Co-operative Bank of Kenya reported a net profit of Sh13 billion for the first half of 2024, an increase from Sh12.1 billion in the previous year, driven by higher income and customer deposits. The bank’s profit before tax reached Sh18.2 billion, reflecting a 10.7 percent growth from Sh16.4 billion in the same period in 2023.
The Nairobi Securities Exchange (NSE) listed bank’s emphasis on sustainable growth resulted in a 22.1 percent Return on Equity (RoE), highlighting its market strength. Customer deposits grew significantly to Sh507.4 billion, up 9.4 percent from Sh463.9 billion, which bolstered the bank’s liquidity.
Group Managing Director & CEO Gideon Muriuki noted that the bank’s total assets increased to Sh716.9 billion, a 7.8 percent rise from Sh664.9 billion in the same period last year.
“The group reports excellent efficiency gains from the various initiatives to record a Cost-to-Income Ratio of 46.6 per cent in 1H 2024 from 59 per cent in FY2014 when we began our Growth Efficiency journey,” he said.
During that period, net loans and advances surged, reaching Sh375.6 billion, a 2.8 per cent growth from Sh365.4 billion in 2023.
The bank continues to enhance its digital strategy through its new core banking system, which has facilitated the migration of over 93 percent of customer transactions to alternative delivery channels. This shift has not only improved customer experience but also increased cost-efficiency.
According to Muriuki, the Mco-op Cash Mobile wallet remains a significant driver of non-funded income. In the first half of 2024, the bank disbursed Sh36.4 billion in loans through the mobile platform, averaging Sh6.1 billion per month. This platform is crucial for expanding the bank’s reach and providing convenient financial solutions.
Shareholders have benefited from this growth, with shareholders’ funds rising to Sh126.7 billion, a 17 percent increase from Sh108.3 billion in 2023. This growth is supported by strong retained earnings of Sh15.1 billion, demonstrating the bank’s effective profit generation and retention.
Total operating income grew by 10.9 percent, from Sh35.4 billion to Sh39.2 billion, while total operating expenses increased by 11.1 percent, from Sh19.1 billion to Sh21.3 billion.
Despite the rise in expenses, the bank’s income growth outpaced the increase in costs, showcasing its operational efficiency and expense management.
In the first half of 2024, Co-operative Bank disbursed Sh7.5 billion to MSMEs via its Mobile E-Credit solution, with MSMEs now representing 15.9 percent of the total loan book. This highlights the bank’s commitment to fostering grassroots economic growth.
Co-op Bancassurance Intermediary Ltd also performed well, achieving a Profit Before Tax of Sh682.7 million, reflecting strong bancassurance business penetration. Conversely, Co-operative Bank of South Sudan, a joint venture with the Government of South Sudan, reported a profit before tax of Sh264.3 million, though this was partially offset by a monetary loss of Sh252.4 million due to hyperinflation accounting related to the devaluation of the South Sudan Pound.
