 1.6% • 51% in Personal consumer which is 3.0% per
Slide 34: Portfolio Trends: Sector NPL
Group Financial Results Q3 2024 Q32024 Q32023 Sector Size Energy & Water 3.5% 4.6% 1.9% Financial services 4.0% 10.0% Portfolio Trends: Sector 6.5% NPL Personal consumer 7.0% 6.6% 51.0% Transport & Communication 27.4% 9.2% 13.9% Low relative exposure 15.8% Manufacturing 3.0% in high-risk sectors 18.
Slide 35: Supporting NPL Management
Group Financial Group Financial Results Results Q3 2024 Q3 2024 NPL Ratio Q32023 Q32024 16.7% 16.4% 16.0% Supporting NPL Management; 15.0% 14.9% • Proactive Credit Management 14.0% Strategies. • Business Growth. • Consumers and Businesses resilience amid tight economic environment. Industry Group Ba
Slide 36: Cost of risk of 2% in Q3 2024
Group Financial Results Q3 2024 Cost of risk of 2% in Q3 2024. Cost of Risk IFRS Coverage Coverage with security 2.0% 108.1% 68.6% 66.5% 101.1% 1.6% Q32023 Q32024 Q32023 Q32024 Q32023 Q32024 36
Slide 37: Well-diversified Liability Portfolio
Group Financial Results Q3 2024 Well-diversified Liability Portfolio Q32024 Q32023 CASA VS TERM DEPOSITS 6.2% Sacco and Agri-Business 7.0% 9.9% Corporate banking 11.9% 13.1% 44% Government Banking 10.7% 56% 19.5% Institutional Banking 14.6% 24.4% MSME 27.4% 26.9% Retail 28.4% Current & Savings Depos
Slide 38: Optimally balanced Kenya Shilling Asset & Funding book
Group Financial Results Optimally balanced Kenya Shilling Asset & Funding book Q3 2024 FUNDING: ASSETS: LOCAL VS. FOREIGN CURRENCY LOCAL VS. FOREIGN CURRENCY LCY Deposits FCY Deposits Local Currency Foreign Curency LCY Borrowing FCY Borrowing 0.6% 14.9% 7.0% 9.8% 82.7% 85.1% 38
Slide 39: Asset and Funding Mix
Group Financial Results Q3 2024 Asset and Funding Mix Q32024 Q32023 8.7% Net Loans 6.3% 8.5% Net Loans 12.3% Government Government Asset Categories Securities Securities 50.8% Cash and Cash 28.0% 57.2% Cash and Cash 28.2% Equivalent Equivalent Other Assets Other Assets Q32024 4.8% Q32023 5.6% Deposi
Slide 40: Strong Liquidity to Support Investments
Group Financial Results Q3 2024 Strong Liquidity to Support Investments Liquidity ratio Total Loans to Total Deposits Loans /(Deposits+Borrowed 57.8% Funds) 83.9% 73.2% 52.1% 72.7% 65.5% Q3 2023 Q3 2024 Q3 2023 Q3 2024 Q3 2023 Q3 2024 40
Slide 41: Capital buffers for sustainable growth
Group Financial Results Q3 2024 Capital buffers for sustainable growth Core capital to Total Deposits Core capital to Total risk Total capital to Total risk 23.1% 22.8% weighted assets weighted assets 17.9% 18.5% 22.1% 21.6% 14.5% 14.5% 10.5% 10.5% 8.0% 8.0% Q3 2023 Q3 2024 Q3 2023 Q3 2024 Q3 2023 Q
Slide 42: Sustainable Profitability
Group Financial Results Q3 2024 Sustainable Profitability Kshs. Billions Q32024 Q32023 YoY Change Total Interest Income 61.77 49.35 25.2% Total Interest Expenses 24.89 16.53 50.6% Net Interest Income 36.87 32.82 12.3% Fees and commissions on loans and advances 9.08 9.09 (0.1%) Other Fees and commiss
Slide 43: Subsidiary Contribution
Group Financial Results Q3 2024 Subsidiary Contribution Q3 2024 Q3 2023 Growth Growth KShs '000' KShs '000' KShs '000' % Co-operative Bank of Kenya Ltd 24,475,227 22,735,316 1,739,911 7.7% Co-operative Bank of South Sudan 33,796 43,448 -9,652 (22.2%) Co-opTrust Investment Services Ltd 254,898 154,50
Slide 44: Key Ratios
Group Group Financial Financial Results Results Q3 Q3 2024 2024 Ratio Q3 2024 Q3 2023 RoAA 3.6% 3.8% RoAE 21.3% 23.5% EPS 4.36 4.18 Ave Return of Interest Earning Assets 13.4% 11.9% NIM on Loans 8.2% 7.5% NIM on Interest Earning Assets 7.7% 7.5% Key Ratios CIR Group (with provisions) 55.
Slide 45: Thank You
THANK YOU [SE] CO-OPERATIVE BANK
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