Co-operative Bank of Kenya has announced a seven per cent increase in net profit, reaching Ksh13.0 billion for the first half of 2024. This growth reflects the bank's robust performance and strategic expansion efforts, marking a notable rise from the Ksh12.1 billion recorded in the same period last year.
The lender's Profit Before Tax surged to Ksh18.2 billion, representing a commendable 10.7 per cent growth compared to the Ksh16.4 billion reported in the first half of 2023.
Key to this strong performance was an increase in both interest and non-interest income. Net interest income jumped by 10.7 per cent to Ksh23.9 billion, while non-interest income rose by 11.2 per cent to Ksh15.4 billion. This rise in earnings point to the bank's successful diversification of income streams and effective management of its financial resources.
Co-op Bank’s Managing Director, Gideon Muriuki, attributed the bank's success to its strategic focus on sustainable growth and resilience. "The strong performance by the bank aligns with our commitment to sustainable growth, resilience, and agility, achieving a Return on Equity of 22.1 per cent," Muriuki stated.
However, operating expenses also saw an increase of 11 per cent, climbing to Ksh21.3 billion from Ksh19 billion. This rise was driven by higher provisioning for loan losses and increased staff costs, which grew by 14.8 per cent to Ksh9.1 billion.
The bank expanded its workforce by 317 employees, bringing the total to 5,426, as part of its strategy to support its growing branch network and enhance service delivery.
The bank’s branch network expanded by eight new locations during the review period, reaching a total of 199 branches.
New branches were opened in Nairobi’s Imaara Mall, Ugunja in Siaya, and Luanda in Vihiga. Additionally, Kingdom Bank, a Co-op subsidiary, and the bank’s South Sudan branch each added new branches.
Co-op Bank plans to further increase its branch network by 15 more branches by the end of 2024.
Kingdom Bank, which is 90 per cent owned by Co-op Bank, reported a net profit of Ksh444.9 million.
Other subsidiaries also showed strong performance, with Co-op Consultancy & Bancassurance Intermediary Limited reporting a pre-tax profit of Ksh682.7 million, and Co-operative Bank of South Sudan returning a pre-tax profit of Ksh264.3 million.
The bank’s asset base grew by 7.8 per cent to Ksh716.9 billion, while customer deposits surpassed the Ksh500 billion mark for the first time, increasing by 9.4 per cent to Ksh507.4 billion. Net loans and advances rose to Ksh375.6 billion, reflecting a 2.8 per cent growth from the previous year.
Co-op Bank has also achieved a significant milestone by joining the Morgan Stanley Capital International (MSCI) frontier markets index. This inclusion is expected to enhance the bank's visibility among global investors and provide a boost to its stock’s market presence.
The bank’s mobile financial services continue to thrive, with Co-op Cash Mobile wallets driving substantial non-funded income streams.
In the first half of 2024, Ksh36.4 billion in loans were disbursed through the mobile platform, averaging Ksh6.1 billion per month.
The MSME packages, introduced in 2018, have seen over 223,000 customers benefit, with 63,500 trained in business management skills.
During the review period, Ksh7.5 billion was disbursed to MSMEs through the Mobile E-Credit solution, highlighting the bank’s commitment to supporting small and medium-sized enterprises.
The bank's successful shift to alternative delivery channels has been noteworthy, with over 93 per cent of customer transactions now handled through 604 ATMs and Cash Deposit Machines, mobile and internet banking, and a network of over 17,000 Co-op kwa Jirani agents.
