Capital Markets

Co-op Bank reclaims third position in asset rankings

COOPBank

Co-operative Bank branch along Haile Selassie Avenue, Nairobi. FILE PHOTO | NMG

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Summary

  • Co-operative Bank of Kenya reclaimed its position as the country’s third-largest lender by assets in the year ended December when it also declared the biggest dividend payout in the industry of Sh5.8 billion.
  • The lender closed the period with total Sh536.9 billion assets, placing it third after Equity Group’s Sh1 trillion and KCB Group (Sh987.8 billion).
  • NCBA Group, which emerged third in the prior year as the product of the merger of the former NIC Group and CBA Group, was relegated to fourth place with Sh527.9 billion assets.

Co-operative Bank of Kenya #ticker:COOP reclaimed its position as the country’s third-largest lender by assets in the year ended December when it also declared the biggest dividend payout in the industry of Sh5.8 billion.

The lender closed the period with total Sh536.9 billion assets, placing it third after Equity Group’s #ticker:EQTY Sh1 trillion and KCB Group #ticker:KCB (Sh987.8 billion).

NCBA Group #ticker:NCBA, which emerged third in the prior year as the product of the merger of the former NIC Group and CBA Group, was relegated to fourth place with Sh527.9 billion assets.

A bigger asset base and efficient management are among the key drivers of a bank’s profitability.

Co-op Bank’s asset-gathering efforts was aided by its acquisition of a 90 per cent stake in Jamii Bora Bank in August last year for Sh1 billion, with the new subsidiary subsequently renamed to Kingdom Bank.

Co-op Bank gained an additional Sh30.6 billion worth of assets from the deal. Co-op Bank managed to reclaim its spot despite being the only large bank to maintain dividend payouts over the past two years.

It has proposed a payout of Sh1 per share or a total of Sh5.8 billion, the largest cash distribution which is followed by Standard Chartered Bank Kenya #ticker:SCBK that has declared a total of Sh4.1 billion to holders of its ordinary and preference shares.

StanChart made the biggest effort to reward shareholders, proposing to pay out 76 per cent of its net earnings of Sh5.4 billion and was followed by Co-op Bank which will distribute 54.2 per cent of its Sh10.8 billion net profit.

Others like Equity have grown their assets partly by suspending or slashing dividend payouts.

Equity had declared a payout of Sh2.5 per share or a total of Sh9.4 billion for the year ended December 2019 but later rescinded the proposal.

It has also skipped dividends in the year ended December 2020, a move that has seen it save Sh18.8 billion cumulatively.

Equity’s crossing of the Sh1 trillion asset mark was also helped by its consolidation of the assets of Banque Commerciale Du Congo (BCDC) in which it bought a controlling 66.5 percent stake last year for $95 million (Sh10.4 billion).