The group’s operating expenses (excluding provisions) scaled by 11.3 percent y-o-y to 33.6 billion shillings driven by a 19.3 percent y-o-y increase in other expenses to 14.5 billion shillings and an 11.0 percent y-o-y rise in staff costs to 14.8 billion shillings.
Non-funded income improved by 32.7 percent y-o-y to 25.7 billion shillings largely driven by a 28.0 percent y-o-y growth in other fees and commissions to 12.6 billion shillings.
Forex trading income surged by 65.6 percent y-o-y to 4.7 billion shillings while fees and commissions on loans and advances grew by 38.7 percent y-o-y to 7.5 billion shillings.
CO-OP Group released its FY22 results reporting a 33.2 percent y-o-y growth in after-tax profits to 22.0 billion shillings.
The rise in profitability was mainly underpinned by a 32.7 percent y-o-y rise in non-funded income to 25.7 billion shillings and a 10.9 percent y-o-y growth in net interest income to 45.5 billion shillings.
EPS for the period inched higher by 30.5 percent y-o-y to 3.72 shillings (FY21: 2.85 shillings). The board announced a first and final dividend of 1.50 shillings per share (FY21: 1.00 shillings).
If approved, the dividend will be paid on or about 9th June 2023 to shareholders registered on the group’s register at the close of business on 24th May 2023.
Net interest income rose by 10.9 percent y-o-y to 45.5 billion shillings, buoyed by an 11.0 percent y-o-y growth in total interest income to 61.7 billion shillings as total interest expenses rose by 11.0 percent y-o-y to 16.2 billion shillings.
Non-funded income improved by 32.7 percent y-o-y to 25.7 billion shillings largely driven by a 28.0 percent y-o-y growth in other fees and commissions to 12.6 billion shillings.
Forex trading income surged by 65.6 percent y-o-y to 4.7 billion shillings while fees and commissions on loans and advances grew by 38.7 percent y-o-y to 7.5 billion shillings.
The contribution of non-funded income to total operating income inched higher by 401 bps y-o-y to 36.1 percent (FY21: 32.1 percent).
The group’s operating expenses (excluding provisions) scaled by 11.3 percent y-o-y to 33.6 billion shillings driven by a 19.3 percent y-o-y increase in other expenses to 14.5 billion shillings and an 11.0 percent y-o-y rise in staff costs to 14.8 billion shillings.
Owing to a faster rise in total operating income (+17.9 percent y-o-y to 71.3 billion shillings) vis-à-vis the growth registered in operating expenses (sans provisions), the group’s cost-to-income ratio came down by 280 bps y-o-y to 47.1 percent (FY21: 49.9 percent).
Loan loss provisions went up by 9.4 percent y-o-y to 8.7 billion shillings while the group’s gross non-performing loans rose by 5.2 percent y-o-y to 52.3 billion shillings (+1.0 percent q-o-q). The group’s estimated NPL ratio, however, eased by 46 bps y-o-y to 13.4 percent.
Net loans and advances to customers rose by 9.4 percent y-o-y to 339.4 billion shillings (+1.3 percent q-o-q). Government and investment securities eased by 5.7 percent y-o-y to 175.2 billion shillings (-4.9 percent q-o-q).
On the funding side, customer deposits increased by 3.9 percent y-o-y to 423.8 billion shillings (-1.9 percent q-o-q) while borrowed funds increased by 12.1 percent y-o-y to 48.1 billion shillings (+14.7 percent q-o-q).
Co-op Group is currently trading at a P/E multiple of 3.2x against an industry median of 3.6x and a P/B multiple of 0.7x commensurate with the industry median of 0.7x. Its ROE stands at 20.5% while its ROA stands at 3.6 percent.
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