For Online E-newspaper
The East African : May 3rd 2015
The EastAfrican 38 RESULTS: REORGANISATION AND GROWTH Co-op Bank in major shift to ATMs, mobiles, Internet and agency banking The move will f≥ee most of the bank’s sta≠ f≥om ≥outine ove≥-the-counte≥ t≥ansactions to handling individual custome≥s By JAMES ANYANZWA The EastAfrican K enya’s Co-operative Bank Group plans to offer more products to its account holders to boost margins, having reported a 30 per cent rise in its first-quarter profit. The bank will shift its routine customer transactions such as deposits and withdrawals from bank branches to alternative channels such as automated teller machines, mobile phones, Internet and agency (“Co-op kwa jirani”) banking. The move is expected to free most of the bank staff from overthe-counter transactions to handle individual customers. “We want our staff to under- stand our customers better. We have been having these close relationship-based engagements with our corporate clients but now we want to elevate it to our individual customers,” managing director and chief executive Dr Gideon Muriuki told The EastAfrican. The dedicated products and services are expected to help retain existing clients and attract new ones. This is part of a wider reorgani- sation aimed at improving efficiency, managing costs and opening a new phase of growth for the lender, which is set to expand to Uganda, Tanzania, Rwanda and Ethiopia in the next five years. The bank reckons that about 73 per cent (four million customers) of the existing account holders operate only a single account, a state it wants to change. “We need to offer three or four products to each of the existing customers,” said Mr Muriuki. The initial phase of the trans- formation being executed by McKinsey&Company has seen off 160 employees from the management cadre — a decision expected to yield a one-off staff saving of $12.76 million and annual staff savings of $5.32 million. The bank, Kenya’s sixth largest by market capitalisation ($1.11 billion), recorded a 30 per cent rise in profits to $47.87 million in the first three months of this year, from $37 million in the same period last year. The growth was attributed to in- creased revenues from the bank’s diversified investment portfolio, which includes stock brokerage, consultancy, insurance, and mortgage and fund management. Also contributing to profitability is the increased volume of transaction-based income. The rise in profit before tax from $37 million to $47.87 million pushed Co-op’s stock at the Nairobi Securities Exchange upby 1.25 per cent to $0.22 per share from $0.21 per share last week. During the period under re- view, the group’s net interest income grew 21 per cent to $62.23 million from $51.27 million while non-funded income rose eight per cent to $30.53 million from $28.29 million. Total operating income in- creased 17 per cent to $92.76 million from $79.57 million while operating expenses grew three per cent to $45.74 million from $44.25 million. Net loans and advances grew 19 per cent to $1.96 billion from $1.65 billion while deposits went up 24 per cent to $2.53 billion from $2.04 billion. Meanwhile, Equity Bank’s stock remained at $0.52 even as information about the bank’s growth in profitability filtered through the market Diversification strategy The group’s first quarter (Janu- ary-March) pre-tax profits increased by 13 per cent to $64.89 million, up from $57.44 million in the first quarter last year, largely attributed to the group’s diversification strategy. “The group sustained invest- ments in mobile and agency banking, payment systems and money transfer as well as diaspora remittances,” said James Mwangi, the group’s chief executive and managing director. “We are highly optimistic that the growth momentum will be maintained throughout the year, with a number of new products Co-operative Bank customers stand to benefit as it moves to improve efficiency and cut costs. Picture: File OPERATIONAL CHANGES Co-operative Bank Group — Kenya’s third largest bank by asset base ($3.28 billion) but sixth largest by market capitalisation ($1.11 billion) — is aiming at improving efficiency and managing costs as it looks at expanding to Uganda, Tanzania, Rwanda and Ethiopia in the next five years. The bank wants to shift the bulk of its routine customer transactions to ATMs and mobile and services set to be launched in the coming months.” The group’s total operating 73pc According to Co-operative Bank CEO Gideon Muriuki, 73 per cent of the bank’s account holders operate only a single account income grew by 19 per cent to $140.42 million, up from $118.08 million, expenses grew by 24 per cent to $75.53 million on the back of investments made in an expanding the information technology infrastructure in 2014 Customer deposits went up by 35 per cent to $2.95 billion from $2.19 billion, while net loans recorded a 25 per cent growth to $2.39 billion from $1.9 billion. phones, Internet and agency banking. Its staff will then be able to attend to more individual customers as the bank tries to not only retain the existing customer base but also attract more. In other changes, the bank has seen 160 employees exit its management cadre — a decision expected to yield a one-off saving of $12.76 million and annual staff savings of $5.32 million. Helios EB Investors LP has also completed the sale of a 12.22 per cent stake in Equity Group Holdings Ltd, representing half of its stake, to Norfund and Norfund AS (a joint venture investment company between Norfund and Norwegian private investors) Equity Group, which cross-listed on the Rwanda Stock Exchange in February, aims to become a panAfrican bank with a presence in over 15 countries across Africa leveraging on the use of technology to enhance non-interest income. BUSINESS MAY 2-8,2015 MANAG E R Wanting gende≥ balance in business schools By AVIVAH WITTENBERG COX and LESLEY SYMONS Harvard Business School Publishing YOU WOULD expect organisations that teach the latest in leadership theory to practise what they preach. But business schools, which serve as talent pools for companies that are working on their own gender-balance issues, seem stuck in yesterday’s statistics. Women make up 60 per cent of university graduates, but that number falls precipitously at business schools. Female faculty are in even shorter supply. Produced by consulting firm 20- first, the 2015 Global Gender Balance Scorecard gives an overview of how the top 100 business schools, as ranked by The Financial Times, measure up on this issue. The report also takes an in-depth look at the FT’s top 12 business schools and tracks how they have evolved since 2010. The scorecard focuses on the gender balance achieved at two levels — among MBA students and among faculty. Here are the report’s key findings: —Better MBA balance: Most of the top 100 business schools have shown some improvement in the gender balance of their MBA student bodies since 2010. —Static faculty balance: Gender balance on the faculty side, however, seems more challenging. —Most balanced: The top-performing schools — those whose female students amount to over 40 per cent of the total student population and whose female faculty members add up to over 30 per cent of the total faculty population — include the University of Hong Kong and Fudan University. Two have a female dean. None of these schools are ranked in the top 12 by the Financial Times. —Some of the FT’s top-ranked schools are the most gender-balanced in terms of MBAs: Four of the FT’s top 12 schools have student female participation rates of 40 per cent or above (Harvard, Stanford, the University of California, Berkeley and the University of Pennsylvania’s Wharton School) but the least balanced in terms of faculty (Only one school in the FT’s top 12 has a female faculty population above 30 per cent — IE Business School — and fully one-third of these schools have female populations below 20 per cent (NSEAD, Colombia Business School, CEIBS and the Booth School of Business at the University of Chicago). Over the past decade, significant efforts have been made to improve the gender balance within the world’s best MBA programmes. But those efforts haven’t always been successful. Business schools that have man- aged to improve the gender ratios among their faculties have discovered that their progress is limited to certain disciplines within the school.
Apr 27th 2015
May 10th 2015