Co-op Bank third-quarter profit jumps to Sh19b on higher income

Tier one lender Co-operative Bank of Kenya (Co-op Bank) has reported a strong financial performance for the third quarter of 2024, posting a profit of Sh19.2 billion.

The lender attributed the ="https://www.standardmedia.co.ke/business/business/article/2001495240/coop-bank-targets-expansion-after-profit-soars-to-sh658bn#google_vignette">4.42 per cent jump< in net earnings—compared to Sh18.5 billion reported the previous year—to growth in interest and non-interest income.

“The strong performance by the bank is in line with the group’s strategic focus on sustainable growth, resilience, and agility delivering a competitive return on equity of 21.3 per cent, riding on the ‘Soaring Eagle’ Transformation Agenda,” said Co-op Bank Group chief executive Gideon Muriuki.

The robust performance by Kenya’s banking sector is a positive sign for the broader financial sector and the economy as a whole.

Co-op Bank’s total operating income grew by 10.8 per cent from Sh53.4 billion to Sh59.2 billion, while its total non-interest income grew by 8.2 per cent from Sh20.6 billion to Sh22.3 billion.

This was as its net interest income grew by 12.3 per cent from Sh32.8 billion to Sh36.9 billion.

The group reported strong performance in its core banking operations and subsidiaries.

Co-op Bancassurance Intermediary posted a profit before tax of Sh824.3 million, while Co-op Bank South Sudan recorded a profit of Sh33.8 million, despite challenges posed by hyperinflation.

Co-op Trust Investment Services saw a significant 65 per cent growth in profit before tax, reaching Sh254.9 million.

Kingdom Bank, the group’s niche MSME bank, reported an 18.1 per cent increase in profit before tax to Sh929.2 million.

Co-op Bank has expanded its physical footprint and has opened eight new branches this year, bringing its total to 204 including five in South Sudan.

Muriuki said the bank’s commitment to physical presence aligns with its strategy to reach underserved communities and provide accessible financial services.

Expanded operations

He noted this expansion has also led to the creation of over 753 new jobs.

Kingdom Bank has also ="https://www.standardmedia.co.ke/sports/business/article/2001496941/boom-for-co-op-bank-shareholders-as-lender-pays-out-sh88b-dividends">contributed to the growth,< opening its 22nd branch in Meru County.

The bank’s South Sudan operations have also expanded with the opening of a fifth branch in Wau.

“We have planned 15 additional outlets this year, with eight already opened,” the CEO said.

The bank says it has successfully shifted over 93 per cent of customer transactions to digital channels, including mobile and internet banking, ATMs, and agent networks.

Co-op Bank is the second lender after Equity Group to release its third-quarter results for this year. Investors and shareholders are keenly watching how the lenders perform.

Equity on Tuesday reported net earnings of Sh39.2 billion on account of increased funded and non-funded income.