Co-op Bank profit up 8pc to Sh6.6bn in first quarter

Co-operative Bank CEO Gideon Muriuki

Cooperative Bank of Kenya Group Managing Director Gideon Muriuki (left) during a past investor briefing. 

Photo credit: File | Nation Media Group

Co-operative Bank of Kenya has posted a 7.7 percent growth in net profit to Sh6.58 billion in the first three months ended March 2024 on increased income and contained operating costs.

The growth in net profit from Sh6.11 billion recorded in a similar quarter of last year came on the back of net interest income growing 8.6 percent to Sh11.7 billion.

Non-interest income was relatively unchanged at Sh7.08 billion in the quarter under review, compared with Sh7.09 billion in the preceding similar quarter.

“The strong performance by the bank is in line with the group’s strategic focus on sustainable growth, resilience, and agility,” said Gideon Muriuki, managing director at Co-op Bank.

Co-op Bank’s operating expenses increased marginally by 0.5 percent to Sh9.86 billion from Sh9.82 billion, improving the group’s cost-to-income ratio to 44.1 percent compared with 46.3 percent in the quarter that ended March 2023.

The lender increased its provisioning for loan defaults by four percent to Sh1.59 billion while staff costs went up 12.7 percent to Sh4.46 billion on the back of salary increments and the hiring of new employees as it opened eight new branches.

Co-op Bank, which last year hired 536 employees, has already opened two new branches this year and plans to add 13 more before the close of the year, in what could lead to more hiring.

“The bank continues to invest in a competitive team set to serve at existing functions and at the same time tap new growth opportunities across all areas of the business,” said Mr Muriuki.

Co-op’s performance was also helped by the subsidiaries. Kingdom Bank, which is 90 percent owned by Co-op Bank, saw its net profit for the quarter that ended March 2024 rise 33 percent to Sh341.7 million from Sh256.3 million it had recorded in a similar period last year.

Co-op Consultancy & Bancassurance Intermediary Limited posted a pre-tax profit of Sh305 million as Co-operative Bank of South Sudan returned a pretax profit of Sh110 million which translated to a Sh71.3 million monetary loss when adjusted for hyperinflation.

Co-op Trust Investment Services Limited posted Sh75.5 million pre-tax profit from Sh51.2 million, marking a 47.6 percent growth. The subsidiary’s funds under management hit Sh227.2 billion compared with Sh194 billion at the end of March last year.

The group’s total assets grew 13.2 percent to Sh714.7 billion while net loans and advances to customers increased by five percent to Sh378.1 billion.

Customer deposits grew to Sh481.8 billion from Sh419.8 billion, marking a 14.8 percent increase. The review period saw external funds from development partners grow 24 percent to Sh60.1 billion.

Co-op Bank will on Friday hold its annual general meeting where shareholders are expected to endorse a Sh1.50 per share dividend amounting to Sh8.8 billion that the board proposed last month.

Shareholders who were in the bank’s share register as at the end of April 29 will receive the dividend. The top shareholder, Co-op Holdings Co-operative Society Limited, will receive Sh5.68 billion on its 64.56 percent stake.

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Note: The results are not exact but very close to the actual.