Coop Bank targets expansion after profit soars to Sh6.58bn

Co-op Bank Group Managing Director and Chief Executive Officer Gideon Muriuki. [File, Standard] Co-operative Bank of Kenya has announced fresh branch expansion across the country after its net earnings grew by 7.69 per cent in the first three months of the year. The Nairobi Securities Exchange-listed firm announced after posting a net profit of Sh6.58 billion in the first quarter of the year compared to Sh6.11 billion in a similar period the year before. Co-op Bank Group Chief Executive Gideon Muriuki said in a statement the bank's jump in earnings was driven by growth in total income, coupled with control on costs which remained flat offering relief into the lender's bottom line. The bank's total operating income grew by 5.1 per cent from Sh17.9 billion to Sh18.8 billion. Its total non-interest income remained stable to stand at Sh7.1 billion similar to the performance recorded a year ago. Its net interest income grew by 8.6 per cent from Sh10.8 billion to Sh11.7 billion in 2023. Total operating expenses increased marginally by 0.5 per cent from Sh9.8 billion to Sh9.9 Billion. "The Co-operative Bank Group continues to pursue strategic initiatives that focus on resilience and growth in the various economic sectors," said Dr Muriuki. Co-op Bank holds its Annual General Meeting virtually on Friday where shareholders will be voting on the proposal by the bank's Board of Directors to pay out a Sh1.50 dividend per share. The proposed dividend payout is similar to last year's and amounts to a total cash payout of Sh 8.8 billion in a year the bank reported net earnings of Sh 23.2 billion. If approved by shareholders tomorrow, the generous dividend will offer a huge relief to the bank's shareholders notably the co-operative movement who hold a majority 64.5 per cent stake in the lender. Dr Muriuki said the bank has managed to strike a healthy balance between investments in brick-and-mortar and staff growth, on the one hand, and cost containment on the other. Co-op's Branch network has expanded to a total of 195 outlets with 4 in South Sudan. The lender has planned 15 additional outlets this year, with 2 at Imaara Mall on Mombasa Road and Ugunja in Siaya already opened. Its subsidiary, Kingdom Bank, opened a new Branch in Gikomba, to serve markets where Kingdom Bank has niche expertise notably MSMEs. The lender said further investments in digitization saw the bank successfully upgrade its core banking system to the latest version of Finacle from Infosys -rated among the best banking systems worldwide, said the bank. "The Bank continues to invest in a competitive team set to serve at existing functions at the same time tap new growth opportunities across all areas of the business," said Muriuki. "Staff Numbers have grown from 4,864 as at the close of 2022 to 5,361, creating job opportunities for over 497 young people." Co-op Bank said earlier it had set aside a Sh12.6 billion war chest for affordable loans to small businesses. The bank also recently signed a Sh3.25 billion long-term credit agreement with global institutional investors led by the German fund, Deutsche Investitions (DEG). "The Bank has secured a long-term loan of $25 million from DEG - a subsidiary of KfW Group, for micro, small and medium-sized enterprises (MSMEs) that are managed or owned by women. This is aligned to the Bank's contribution to the achievement of the global Sustainable Development Goals (SDGs)," said Mr Muriuki. Co-op Bank is the third of three major lenders to announce its earnings this week, offering investors insight into the possible strength of commercial lenders in a challenging economic climate.

Coop Bank targets expansion after profit soars to Sh6.58bn

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