Breaking All The Numbers In Co-op Bank’s Q1 Financial Results

CO-OP Group released its 1Q23 results reporting a 4.7 percent y-o-y growth in after-tax profits to 6.1 billion shillings.

The rise in profitability was mainly underpinned by a 10.8 percent y-o-y rise in non-funded income to 7.1 billion shillings and a 3.9 percent y-o-y growth in net interest income to 10.8 billion shillings. EPS for the period went up by 4.7 percent y-o-y to 1.04 (1Q22: 0.99 shillings).

Net interest income rose by 3.9 percent y-o-y to 10.8 billion shillings lifted by an 11.2 percent y-o-y growth in total interest income to 15.6 billion shillings against a 32.2 percent y-o-y rise in total interest expenses to 4.8 billion shillings.

Non-funded income improved by 10.8 percent y-o-y to 7.1 billion shillings largely driven by a 43.9 percent y-o-y jump in forex trading income to 1.1 billion shillings and a 30.9% y-o-y rise in fees and commissions on loans and advances to 3.4 billion shillings.

Other fees and commissions declined by 10.1 percent y-o-y to 2.5 billion shillings while other income dwindled by 60.6 percent y-o-y to KES 107.6 MN.

Total operating income rose by 6.5% y-o-y to KES 17.9 BN. The contribution of non-funded income to total operating income inched higher by 153 bps y-o-y to 39.7% (1Q22: 38.2%).

The group’s operating expenses (minus provisions) climbed by 10.7% y-o-y to KES 8.3 BN mainly on the back of a 12.8% y-o-y rise in staff costs to KES 4.0 BN and an 11.5% y-o-y increase in other expenses to KES 3.2 BN. The group’s cost-to-income ratio increased by 177 bps y-o-y to 46.3%.

Loan loss provisions eased marginally by 0.7% y-o-y to KES 1.5 BN even as gross non-performing loans for the group advanced by 12.6% y-o-y to KES 55.7 BN (+6.4% q-o-q). Consequently, the group’s estimated NPL ratio eased by 17 bps y-o-y to 13.4%.

Net loans and advances to customers rose by 11.0% y-o-y to KES 360.1 BN (+6.1% q-o-q). Government and investment securities declined by 2.2% y-o-y to KES 181.0 BN (+3.4% q-o-q). On the funding side, customer deposits increased by 2.2% y-o-y to KES 419.8 BN (-1.0% q-o-q) while borrowed funds inclined by 11.8% y-o-y to KES 48.4 BN (+0.6% q-o-q).

On a trailing basis, Co-op Group is currently trading at a P/E multiple of 3.2x against an industry median of 3.9x and a P/B multiple of 0.6x commensurate with the industry median of 0.7x. Its ROE stands at 19.8% while its ROA stands at 3.5%.

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