Boom for Co-op Bank shareholders as lender pays out Sh8.8b dividends
Business
By
Brian Ngugi
| Jun 11, 2024
The Co-operative Bank of Kenya (Co-op Bank) on Monday disbursed Sh8.8 billion as dividends to shareholders for the year ended 2023.
The payout represented a dividend of Sh1.50 per share, after the tier-one lender maintained a consistent dividend payout on the back of sustained profitability last year.
In addition, the Bank said it has built "sufficient capital buffers" through a prudent retention strategy that has boosted total shareholder funds to Sh127 billion.
The dividend payout, which is equivalent to the one paid in year 2022, was approved by the regulators, and by shareholders at the bank's Annual General Meeting held on May 17.
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The payout represents a significant cash injection to the Bank's strategic and majority shareholder Co-op Holdings Co-operative Society which represents Kenya's
Co-operative Movement, who is in line to receive a dividend of Sh5.7
billion for its 64.5 per cent stake.
The largest beneficiaries of the dividend include key Savings and Credit Co-operatives (Saccos) that include Harambee, H&M, Kenya Police Sacco, Afya and Masaku Teachers.
"The Co-op Bank Group aims to deliver a sustained increase in shareholder value by
retaining a strategic focus on sustainable growth, resilience, and agility," said
Dr Gideon Muriuki, Group Managing Director Co-op Bank upon the distribution of the dividend.
The returns to Co-op Bank shareholders came on the back of the jump in net profit to Sh23.2 billion driven by income growth and a significant 6.1 per cent drop in operating expenses equivalent to Sh2.5 billion, from Sh42.2 billion to Sh39.7 billion.
"The Group reports excellent efficiency gains from the various initiatives to record a cost-to-income ratio of 47 per cent in Financial Year 2023 from 59 per cent in Financial Year 2014 when we began our growth and efficiency journey," Dr Muriuki said last month.
"The strong performance has led to a sustained increase in shareholder value as reflected in the competitive Return on Equity of 21.0 per cent," he said in a statement.