Co-op Bank records Sh34.8 billion profit in FY24
The Board of Directors has recommended a dividend of Ksh 1.50 per share, subject to approval by the regulators and shareholders
Co-op Bank profit before tax expanded to Ksh 34.8 billion for Financial Year 2024, a commendable 7.5 per cent growth compared to Ksh 32.4 billion recorded in Financial Year 2023. This represents a profit after tax of Ksh 25.5 billion compared to Ksh 23.2 billion reported in 2023, a growth of 9.8 per cent.
This is the best performance ever by the bank, Co-op Bank Group Managing Director and CEO Dr Gideon Muriuki said.
He said 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. It has led to a sustained increase in shareholder value as reflected in the competitive return on equity of 19. 7 per cent.
The Board of Directors has recommended a dividend of Ksh 1.50 per share, subject to approval by the regulators and shareholders. The Annual General Meeting (virtual) will be held on Friday, May 16.
Muriuki said the bank’s total assets grew to Ksh 743.2 billion, a 10.7 per cent growth from Ksh 671.1 billion in the same period in 2023 while net loans and advances remained stable at Ksh 373.7 billion compared to Ksh 374.2 billion.
Customer deposits grew to Ksh 506.1 billion, a 12.1 per cent increase from Ksh 451.6 billion.
External funds from development partners were Ksh 55.4 Billion compared to Ksh 67.3 billion in 2023.
According to Muriuki, shareholders’ funds have grown to Ksh 145.4 billion, a 28% increase from Ksh 113.6 billion in 2023 driven by the strong growth in retained earnings of Ksh 16.7 billion.
The bank’s total operating income grew by 12.5 per cent from Ksh 71.7 billion to Ksh 80.6 billion.
Total non-interest income grew by 10.1 per cent from Ksh 26.5 billion to Ksh 29.1 billion while net interest income grew by 13.9 per cent from Ksh 45.2 billion to Ksh 51.5 billion.
Total operating expenses grew by 17.7 per cent from Ksh 39.7 billion to Ksh 46.7 billion.
Muriuki said the Group reported excellent efficiency gains from the various initiatives to record a Cost-to-Income Ratio of 47.2 per in FY2024, from 59% in FY2014 when it began it Growth & Efficiency journey.
Co-op Bank digital channel strategy
He added that the bank continues to leverage its core banking system (latest version of Finale from Infosys – one of the best rated globally) to support the Group’s digital synergy. The system continues to enhance service excellence and support innovative and advanced banking solutions.
“Through our digital channel strategy, the Bank has successfully moved over 92% of all customer transactions to alternative delivery channels, a 24-hour contact centre, 617 ATMs & Cash Deposit Machines (CDMs), mobile & internet banking and over 16,000 network of Co-op kwa Jirani agents,” said Dr Muriuki.
“Our Omni-channel platform continues to offer users accessibility and enhanced experience. The platform interfaces online banking through personal computers, mobile phones and USSD availing our services to all customers through their preferred channel yet retain the same user experience from wherever they are,” he added.
According to Muriuki, the Meo-op Cash Mobile wallet continues to drive substantial non-funded income streams with Ksh 76. 7 billion in loans disbursed in FY2024, averaging Ksh 6. 39 billion per month.
He said over 235,617 customers have taken up the MSME packages we rolled out in 2018, and 66,100 have been trained on business management skills. Year to date, the bank has disbursed Ksh 14.2 billion to MSMEs through our Mobile E Credit solution. MSMEs make up 16.6 per cent of its total loan book.
“Our unique model of retail banking services avails access to cash for FOSA operations, enabling 619 FOSA outlets to support over 15 million Sacco members access banking services even in rural/remote areas,” Muriuki said.
Co-op Bank’s branch network has expanded to a total of 211 outlets (5 in South Sudan) with Muriuki revealing that it plans to open 15 additional outlets this year, with 14 already opened at lmaara Mall on Mombasa Road, Ugunja, Luanda, lsibania, Maai Mahiu, Dagoretti Market, Marimanti, Ruiru Nord Mall, Naromoru, Eldoret Airport Road, Eldama Ravine, Westlands Square Executive Centre, Eastleigh BBS Mall and Rumuruti.
Kingdom Bank also opened its 23rd branch in Machakos County along Mbolu Malu Road, being the fourth branch opened recently.
He said the bank continues to invest in a competitive team set to serve at existing functions and, at the same time, tap new growth opportunities across all areas of the business. Staff Numbers have grown from 5,400 as at the close of 2023 to 5,863, creating job opportunities for over 463 young people.
Co-op Bank subsidiaries
With regard to Co-bank subsidiaries, Co-op Bancassurance Intermediary Ltd posted a profit before tax of Ksh
1.2 billion in FY2024, riding on strong penetration of Bancassurance business.
On the other hand, Co-operative Bank of South Sudan that is a unique joint venture (JV) partnership with Government of South Sudan (Co-op Bank 51 per cent and GOSS 49 per cent) made a profit before tax of Ksh 453.8 million in FY2024. This performance was however restated to reflect the changes in general purchasing power of the South Sudanese Pound resulting in a profit of Ksh 11.1 million.
Co-op Trust Investment Services Ltd contributed Ksh 386.4 million profit before tax in FY2024 compared to Ksh 226.0 million in FY2023, a commendable 71 per cent growth. The subsidiary has funds under management currently at Ksh 381 billion.
Kingdom Bank Limited, a niche MSME bank, contributed a profit before tax of Ksh 1.07 billion in FY2024.
Commitment to ESG excellence
Muriuki noted that in 2022, the bank embarked on an enhanced Environmental, Social and Governance (ESG) roadmap to integrate ESG considerations into its operations with several key milestones achieved.
He said the bank’s commitment to ESG excellence was celebrated at the 2024 Kenya Bankers’ Sustainable Finance Catalyst Awards, with the bank emerging as the Overall Award Winner. This was the fifth win by the bank since the inception of the award seven years ago.
“The bank is playing an active role in supporting climate change initiatives (IFRS S1 & S2, Green Finance Taxonomy) that are being led by our regulator Central Bank of Kenya and the industry lobby group Kenya Bankers Association. Co-op Bank has the highest capacity-building rate in Kenya Bankers Association Sustainable Finance Module XII on Climate Risk,” said Muriuki.
“We have, in line with Sustainable Development Goals (SDG) number 13 ‘Take urgent action to combat climate change and its impacts’ embarked on a Climate Risk Project with the aim of formulating an effective Climate Strategy Roadmap and Implementation Plan to chart a clear path towards our climate goals,” he added.
Co-op-a-maji loan
The Bank, in partnership with Water.org has launched a new Co-op-a-maji loan to support businesses in the Water, Sanitation & Hygiene (WASH) sector. This is in line with our ESG focus, enabling communities access safe water and sanitation. The facility targets individuals, water bottlers & distillers, licensed borehole drilling companies, water service providers, manufacturers and distributors of water harvesting equipment.
Co-op Bank Foundation, the Group’s social investment vehicle, continues to provide scholarships to gifted but needy students from all regions of Kenya. The sponsorship includes fully paid secondary education, full fees for University education, Internships, and career openings for beneficiaries. The foundation is fully funded by the bank and has supported 11,639 students since the inception of the programme.
The bank was recognised as Bank of the Year (Kenya) at the 2024 The Banker, Bank of the year Awards (by Financial Times of London). Additionally, at the 2024 C/0 Africa Awards, the bank was named Winner – Banking Sector.
“The Co-operative Bank Group continues to pursue strategic initiatives that focus on resilience and growth in the various economic sectors. This is anchored on a full universal banking model supported by an innovative digital presence, a physical footprint, and the unique synergies in the over 15-million-member co-operative movement that is the largest in Africa,” he said.
