Co-op Bank posts Sh14.1b profit amid branch, digital expansion

Co-operative Bank of Kenya (Co-op Bank) has reported an 8.4 per cent growth in profit after tax for the first half of this year, driven by income growth. This is as the tier one lender aggressively expands its digital and physical footprints across Kenya and South Sudan.

In results released yesterday, the lender stated that its net earnings increased by Sh1.1 billion to reach Sh14.1 billion for the six months, compared to Sh13 billion in the same period last year, signalling sustained growth driven by its strategic initiatives.

“The strong performance by the bank is in line with the group’s strategic focus on sustainable growth, resilience, and agility, riding on the ‘Soaring Eagle’ Transformation Agenda,” said Co-operative Bank Group Chief Executive Gideon Muriuki.

The bank’s profit growth in the first half was supported by a 10.8 per cent growth in operating income, which increased to Sh43.5 billion, driven by a 23.1 per cent rise in net interest income.

Total assets grew by 13.2 per cent to Sh811.9 billion, while customer deposits reached Sh547.7 billion, a 7.9 per cent rise.

Co-operative Bank is increasing its branch network. It has opened 15 new branches this year, bringing its total to 212, including five in South Sudan.

Hiring spree

Recent openings include branches in Kibwezi, Imaara Mall in Nairobi, Ugunja, Luanda, Isibania, Maai Mahiu, Dagoretti Market and Marimanti.

Others are Ruiru Nord Mall, Naromoru, Eldoret Airport Road, Eldama Ravine, Westlands Square Executive Centre, Eastleigh BBS Mall, and Rumuruti.

Its subsidiary, Kingdom Bank, has also been expanding, recently opening its 23rd branch in Machakos County. In South Sudan, the bank opened its fifth branch in Wau.

The expansion has fuelled a hiring spree by the lender, with staff strength increasing to 5,850, creating 450 new jobs from 2023.

Co-op Bank is also focused on digital channels, with over 90 per cent of all customer transactions now occurring through its digital and alternative channels. 

These channels are supported by an omni-channel platform, 622 ATMs, cash deposit machines, and more than 16,000 Co-op kwa Jirani agents. The M-Co-op Cash mobile wallet disbursed Sh36.4 billion in loans year-to-date, including Sh5.7 billion to Micro, Small and Medium Enterprises (MSMEs). 

The MSME loan portfolio now constitutes 17.3 per cent of the bank’s total portfolio, benefiting 249,319 customers.

Co-op Bank benefited from strong subsidiary performance. 

Co-op Trust Investment Services Ltd reported a pre-tax profit of Sh360.8 million, a 152.8 per cent increase, with funds under management reaching Sh461.7 billion.

This makes it one of the largest fund managers in the industry. 

Co-op Bancassurance Intermediary Ltd earned a pre-tax profit of Sh790.8 million.

Co-op Bank of South Sudan Ltd posted a restated profit of Sh56.9 million after accounting for hyperinflation, while Kingdom Bank Ltd generated Sh491.1 million in pre-tax profit.

Kingdom Securities Ltd also contributed a pre-tax profit of Sh63.2 million.

Muriuki reiterated the bank’s commitment to its strategic priorities, highlighting its universal banking model, robust digital presence, extensive physical footprint, deep customer base of over 9.4 million account-holders, and its unique integration with Africa’s largest co-operative movement.