Co-operative Bank Managing Director Dr. Gideon Muriuki

Kenya's Coop bank builds on peace gains in South Sudan

By James Wafula in Nairobi

Kenya's Co-operative Bank started 2020 on a sound note re-asserting its trans-formational gains that saw it record Sh10.9bn profit in South Sudan. Sources at the Nairobi based bank revealed that the lender was counting on sustained peace in Juba following peace deals between President Salvar Kiir and his rival Rek Mashal.
The two political rivals sealed peace and unity government for a lasting power sharing deal that will guarantee peace and end to on and off conflicts. The fast expanding Coop bank has intensified operations as steadily growing savings by Saccos in Juba out-did competition from local lenders.
Bank group Managing Director Dr. Gideon Muriuki revealed that over 56,800 customers have taken up the rolled out MSME packages as savings and 4000 have been trained on business management and planning. The lender's gross profit for the period under review was Sh15.5 billion compared to Sh14.6 billion same period last year. Assets grew by Sh36.6 billion to Sh440.8 billion compared to Sh404.2 billion in the same period last year Cooperative Bank's South Sudan subsidiary rose from ruins of post currency devaluation regime to post a profit of Sh174.7 million, even as the group reported Sh10.9 billion net profit.
This is the first time the subsidiary's performance is having a positive impact on the group's results since war in the country caused currency devaluation in 2016 and it is expected that with renewed peace in Juba the bank performance will be on an upward swing. The subsidiary, which is a Joint Venture between Cooperative Group and South Sudanese government on 51:49 ratio made the first profit last year. Co-op Bank began operations in the war torn country in September 2013 braving operational odds ranging from on and off fighting and resulting political instability.
Dr. Muriuki told Workers Eye in an interview that the lender's growth is the result of its business strategy dubbed “Soaring Eagle” that taps into over 15 million-member co-operative movement in Kenya and diaspora accounts, ''Retail banking services through Sacco FOSAs enabled us provide wholesale financial services to over 464 FOSA outlets, and issue over 1 million Sacco-Link cards,'' Muriuki said.
''We have earmarked Sh15.2 billion for MSME lending and to date we have disbursed Sh5.4 billion under the program,'' Muriuki said. The net profit for the nine months ended September 30 was Shs 700 million more compared to Sh10.3 billion reported similar period last year. The lender's gross profit for the period under review was Sh15.5 billion compared to Sh14.6 billion same period last year.
The lender's operating income grew by nine per cent from Sh32.3 billion to Sh35.2 billion. Total non-interest income increased by 33 per cent from Sh10.6 billion to Sh14.1 billion. Interest income from government securities increased by 18 per cent from Sh6.9 billion to Sh8.2 billion while its operating expenses grew by 11 per on account of higher loan loss provision.
Assets grew by Sh36.6 billion to Sh440.8 billion compared to Sh404.2 billion in the same period last year. Net loans and advances book grew by Sh14.7 billion (6 per cent) from Sh254.2 to Sh268.9 billion. Investment in Government securities grew by Sh11.4 billion (13.7 per cent) to Sh94.6 billion compared to Sh83.2 billion in first three quarters of 2018. The bank closed the quarter on a sound capital base, with adjusted total capital against total risk-weighted assets standing at 15.8 per cent, which is 1.3 per cent above the statutory minimum of 14.5 per cent■