The Kenya Police Sacco was in 2016 the fourth largest deposit taking savings and credit cooperative society in the country, with a market share of 5.1 per cent in terms of assets, out of the 175 registered saccos.
Global Credit Ratings (GCR) has affirmed Kenya Police Sacco Society long-term and short-term national scale ratings of BB+(KE) and B(KE) respectively, according it a stable outlook.
Police Sacco was in 2016 the fourth largest deposit taking savings and credit cooperative society in the country, with a market share of 5.1 per cent in terms of assets, out of the 175 registered saccos.
The society serves employees of the National Police Service, business community, civil service and other salaried employees.
“The ratings of Police Sacco reflect its growing local franchise in payroll lending, buoyant earnings performance, strong capitalisation, and enhancements to risk management practices,” the agency said in its latest rating notification.
The ratings are valid until October 2018. Its pre-tax earnings rose 74.9 per cent to Sh812 million in 2016, thanks to its new I-Cash facility, a mobile platform enabling loan application.
Its after-tax earnings grew 81.5 per cent to Sh793 million in 2016, benefitting from growth in tax exempt members’ interest income. As a result the tax provision decreased 31.7 per cent.
The society’s return on average equity (ROaE) and assets (ROaA) strengthened to 21.2 per cent and 4.2 per cent respectively.
The society’s core capital grew by 25.1 per cent to Sh4.2 billion in 2016, supported by strong earnings and a conservative dividend rate of 17 per cent on share capital.
The gross non-performing loan ratio increased to 2.1 per cent in 2016, albeit below industry average of 5.2 per cent and regulatory prudential maximum of five per cent.
Its liquidity ratio stood at 32 per cent against a statutory minimum of 15 per cent. The decline in liquidity ratio was mainly due to increase in withdrawable deposits and decrease in the proportion of liquid assets on the balance sheet.
GCR noted, the society’s stable funding – comprising equity and non-withdrawable deposits, make up 91.6 per cent of total funding in 2016, mitigating liquidity pressures in the short term.
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