Co-operative Bank of Kenya has posted a 7 percent increase in net profit, reaching Sh12.99 billion for the half-year ending June 2024, driven by growth in both interest and non-interest income.
The bank’s earnings rose from Sh12.14 billion in the same period last year, fueled by a 10.7 percent rise in net interest income to Sh23.9 billion and an 11.2 percent boost in non-interest income, totaling Sh15.4 billion.
“This solid performance underscores the group’s strategic focus on sustainable growth, resilience, and agility, resulting in a return on equity of 22.1 percent,” said Co-op Bank Managing Director Gideon Muriuki.
Operating expenses for the period increased by 11 percent to Sh21.3 billion, up from Sh19 billion, largely due to higher loan loss provisions and increased staffing costs. Provisions for loan defaults rose by 4.9 percent to Sh3 billion, while staff expenses jumped 14.8 percent to Sh9.1 billion, reflecting salary adjustments and new hires as the bank expanded its branch network.
“The bank is committed to building a competitive workforce to manage existing functions while seizing new growth opportunities across the business,” Muriuki added.
During the review period, Co-op Bank’s workforce grew by 317 employees, bringing the total to 5,426 by the end of June.
The lender also expanded its branch network by adding eight new branches, bringing the total to 199, with new locations at Imaara Mall in Nairobi, Ugunja in Siaya, and Luanda in Vihiga.
Its subsidiary, Kingdom Bank, opened a new branch in Meru, and Co-op Bank South Sudan also added a branch. The bank plans to open 15 more branches by the end of 2024.
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Kingdom Bank, which is 90 percent owned by Co-op Bank, reported a drop in net profit to Sh444.9 million from Sh522 million, primarily due to higher tax obligations. However, its pre-tax earnings rose by 21.8 percent to Sh635.5 million.
Co-op Consultancy & Bancassurance Intermediary Limited recorded a pre-tax profit of Sh682.7 million, while Co-operative Bank of South Sudan returned a pre-tax profit of Sh264.3 million.
Co-op Trust Investment Services Limited contributed Sh142.7 million in pre-tax profit, with funds under management growing by 17 percent to Sh231.3 billion.
The bank’s asset base expanded by 7.8 percent to Sh716.9 billion, while customer deposits grew by 9.4 percent to Sh507.4 billion, crossing the Sh500 billion milestone for the first time.
On Monday, Co-op Bank was included in the Morgan Stanley Capital International (MSCI) frontier markets index, enhancing its visibility among global investors. MSCI is a leading provider of investment data and analytics.
