Co-op Bank wins Financial Times’ award for growth

Co-operative Bank of Kenya managing director, Gideon Muriuki. Photo/CHRIS OJOW
Co-operative Bank of Kenya managing director, Gideon Muriuki. Photo/CHRIS OJOW 

Co-operative Bank of Kenya’s growth model and prospects have earned it the Best Bank in Kenya award by the Financial Times of London.

The bank, which also scooped the runners up position for the best quoted company of the year category in the recent Capital Markets Awards by Think Business, has seen its stock price more than double over the past 12 months.

Drummond Investment Bank research analyst Robert Munuku said the bank’s share was expected to go up as investors anticipate full-year results and as its investments begin to pay off.

“Even with the current price-earnings ratio, as the banks investments begin to mature we should see an additional price increase,” he said.

Co-operative Bank’s group managing director Gideon Muriuki said it will focus on growth and enhancing shareholder value.

“Our share has appreciated by over 112 per cent since the beginning of year 2010, positioning it among the best performing stocks in the year,” he said.

Investor confidence

Investor confidence has pushed the stock from Sh9.50 at the beginning of February last year to Sh20.25 as at close of trading on Tuesday.

“The Banker Awards 2010 judges gave the bank the gong for its diversified revenue base, growth in customer numbers by 70 per cent over the past 12 months to 1.2 million and introduction of new card payment schemes. The judges said that new products such as mortgage lending, loans targeting the agricultural sector, entry into stock brokerage and insurance had strengthened the bank which is also planning regional expansion through a partnership with Co-operative Sudan and other institutions in East Africa.

Deposits grew

“Through its business model, which is unique in the country, Co-operative Bank is able to reach out to more than seven million members of the co-operative movement, many of who would not be serviced by traditional banks,” the judges added.

The bank’s net profits went up 76 per cent to Sh3.7 billion from Sh2.1 billion for the nine months ended September last year, buoyed by a 55 and 30 per cent growth in non-interest and interest income respectively.

It’s deposits and loans grew by 53 and 33 per cent respectively for the nine months while Kingdom Securities — its stock-brokerage subsidiary — returned Sh29.2 million in profits compared to the Sh9.5 million in losses it reported the previous year.

Last year, the bank also announced it had paid between Sh120 and Sh130 million to CIC Insurance, increasing its ownership stake from two to 25 per cent.

The judges said the bank was offering a universal banking model, diversifying its product range into high potential services, including mortgage finance, asset finance, stock brokerage and insurance services.