Fri | Sep 22, 2017

Assamba keeping close tabs on loan operations, redefines job functions at COK

Published:Friday | May 26, 2017 | 5:00 AMNeville Graham
COK Sodality CEO Aloun Ndombet Assamba leads the charge at the credit union's Blast Off & 50th Anniversary Launch on January 19, 2017. The new CEO is shaking up operations to sustain COK's financial health.

​Aloun Ndombet Assamba has made some changes since taking back the helm of COK Sodality, all meant to sustain momentum at the credit union whose lagging financial health is showing signs of a turnaround.

The continuing adjustments include plans for a new banking platform that COK is now seeking a tech firm to develop.

"Yes, we have made changes. You can see it in the areas of responsibilities, reporting relationships and sphere of operation," Assamba told the Financial Gleaner nearly seven months into her second stint as CEO of COK Sodality.

The changes implemented have seen a reduction in the portfolio responsibilities of some officials and new functions assigned to others, all to refocus the co-operative on operations.

For example: "The person who was our risk and compliance officer is now our chief operating officer," said Assamba. "This has allowed us to promote somebody to be the new compliance officer. The truth is that with the responsibilities that are needed under the regulatory requirements, we can't have somebody who is directly involved in the operations in the risk and compliance function - that has to be separated," she said.

The new chief has also shifted some responsibilities from business development officer AndrÈ Gooden to chief financial officer Deryke Smith.

Assamba ran COK from 1994 up to 2002 when she entered representational politics. That career later led to a stint in the arena of diplomacy as ambassador to the United Kingdom, a posting that ended after the February 2016 change of government.

She was rehired by COK to replace Jacqueline Mighty last November.

COK Sodality Co-operative Credit Union, the fourth-largest in a market of around 34 community banks, had a poor year in 2015 when it reported a loss of $42 million. That loss appeared to have turned around prior to Mighty's departure, as the credit union reported a surplus of nearly $60 million for the full year ending December 2016 - which meant only two months of the period would have been directly impacted by the new CEO.

Assamba said a critical area of underperformance was COK's loan portfolio, notwithstanding that last year its value climbed more than nine per cent or half-billion dollars to $6 billion. The issue of concern was the quality of some loans on the books.

That led to adjustments in the loans department, including the centralisation of loan approvals and a hard look at delinquencies.

Loan delinquency rates at the credit union peaked at 10 per cent in 2012, which was then double the industry benchmark rate of five per cent, but has now fallen back to 7.83 per cent, according to COK data.

"COK made a change last year in how we adjudicated loans. Instead of individual officers making the decision, the applications are sent to a central credit unit. They are now able to cooperatively look at loans and share experiences, and so on," said Assamba. "This has, therefore, led to a big improvement in the quality of the credit. That, in turn, had an impact on the delinquency and the provisioning for bad debt," she said.

Bad debt recoveries amounted to $29 million in 2015. Last year, recoveries improved to $33 million, and Assamba is predicting an even better outcome this year.

COK Sodality is also looking to do away with its decades-old IT platform that serves its 270,000 members, and is insufficient for the current size of the operation. When that system was first put in place, COK's membership base was just around 140,000.

"We are identifying a new banking platform and along with that, we've made changes in our management information systems department. The system that we developed in-house has served us very well, but because of the new reporting relationships, this system is no longer able to cover all that we used to cover," Assamba said.

"We now have two systems running and we are moving to do some integration. We are just concluding a Request for Proposal for a new banking platform that we expect to streamline our systems and to reduce the reliance on manual processes," she said.

Close to operations

COK has budgeted $2 million for the IT project to be spent over three to five years.

Since her return, Assamba said as part of her management strategy, she stays close to the operations of the five branches of COK.

"I also walk the floor. The staff at any of our branches doesn't know when I am coming, but they know I will. This keeps them on their toes and performing optimally, and I must say they have responded very well - they are working hard," the CEO said.

"When I walk the floor, I make sure to engage with those doing business in the membership hall. They feel important and they react positively to what they say is a refreshing approach. Our members need to be constantly reminded that they are the important people in the credit union and that everything that we do is aimed at helping them to achieve their goals."

Members' meetings a great help

The management team has similarly sought closer relationships with the credit union's members. To this end, COK has hosted six members meeting since February at all branch towns, including Montego Bay, Mandeville and St Catherine. At one meeting, 200 members turned up in Half-Way Tree in St Andrew during a torrential downpour in April, Assamba said.

"The members' meetings have been a great help because not only does it help us to reconnect, but it keeps our members engaged and informed," Assamba said, noting that the engagement has led to a spike in business.

"The deposits are up and it has put us in a position where we don't have to borrow funds for on-lending to our members," the CEO said.

"The lives of our members must be improved by any product that they use at COK, so whether it is the Family Indemnity Plan, Golden Harvest or Partner Plant, they must feel better at the end of the period for the transaction," Assamba said.

COK Sodality is currently valued at $8.57 billion by assets.

neville.graham@gleanerjm.com