Co-operative Bank of Kenya has posted a 4.4 percent growth in net profit to Sh19.2 billion in the nine months ended September 2024, on increased interest and non-interest income.
The growth in profit from Sh18.39 billion posted in the corresponding similar period last year was driven by a 12.3 percent increase in net interest income to Sh36.87 billion, and an 8.2 percent increase in non-interest income to Sh22.28 billion..
“The strong performance by the bank is in line with the group’s strategic focus on sustainable growth, resilience, and agility delivering a return on equity of 21.3 percent riding on the ‘Soaring Eagle’ transformation agenda,” said Gideon Muriuki, managing director at Co-op Bank.
The improved bottom line came despite operating expenses having risen by 12.7 percent to Sh32.68 billion, mainly on increased provisioning for loan losses and more spending on paying staff.
The provision for loan defaults rose by a third to Sh5.6 billion, while staff costs went up by 10.8 percent to Sh13.5 billion to reflect salary increment and the hiring of additional employees for the expanded branch network.
Co-op’s branch network has expanded by 11 branches to 204 compared to 193 outlets at the end of September last year. Between the two periods, Co-op’s staff size grew by 368 to close September with 5,617 employees.
The lender, which has a target of 15 additional outlets this year, has already opened eight branches spread across Co-op Bank Kenya, Kingdom Bank and Co-op Bank South Sudan.
Co-op, for instance, has opened branches at Imaara Mall in Nairobi, Ugunja in Siaya and Luanda in Vihiga County. Kingdom Bank recently opened a branch in Meru County, being its third this year.
Kingdom Bank, which is 90 percent owned by Co-op Bank, saw its net profit retreat by 23 percent to Sh603 million due to a higher tax liability. Pre-tax profit had risen 14.5 percent to Sh897.7 million.
Co-op Consultancy & Bancassurance Intermediary Limited posted a pre-tax profit of Sh824.3 million, marking a growth from Sh762.9 million, on increased penetration of its bancassurance business.
Co-operative Bank of South Sudan returned a pre-tax profit of Sh434.7 million before adjusting for hyperinflation, compared to Sh246.9 million in the preceding similar period.
Co-op Trust Investment Services Limited contributed Sh254.9 million in pre-tax profit, marking a growth from Sh154.5 million as the subsidiary’s funds under management grew by 52.8 percent to close the period at Sh299.6 billion.
The group’s cost-to-income ratio moved to 45.8 percent from 46.4 percent, pointing to improved efficiency.
Total assets grew by 13.5 percent to Sh750.8 billion, while customer deposits increased by 18.7 percent to Sh514 billion. Shareholders’ funds posted a 22 percent increase to Sh131.8 billion on the back of higher retained earnings.
