By Bernard Matumbai
Co-operative Bank of Kenya’s net income jumped by 53 percent to a record Sh16.5 billion in the year ended December 2021 from Sh10.8 billion in the previous term, something that was attributable to higher interest income, investment in government and reduced expenses.
The bank recorded a 59 percent surge in pre-tax profit to stand at Sh22.6 billion, up from Sh14.3 billion realised in 2020. Co-op Bank has been keen on supporting Small Medium Enterprises (SMEs) and partnerships with Saccos in offering retail banking services.
At the same time, shareholders will be smiling their way to the bank with declared dividend at Sh1 per share, a Sh5.86 billion payout to be made on June 17 on the May 30 register. This pay-out is similar to the ones made in the two previous years.
The bank’s earnings ballooned to Sh55.6 billion, riding on increased total interest income at 14 percent, with the loan book and investment in government securities growing to Sh310 billion and Sh184 billion respectively.
On the other hand, Co-op Bank’s fees and commissions, the non-interest formation, rose to Sh19.3 billion, an impressive Sh1.9 billion increase, as reduced interest expenses by Sh2.1 billion to Sh14.6 billion chipping in to better the bank’s overall performance even with customer deposits rising by 29 percent to hit the Sh407 billion mark.
Total operating income grew by 12 percent to Sh60.4 billion up from Sh53.8 billion registered in the previous year, with total non-interest income rising from Sh17.5 billion to Sh19.4 billion signifying an 11 percent jump.
The bank also saw its interest income grow by 13 percent to stand at Sh41 billion, up from Sh36.3 billion, with the bank’s asset base growing 8 percent to hit Sh579 billion.
According to the Group Managing Director and Chief Executive Dr Gideon Muriuki, Co-op Bank’s recently acquired subsidiary, Kingdom Bank, previously trading as Jamii Bora Bank, recorded Sh498 million in net income in the period under review, rising from the ashes of a Sh10 million the previous term. This, Dr Muriuki averred, positively impacted on the group’s consolidated earnings.
The Sh1 billion August 2020 acquisition on the premise of a rescue deal partly forms Co-op Bank’s growth strategy on the local front against a backdrop of untapped opportunities. It goes without mentioning that South Sudan accounts for the bank’s sole foreign interests.
Funding its growth through retained earnings, the recent dividend declaration bequeathed the bank with a multibillion-shilling portfolio balance. The top-tier lender is in the process of opening seven new branches across the country this year alone, potentially bringing the bank’s total distribution network to 200.
Co-op Bank’s sustained implementation of a universal banking model has played a pivotal role in its growth initiatives, with over 90 percent of customer transactions shifting to alternative delivery channels including mobile banking, 561 ATMs, 26,000 agency banking terminals (Co-op Kwa Jirani), internet banking and digital banking.
