Co-op Bank records Sh18b half-year profit on subsidiaries growth

Co-operative Bank of Kenya Group Managing Director and CEO Gideon Muriuki. [File, Standard] 

Co-operative Bank of Kenya (Co-op Bank) has posted a 28 per cent surge in half-year net profit, marking its strongest-ever first-half performance.

The record earnings were driven by a boom in subsidiary revenues and an improving loan book, helping the lender defy broader economic headwinds that have weighed on Kenya's banking sector.

Also, net profit for the six months that ended on June 30 rose to Sh18 billion from Sh14.1 billion a year earlier, the bank said in a statement.

The results cement Co-op Bank's position as one of the country's best-performing tier-one lenders, even as the sector grapples with elevated non-performing loans and the spillover effects of the Middle East conflict on energy costs and inflation.

"This strong performance underscores the significant gains made under our 2025-2029 Good to Great Strategy and the 'Soaring Eagle' Transformation Agenda," Group Managing Director and CEO Gideon Muriuki said in the statement.

In a rare bright spot for Kenya's labour market, the bank increased staff numbers to 6,591 from 5,850 employed a year earlier, adding 741 net new jobs over the past year as it invested in operational capacity and its youth banking agenda.

The bank has formalised a dedicated youth financial services division, targeting over 10 million young customers in the medium term.

The group's universal banking model was a key engine of growth during the period.

The Bank's asset quality also improved significantly, with the group's non-performing loan (NPL) ratio falling to 13.9 per cent from 17.2 per cent in H1 2025, aided by proactive credit management and customer engagement.

Kingdom Bank, the retail-focused subsidiary, nearly doubled pretax profit, rising 77.8 per cent to Sh873 million. Fund management arm Co-optrust Investment Services also grew pretax profit by 77.5 per cent to Sh640.5 million, supported by funds under management of Sh505.2 billion.

Co-op Bancassurance Intermediary posted a pretax profit of Sh812.7 million, while the group's South Sudan operation swung to a Sh224 million pretax profit from Sh56.9 million a year earlier. Kingdom Securities, the capital markets specialist, grew pretax profit by 23.3 per cent to Sh77.9 million.

While the net loans and advances grew 18.1 per cent to Sh462.2 billion, total deposits also increased by 11.2 per cent to hit Sh623.2 billion as net interest income increased by 13 per cent to Sh33.2 billion, and total operating income climbed by 12.5 per cent to Sh48.9 billion.

The statement further indicates that the Bank's total assets also expanded by 7.1 per cent to Sh869.5 billion, as shareholders' funds increased by 9.4 per cent to Sh171 billion.

The group maintained a strong liquidity ratio of 57.3 per cent and a total capital-to-risk-weighted-assets ratio of 22.9 per cent.

Over 90 per cent of all customer transactions were processed through alternative delivery channels, reflecting the bank's sustained digital leadership.

Agency banking also deepened its reach, with deposits generated by Co-op Kwa Jirani agents rising by 8.7 per cent to hit Sh92.5 billion.

The bank's e-credit platform disbursed Sh40.4 billion during the half-year, bringing cumulative disbursements since inception to over Sh561.2 billion.

The report shows that the platform has served 15.6 million cumulative MCo-op Cash loan customers.

During the half-year, the bank disbursed over Sh27 billion to youth customers, supporting more than 500,000 young entrepreneurs, while the micro, small and medium enterprises (MSMEs) remained a core segment, accounting for 16.5 per cent of the bank's loan book and 23.1 per cent of customer deposits.

The lender's record first-half performance sets a high bar for peers including Equity Group Holdings and Absa Bank Kenya, which are due to report their interim results in the coming weeks. Attention will now turn to whether Co-op's broad-based growth is an outlier or a signal of broader resilience across the banking sector.