#1Co-operative Bank of Kenya Ltd Group Financial Results | FY2021 1 We are You 1#22 Key Highlights We are Growing | We are Resilient | We are Agile 2#3A Transformational Bank Largest Co-operative Bank in Africa 15 Million Members 9.0 Million Direct Account Holders Successful Universal Banking Model, Increased Dominance in Kenya Growth, Resilience and Agility in a pandemic environment Kshs.580 Billion in Total Assets 4505 Skilled, Motivated Staff Members GO BANK 3#4We are Growing: Creating Value Continued focus on optimizing opportunities to grow; Asset, liability & Non funded income through an innovative array of financial solutions. · GO BANK Investment in E-credit Strong penetration; disbursement of Kshs. 6 Billion per month • Good yield of 8% flat. Total Assets 8.0% Loan Book 8.0% Customer Deposits 8.0% • Short term tenor of maximum 90 days. . Consumer based that is on salary Government securities 14% Shareholders funds 10% Net interest income 13% checkoff deductions at source. Total Operating Income 12% Non-Interest income 11% . Low credit risk 4#5We are Resilient: Protecting Value GO BANK Profitable Bank Kshs. 22.6 Billion Strong Capital Buffers Proactive Enterprise Risk Management Framework. Proactive provisioning for NPL: Kshs. 7.9B in FY2021 (-2.2% YoY). NPL Coverage now at 69% from 52% (FY2020) Continuous support to our customers, staff and all our other 88 stakeholders. Up to Kshs.49 Billion loan book was restructured by March 2021. Low relative exposure in high-risk sectors like Tourism (1%) and Manufacturing (3%). Up to 50% of our loan Book is in Consumer banking which is performing well. Optimal risk spread with a 14% growth on T-bills and T-bonds. Proactive Regulatory compliance including measures put in place to mitigate the adverse economic impact due to the ongoing pandemic Continued gains from our institutionalized Transformation seeking efficiency and growth. Key ongoing transformation initiatives aimed at a quality loan book are; Credit Review Implementation Project "Project Kilele" with McKinsey &Co. Decentralization of loan portfolio management enabling Project 3C (Connect, Collect and Cure). • Project Connect & Build (CB) - focused on co- creating solutions with our customers to grow the loan book and increase product holding. 5#6We are Agile Fast | Adaptable Operational efficiency with 94% of our transactions in alternative channels. We have been able to offer uninterrupted services on these channels. Enhanced digitization of internal bank processes and engagement platforms, to ensure contactless capabilities for both customers and staff. New Core Banking Platform implementation on track. Expected Key benefits include enhanced; ● ● Business agility & Innovation. Customer experience • Cost management Analytics Process automation & Digitization Staff Productivity ● Supporting new ways of working - Digital Workforce ● +33% Pre-provision return per staff. GO BANK 6#7Macroeconomic Highlights Gross Domestic Product Short Term Interest Rates Exchange Rate Inflation Rate 7#8KENYA'S 2022 GDP GROWTH RATE FORECAST BANK GO 調 Several institutions have published diverse GDP growth rate forecast for Kenya in 2022. Institution World Central Bank of Bank Kenya International Monetary Fund Date of Publication Jan-22 Jan-22 GDP Growth Rate 4.7% 5.9% 6.0% Nov-21 This illustrates high level of uncertainty still lingering in the economy including the following; ■ The health path of COVID-19 pandemic. It is yet to get to an endemic state. August 2022 general elections. Historically not all sectors of the economy have remained resilient to election cycles. Global markets uncertainty following the Russia-Ukraine conflict and the likely transmission channels for the impact. CBK has provided sector level details of its GDP growth forecast(see next page) 8#9CBK'S GDP GROWTH RATE (%) FORECAST FOR KENYA IN 2022 GO 調 BANK SECTOR 2021 2022 Agriculture Industry -0.9 6.3 6.5 5.0 Mining and Quarrying 16.9 6.3 Manufacturing 6.2 4.0 Electricity and Water Supply 4.2 5.7 Construction 6.2 6.0 Services 10.8 6.4 Wholesale and Retail Trade, Repairs 7.8 6.8 Accommodation and Restaurants -7.6 17.0 11 Transport & storage 8.0 8.0 Information & Comm 15.0 5.8 Financial and Insurance 8.2 5.5 Public Administration 8.4 5.0 Professional, Admin & support services 6.1 5.8 Real Estate 5.0 5.6 Education 41.5 5.2 Health Other Services Real GDP Growth 9.1 5.1 7.3 5.7 8.0 5.9 9#10GO 調 BANK INTEREST RATES MARKET 10 60 9 Percentage 8 00 7 ம் ம் 5 4 3 2 SHORT TERM INTEREST RATES Dec-20 Jan-21 Feb-21 Mar-21 91-Day Tbill Apr-21 May-21 Jun-21 Jul-21 364-days Tbill Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 CBR (RHS) -Interbank Rate Feb-22 ■ The money market recorded marginal movements in the short-end between December 2020 and December 2021. The rates for 91-days, 182-days and 364-days paper were 7.3%, 8.1% and 9.8% at end of February 2022 from 6.9%, 7.4% and 8.3% in October 2021, respectively. Into March 2022, the Government has demonstrated continued high appetite for domestic borrowing thus, rates have gradually risen. Though the Government has front-loaded the FY 2021/22 domestic borrowing, the push to settle the huge level of pending bills (KES 468B as of Dec 2021) may lead to upward revision of the domestic borrowing target. The market rates in the 91-days and 182-days tenor will however remain in the single digit in Q1 2022, and probably only respond to movements in the repo market as CBK conducts open market operations. 10#11109 108 107 02/08/2021 06/08/2021 12/08/2021 18/08/2021 24/08/2021 KES KES 111 110 30/08/2021 3/9/2021 9/9/2021 15/09/2021 21/09/2021 EXCHANGE RATE MARKET USD/KES Exchange Rate 115 114 113 112 27/09/2021 1/10/2021 7/10/2021 14/10/2021 21/10/2021 27/10/2021 02/11/2021 08/11/2021 12/11/2021 18/11/2021 24/11/2021 30/11/2021 06/12/2021 10/12/2021 17/12/2021 23/12/2021 30/12/2021 05/01/2022 11/01/2022 17/01/2022 21/01/2022 27/01/2022 02/02/2022 08/02/2022 14/02/2022 18/02/2022 24/02/2022 02/03/2022 The KES continued to gradually weaken against the USD to trade at an official mean rate of 114 in early March. The market has recorded reduced inflows of US dollars as well as increased demand by importers following the steady rise in crude oil and other commodities. ■ For example, oil import bill rose 58% yoy to December 2021. Similarly, industrial supplies import bill was up 30% over the same period. Into Q2 2022, we expect further weakening due to continued demand by importers and limited significant increase in exports. 11 BANK GO 調#12160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0 2006M02 2006M07 2006M12 2007M05 2007M10 ހއ Percentage 12.0 INFLATION RATE 16.0 14.8 14.4 13.5 14.0 11.8 TREND IN INFLATION RATE 9.2 10.0 8.2 6.9 8.0 6.3 6.4 6.6 6.5 6.5 5.8 5.9 5.8 5.7 5.4 5.1 6.0 11.1 10.5 9.6 9.6 4.0 2.9 2.4 2.4 2.6 2.6 2.7 2.2 1.9 2.0 0.0 Apr-21 Jun-21 Aug-21 Oct-21 Dec-21 Feb-22 Food Inflation NENF Fuel Inflation Overall Inflation 2008M03 2008M08 2009M01 2009M06 2009M11 2010M04 2010M09 2011M02 2011M07 2011M12 2012M05 2012M10 2013M03 2013M08 Global Oil Prices, $/bbl ти 2014M01 2014M06 2014M11 2015M04 2015M09 2016M02 2016M07 2016M12 2017M05 2017M10 2018M03 2018M08 2019M01 2019M06 2019M11 2020M04 2020M09 2021M02 2021M07 2021M12 2.1 GO 調 BANK Domestic inflation rate has declined to 5.4% in January 2022 compared to 5.7% in January 2021 and December 2021. ■ This follows a fall in electricity costs by 6% - 9% in January 2022 compared to a year earlier and by 15% compared to December 2021. Into Q2 2022, the risk of rising commodities prices persists. However, Government is likely to provide some cushion to households by continuing with the fuel subsidy. ■ The March-April-May long-rains are forecast to be normal or above normal long-term average. However, current food stocks are low, given that the short rains were poor in both space and time. ■ The urban population is hardest hit given that the rural population produces part of its food. 12#13Strategic Focus 2020-2024 Strategic Themes 1. Aggressive deepening of our dominance in the Kenya Market 2. Dominant provider of financial services to to the Co-operative Movement in Kenya and the region. 3. Customer experience that is seamless across all our touch points. 4. Operating efficiency driven by digitization, innovative products & Processes, efficient business models, and staff productivity. 5. Optimal Enterprise Risk and Compliance in the dynamic environment 6. Positive impact on Economy, Society & Environment. Vision To be the dominant bank in Kenya and the region, riding on the unique Co-operative Model providing innovative financial solutions for distinctive customer experience. Mission To offer a wide range of innovative financial solutions leveraging on our heavy investment in multi-channels, national and regional presence and with a focus on excellent customer experience by a highly motivated and talented team. 13#14Group Structure Co-operative Bank of Kenya Group Coop Holdings Coop Society Ltd (64.56%) Minority Shareholder (35.44%) Co-operative Bank Of Kenya Ltd Co-operative Bank of South Sudan Ltd (51%) Co-op Consultancy and Bancassurance Intermediary Ltd (100%) Co-op Trust Investment Services Ltd (100%) Kingdom Securities Ltd (60%) Kingdom Bank Ltd (90%) Co-operative Insurance Society Ltd (33.41%) Co-op Bank Fleet Africa Leasing Limited (25%) GO BANK 14#15A Successful Universal Banking Model Retail and Business Banking (Kshs. 203.2 Billion Loan Book) Co-operatives Banking (Kshs. 27.5 Billion Loan Book) Et G Funds under management (Kshs. 189.2 Billion (FY2020 Kshs. 127.5 Billion) & M $ Consultancy and capacity building 3057 ☑ ☑ DOD Stock Brokerage Share trading services Online Share Trading C Corporate Government & Institutional Banking (Kshs. 103.6 Billion Loan Book) Leasing: Coop Bank Fleet Africa Ltd Insurance Brokerage 14% (YoY) growth in Insurance Commission 15#16A 178 Branches 19K Diaspora Banking Customers 561 ATMs : Our Presence 9.0M Account holders 5.3M Mcoopcash Customers 24hr Contact Centre 88K+ Internet banking Customers 464 Sacco Front Offices Branch network 26K+ Co-op Kwa Jirani Terminals Ga BANK 111 4505 Staff 16#17Sales Force Effectiveness Shared Services & Digitization 'The Digital Bank' Staff Productivity Key Pillars "Soaring Eagle" Transformation Initiatives Growth Efficiency Branch Transformation: Customer Experience & Retail SFE MSME Transformation NPL Management & Credit processes Cost Management Data Analytics GÐ BANK 17#18"Soaring Eagle" Transformation: Key achievements G GO BANK E-Credit Focus: Kshs.192.7B Disbursed so far 1.Short term tenor of maximum 90 days. 2.Good yield of 8% flat. 3.Average disbursement of Ksh.6.0B per month. 4.Consumer Based that is on salary checkoff deductions at source. 5.Low credit risk ✓ Average queue time of 8.6 Minutes. ✓ 94% transactions on alternative channels. Proactive credit management through; ✓ Continuous Process improvement for enhanced End to End Turn Around Time on all loan applications. ✓ Proactive early delinquency & NPL management through Connecting with our customers, collecting and offering customer centric solutions. ✓ Credit Review Implementation Project "Project Kilele", Project 3Cs (Connect, Collect, Cure), Project Connect & Build MSME Transformation: 1.19,963 trained customers. 2.144K+ on boarded on the new packages (Gold, Silver, Bronze). 3.Supply chain financing: 91 Anchors and 512 counter parties to date. 4. Non-Financial Services (NFS):231 NFS clinics, 13 Networking forums, 3 international business trips. 5. Government of Kenya Credit Guarantee Scheme. 6. To date Kshs. 42.5 Billion lending to MSMEs though e-credit. 18 111#19"Soaring Eagle" Transformation: Key achievements Sales Force Effectiveness for CIBD and Cooperatives; ✓ Sector focus; Tailor-made go to market strategies for different sectors. ✓ Scale up value chain business. ✓ Leasing- Partnership with coop fleet to offer assets on lease ; ✔ Akili Kali partnership; Fintech engagement challenge for digital co-operatives Digitization: Core Banking System (ongoing), Omnichannel, Business Process Management System, Master Card. ✓ Advanced data analytics - Supporting Data-led sales, reporting and decision making ✓ Staff productivity and enablement - Pre-provision productivity grew by 33% YoY 1111 19 GO BANK#20Credit Review Implementation Project "Project Kilele" GO BANK E2E assessment of credit risk management practices Strengthen portfolio assessment and risk frameworks Enhance Collections Comprehensive diagnostic review on each area of credit risk, including: ✔ Credit risk management framework with a key focus on risk governance, credit risk appetite, origination and underwriting process, credit approval process, credit scoring/rating models, and pricing ✓ Portfolio management, monitoring and reporting procedures ✓ Non-performing loan management, collections, and recovery processes ✓ Stress-testing of existing work done on portfolio analysis ✓ Assess client level (and sub-sector) strategies that have been developed and suggest improvements Quantify impacts of work done - Improvements on work done and potential heuristics that can be applied to enhance PD, LGC, and ECL modeling incorporating sector expertise ✓ Diagnostic of collections area (including recoveries and restructuring) ✓ Segment by segment re-design ✓ Future roadmap for collections function 20#21Credit Review Implementation Project "Project Kilele" Key Achievements; ✓ Underwriting process optimization ✓ Reclassification of sectors and sub-sectors ✓ NPV (Net Present Value) Restructuring Model Early Warning System Enhanced Strategic Collections ✓ Client level action Plans ✓ Roll out of new Application For Facility forms. ✓ Improving Turn Around Time for facilities. ✓ Auto disbursements. ✓ Business Process Management System optimization ✓ Training for Frontline staff and service teams done to enable onboarding new customers with the new sectors and subsectors. ✓ Early Alert meetings at a segment level with the new guidelines. ✓ NPV (Net Present Value) Restructuring Model deployed ✓ Entire corporate and Co-operative book has been reclassified into the new Sector classification to enhance quarterly stress testing of customers by sector and subsector. ✓ Enhanced Client level action Plans to ensure regular and comprehensive update and actioning. ✓ Escrow buildup by our customers. GO BANK плити 21#22Driving SUSTAINABLE DEVELOPMENT GOALS D Sustainable Business: ESG Integration Sti economic. social. environment. Sustainable Finance Initiative As a leading financial institution, our sustainability agenda is deeply embedded into our core business, allowing us to offer financial services in a responsible & sustainable manner. Our approach therefore aims to balance economic, social, environmental & governance pillars to harness sustainable opportunities and manage risk. We have adopted the Kenya Bankers Association Sustainable Finance guiding principles and minimum standards in totality. ECONOMIC "We create channels for sustainable economic opportunity by ensuring strong financial performance and financial inclusivity" SOCIAL "The bank operates as a responsible corporate citizen by investing in staff welfare, co- operatives sector support & community engagement. ENVIRONMENTAL "We run our business in a way that ensures that our growth is sustainable in the long term and leaves minimal adverse impact on natural resources and the environment for the future generations." GOVERNANCE "Sustainability through Policy and Governance in Co-op Bank is deep rooted and is driven from the Board level Strategic theme no.6 : To operate as a good corporate citizen 22#23Driving Sustainable Business Economic Value ✓ Local Economic Impact О О SUSTAINABLE GOALS Ksh.310.2 Billion Loans & Advances Ksh.15-Million-member Co- operative Movement Banking. Ksh.184 Billion Government Securities. 1378 Local Suppliers Financial Inclusion -Universal Banking Model. ✓ KShs. 8.8 Billion Taxes (Corporate & PAYE) Governance ✓ Progressive governance framework ✓ Business Ethics ✓ Proactive Environmental & Social Policy ✓ Strategic Organizational Structure ✓ Compliant Reporting & Disclosure ✓ Board structure, policies & procedures Social Impact ✓ Co-op Consultancy & Bancassurance Intermediary Limited, 3057 Consultancies. ✓ Co-op foundation: 8368 Bright & Needy Students Supported. ✓ Partnership with IFC & Phillips: support smaller businesses in Africa's health sector ( USD 300 Million) ✓ Private sector-led Covid-19 Emergency Response Fund. Donated Kshs. 100 Million to support critical medical supplies and equipment such as ventilators. ✓ First Lady's Beyond Zero Campaign Kshs. 20M (2020) ✓ 74% Employees below 40yrs ✓ ✓ Robust HR policy framework to guide optimal human resource engagements and staff support. Attracting and retaining talent: 95% retention rate. ✓ Skills development & career progression through training, e-learning & coaching. Environment GÐ BANK Ongoing implementation of the CBK Guidance on Climate- Related Risk Management and NSE ESG disclosure guidance. Screening of loans & advances for environmental risk as laid out in the Environmental & Social Policy (E&S). Corporate, Co-operatives (Above USD 1M), MSME (Above USD 50K) Renewable Energy and Energy Efficiency investments -USD 3.4 Billion credit agreement. Continuous digitization of customer journeys and bank processes. Ongoing rehabilitation of 259.5Ha, Lusoi forest in Laikipia (5000 trees, plan to do 10,000 more) Signatory to the United for Wildlife's (UfW) Financial Taskforce 23#24Sustainable Business SUSTAINAIRE GOALS Championing Social Economic Empowerment Co-op Foundation Total Students Sponsored on Scholarship Program 8368 Additional Programs Empowerment of Youth in Transport Sector (Boda-Boda) GIZ grant funded program in Eastern, Central and Coastal Program. Education USA A University Scholarship Program funded by USAID. Jijali Program A Career/Work Readiness Program or Entrepreneurship targeting all our University Scholarship Beneficiaries. Community Service Program for University Scholarship Beneficiaries. Co-op Consultancy & Bancassurance Intermediary Limited 3057 Business advisory mandates. 20 Dedicated Consultants ✓ 464 FOSA- Financial Inclusion Deepening giz Deutsche Gesellschaft für Internationale. Zusammenarbeit (GIZ) GmbH USAID EMEA TOWEL GO BANK USAID FROM THE AMERICAN PEOPLE KENYA VISION 2030 24#25Award Winning Brand A bank continuously feted for its commitment to drive sustainable impact emeafinance AFRICAN BANKING AWARDS 2021 EMEA FINANCE AFRICAN BANKING AWARDS 2021 CEO of the year - Pan Africa Best Bank - Kenya Financial inclusion - Pan Africa Best Asset manager, Co-optrust Investments Services - Kenya Global SME Finance Awards 2021 GLOBAL SME FINANCE AWARDS 2021 Honorary Mention - Product innovation of the year 2021 VISA <b KENYA BANKERS ASSOCIATION VISA AWARDS 2021 Best SME acquirer solution roll out Best contactless champion - issuing Most financially inclusive bank KENYA BANKERS ASSOCIATION: SUSTAINABLE FINANCE CATALYST AWARDS 2019 Overall, Winner The Group GMD & CEO awarded a 2nd honorary doctorate from the Co-operative university of Kenya 25 GO CO-OPERATIVE BANK 25 BANK We are you#26Regional Business (Kshs. Million) 4 branches in Juba 5 Non-oil collection centers. Owns 31% of CIC Africa Ltd- South Sudan 8,434 5,580 FY2020 ■ FY2021 4,436 3,072 974 1,178 Total Assets Total Deposits Loans And Advances 1,659.4 588.9 3,253.0 1,065.5 253.9 123.2 Total operating Income Net Interest Income Total Operating Expenses Profit Before Tax -421.7 ◉FY2020 ■ FY2021 -1,655.0 26#27Channel Performance пл 27#28Growing Digital Channels 94% of our Transactions are on alternative Channels providing opportunities for efficiency. Mobile • Internet • ATM . Agency 40% growth in Mobile Transactions year on year. FY2020 FY2021 GO BANK Merchant/POS Banking 731 1,232 Branch Banking 13,848 14,075 Internet Banking 2,525 5,185 ATM 26,037 24,213 Agency Banking Mco-op Cash 37,254 38,943 98,115 137,431 28#29Mco-op Cash Mobile Wallet A unique Offering ווי MCo-op GO Cash Kwa mikono yako... unaweza BANK Access your mini-statement on MCo-op Cash GO BANK Co-operative Bank is regulated by the Central Bank of Kenya MCo-op Cash is an all-telco, all products mobile banking service that enables customers to enjoy access to a variety of banking services, money transfer and payment services. It's a virtual account with a simple menu where the customers mobile number acts as the account number and can be opened and operated end-to-end from the phone without having to visit the branch. Mco-op cash has continued to reach many customers who would have remained unbanked and underbanked. Mco-opcash main features includes; ✓ Full access to other wallets in the market ✓ Affordable pricing compared to Brick & Mortar ✓ Payment of goods and services directly to Telco Paybill/Till number ✓ Cardless withdrawal at the bank's agent and ATM network ✓ External and Internal funds transfer ✓ E-Credit - Access to the mobile based loans offered by the bank. 29#30Digital lending focus E-credit A superior product for our customers that continues to scale and is a key revenue source A key focus area, Kshs. 192.7B disbursed to Date. ✓ Kshs.6 Billion disbursed per month on average. ✓ Yield of 8% flat Consumer based salary checkoff hence lower credit risk. ✓ Short term tenure of maximum 90 days. Get an instant relief from cash worries by applying for a Flexi Cash Salary Advance Loan GO BANK 30#31E-Credit A superior product for our customers that continues to scale and is a key revenue source Kshs. 70.5B Disbursed in 2021 Cumulative Mcoop Cash Loan Customer Numbers ( In 'ooo') 6,577 4,641 2,924 1,389 694 388 28 183 FY 2014 FY2015 FY 2016 FY2017 FY2018 FY2019 FY2020 FY2021 E-Credit - Key Growth Focus 13% 2% Cummulative Mcoopcash Loan Book - In Millions 192,706 122,225 85% 63,761 20,169 ■ E-Flexi 225 1,644 4,865 10,102 Business Unsecured Business Plus FY 2014 FY2015 FY 2016 FY2017 FY2018 FY2019 FY2020 FY2021 31#32I Mobile Banking Leveraging Mobile Banking to grow commissions 40% increase in Transactions. 37% growth in commissions Over 200 Billion deposits through mobile 98 Transactions - Millions 137 FY2020 FY2021 Commission - Millions 7,496 5,486 FY2020 FY2021 32#33Agency Banking Growing Co-op Kwa Jirani Agency Banking Agents' terminals up by 14% ■ Transactions up by 5% ■ Revenue up by 2% 23,389 No. of Agents 26,693 Total Revenue (Millions) 435 445 FY2020 FY2021 FY2020 FY2021 Total No. of Transactions (Millions) 39 Deposits Generated by Agents (Ksh.Bn) 208 37 175 FY2020 FY2021 FY2020 FY2021 Agency Banking 33 Dec 20 Jan 21 Feb '21 Mar '21 Apr '21 May '21 Jun '21 July '21 Aug '21 Sept '21 Oct'21 Nov'21 Dec'21 DEPOSIT WITHDRAWAL -#3434 Agency Banking Growing Co-op Kwa Jirani Agency Banking · Key deposit mobilization channel Higher deposit than withdrawal 47% 46% Transaction Type (%) 31% 30% 16% 15% 7% 7% Cash Deposits Cash Withdrawal Bal Enquiry FY2020 FY2021 65.0% 62.8% Deposits Transaction Value distribution (%) 30.0% 30.5% Withdrawal FY2020 FY2021 Others 6.7% 5.0% Others#35Financial Highlights 35#36Strong Financial Position (Kshs. Billion) 537 FY2020 379 Total Assets 580 Total Deposits 287 Net Loan Book 310 FY2021 FY2020 FY2021 Shareholder Funds 409 100 91 GÐ BANK 1111 FY2020 FY2021 FY2020 FY2021 36#37Strong Financial Position (Kshs.Billion) Total Assets Loan book (Net) FY2021 FY2020 YoY Change 579.8 536.9 8% 310.2 286.6 8% Government Securities 184.1 161.9 14% Total Deposits Borrowed Funds 408.5 378.9 8% 42.9 46.0 -7% GÐ BANK 1 Shareholders Funds 100.2 90.7 10% 37#38•Diversified across segments. •Highest book is in Personal Banking; Diversified loan book Check off; deductions are done at source. Diversified across various Government/quasi-government employees. Appraisal of both employer and employee for optimal risk-return. 44.3% 48.6% FY2020 FY2021 GÐ BANK 20.2% 18.9% 13.1% 12.0% 7.8% 7.2% 6.7% 7.2% 6.5% 5.1% 1.4% 1.1% Personal Corporate Mortgage Sacco Asset Finance & IPF MSME Agri-Business 38#39Diversified loan book across sectors 50% in Personal consumer which is well performing Low relative exposure in high-risk sectors Tourism and Hotels <1% Manufacturing 2.6%. GÐ BANK FY2021 ■ FY2020 0.0% Mining & Quarrying 0.0% 0.8% Tourism, Restraurant & Hotels 0.8% 1.4% Agriculture 1.9% Building & construction 1.7% 2.0% Manufacturing 2.6% 2.3% Energy & Water 2.6% 3.9% 9.3% Real Estate 9.4% 9.6% Financial services Transport & Communication 10.4% 10.1% 9.9% 11.7% Trade 12.3% Personal consumer 47.0% 50.4% 39#40Improving Non-Performing Loan Book The Bank's NPL has improved from a high of 16.5 in FY2020 to 12.7% in FY2021 18.1% ■ FY2020 ■ FY2021 14.0% 16.5% 14.1% 13.1% 12.7% Group Bank Industry Below Industry NPL Level GÐ BANK Supported by; Proactive Credit Management Strategies. ✓ Business Growth. ✓Consumers and Businesses continued recovery from the impact of Covid 19 Pandemic. 40#41GÐ BANK Adequate Coverage Kshs. 7.9 Billion loan loss provisions in FY2021 (Kshs. 8.1 Billion in FY2020), indicating improving quality of our asset book as businesses and households continue to recover from the impact of Covid-19 pandemic. 2.9% FY2020 Cost of Risk 2.7% FY2021 Inclusive of the Discounted Value of Securities, our coverage is at 99.2% IFRS Coverage (Bank) 51.8% 68.5% FY2020 FY2021 41#42Portfolio Trends - Sector NPL 0% Mining & Quarrying 0% Energy & Water 0% 0% 5% Personal consumer 6% 7% Financial services 11% Transport & Communication 10% 20% 15% Agriculture Tourism, Restraurant & Hotels Building & construction Trade Real Estate Manufacturing 46% 22% 24% 28% 36% 33% 26% FY2021 ■ FY2020 50% 56% Sector is 50% of our loan book Sector is 12% of our loan book Sector is 9% of our loan book 53% Sector is 2.6% of our loan book 74% GÐ BANK 42#43Well-diversified Liability Portfolio FY2021 ■ FY2020 Government Banking 8.4% 11.2% 9.9% Corporate banking 6.2% Saccos & Agribusiness Institutional Banking Retail MSME 10.4% 10.1% 16.4% 19.3% GO BANK Current Accounts Fixed Deposits Savings Accounts FY2021 ■Transactions Accounts ■Call Deposits M 11% 25.4% 24.7% 24% 29.4% 28.6% 5% 28% 32% 43#44An Optimally balanced Kenya Shilling asset & funding book FUNDING: LOCAL VS. FOREIGN CURRENCY LCY Funding FCY Deposits FCY Borrowed Funds LOAN BOOK: LOCAL VS. FOREIGN CURRENCY FCY LCY 5% 7% 89% 91% 9% GÐ BANK 44#45Strong capital to support future growth Capital buffers for sustainable growth Core Capital to Total Risk weighted Assets Total capital to Total risk weighted assets 15.4% 10.5% 15.6% 16.9% 14.5% Core capital to Total Deposits 17.0% 19.6% 19.1% 8.0% GÐ BANK FY2020 FY2021 Core capital to Total risk weighted assets ―Minimum statutory ratio FY2020 FY2021 Total capitalto Total risk weighted assets -Minimum statutory ratio FY2020 FY2021 Core capital to Total Deposits ―Minimum statutory ratio 45#46Optimal Asset and Funding Mix Asset Categories Funding Categories 46 GÐ G BANK FY2021 FY2020 8% Net Loans 9% Net Loans 7% 8% ■Government Securities Cash and Cash 53% 53% Equivalent 32% 30% Other Assets 17% FY2021 5% ■Deposits 7% 71% ■Shareholders funds 17% ■Borrowed funds ■ Other liabilities ■Government Securities Cash and Cash Equivalent Other Assets FY2020 4% 9% Deposits 70% Shareholders funds Borrowed funds ■ Other liabilities#47Strong Liquidity to support investments Liquidity ratio Loans/(Deposits+Borrowed Funds) 52.2% FY2020 53.8% FY2021 Total Loans to Total Deposits 75.7% 75.9% 67.5% 68.7% FY2020 FY2021 FY2020 FY2021 GÐ BANK 11 47#48FY2021 FY2020 YoY Change Total Interest Income 55.6 48.8 13.9% Total Interest Expenses Net Interest Income Fees and commissions 14.6 12.5 17.0% 41.0 36.3 12.9% 15.2 12.9 18.1% Forex Income 2.8 2.8 0.4% Sustainable Other income 1.3 1.7 -24.6% Profitability Growth Total Operating Income 60.4 53.8 12.3% Loan loss provision 7.9 8.1 -2.3% Staff costs 13.3 13.4 -0.7% Other operating expenses 16.8 17.9 -5.7% Total other operating expenses 38.1 39.4 -3.3% Profit before tax and exceptional items 22.3 14.4 54.8% Exceptional items-Share of profit of associate 0.3 -0.1 303.8% Profit before tax 22.6 14.3 58.6% Tax 6.1 3.5 76.0% Profit after tax 16.5 10.8 53.0% Earnings per share 2.8 1.8 53.0% 48#4949 Subsidiary Contribution FY2020 Kshs.'000' Growth Kshs.'000' Growth % 21,325,327 16,960,630 4,364,697 26% (421,683) (1,593,926) 1,172,243 74% Co-operative Bank of Kenya Ltd Co-operative Bank of South Sudan FY2021 Kshs.'000' Ltd Co-op Trust Investment Services Ltd 140,362 69,958 70,404 101% Co-op Consultancy & Bancassurance 803,930 788,577 15,352 2% Intermediary Ltd 703 Kingdom Securities Ltd (17,114) 17,817 104% 549,549 Kingdom Bank Ltd (76,326) 625,875 820% 22,398,187 Co-op Bank and Subsidiaries Total 16,131,799 6,266,388 39% 250,675 (149,939) 400,614 267% Associates share of profit Group Profit before Tax 22,648,862 14,281,861 8,367,002 59% 6,104,960 3,468,985 2,635,975 76% Income Tax Expense 16,543,902 10,812,876 5,731,027 53% Group Profit After Tax 49#50Key Ratios Return on Average Equity Return on Average Assets Earnings per Share 12.7% 17.3% 2.2% 3.0% 1.8% 2.8% FY2020 FY2021 FY2020 FY2021 FY2020 FY2021 GÐ BANK 50#51■ Key Ratios Average Return on Interest Earning Assets 11.3% 11.5% NIM on Earning Assets 8.1% 8.1% 8.9% NIM on Loans 8.9% FY2020 FY2021 FY2020 FY2021 FY2020 FY2021 GO BANK 51#52CIR - Group 73.2% 63.0% 58.1% 49.9% FY2020 FY2021 CIR - Bank 66.6% 51.8% FY2020 61.5% 48.0% FY2021 ■ Key Ratios ■ Cost Income Ratio (With provision) Cost Income Ratio (Without provision) Non-Funded to Total Operating Income 32.5% 32.1% ☑ Cost Income Ratio (With provision) Cost Income Ratio (Without provision) Total Cost of funds: (Deposit + Borrowed funds) 3.2% 3.3% GO BANK FY2020 FY2021 FY2020 FY2021 52#53GO BANK ■ Dividend Payment The Co-operative Bank Group continues to execute a proactive growth strategy anchored on a strong enterprise risk management framework and deepening of our market dominance. We shall, riding on the unique synergies in the over 15- million-member co-operative movement that is the largest in Africa, continue to pursue strategic initiatives that focus on resilience and growth in the various sectors of the economy. The Board of Directors has recommended subject to shareholders approval at the next AGM on 27th May 2022, a dividend payment of KShs. 1/= per share (Kshs. 5.9 Billion payment). 53#54GO BANK Thank You [email protected]