By Felix Wanderi
Co-operative Bank board of directors has recommended a dividend of Ksh 1.50 per share, subject to approval by the regulators and shareholders.
Co-op Bank Group CEO Gideon Muriuki said the proposed dividends represent a 50 per cent increase on the Ksh 1.00 per share paid out last year.
He added that the bank will pay out a total of Ksh 8.8 billion to shareholders, the highest ever paid by the bank.
The dividend is a big boost to cooperatives, who have 64.5 per cent stake at the bank, as they are set to receive approximately Ksh 5.7 Billion in dividends.
The bank has recorded a 30 per cent growth in net profit for the year ending December 2022.
The growth translates to a profit before tax of Ksh 29.4 billion in 2022 compared to Ksh 22.6 billion recorded in 2021. This represents a strong profit after tax of Ksh. 22.0 billion compared to Ksh. 16.5 billion reported in 2021.
Co-op Bank Group CEO Gideon Muriuki said the strong performance by the bank is in line with the group’s strategic focus on sustainable growth, resilience and agility.
He added that the strong performance has led to a sustained increase in shareholder value as reflected in the competitive return on equity of 21.2 per cent.
The Bank’s total assets grew to Ksh 607.2 billion, a 4.7% growth from Ksh 579.8 billion last year.
Net loans and advances grew to Ksh 339.4 billion, a 9.4% growth from Ksh310.2 billion in 2021.
Customer deposits grew to Ksh 421.8 billion, a 3.9% increase from Ksh 407.7 billion.
External funds from development partners stands at Ksh 48.1 billion from Ksh 42. 9 billion in 2021.
Shareholders’ funds grew to Ksh 107.7 billion, a 7.4% increase from Ksh100.2 Billion in 2021.
The bank’s operating income grew by 17.9 per cent from Ksh 60.4 billion to Ksh 71.3 billion.
Total non-interest income grew by 32.7% from Ksh19.4 billion to Ksh 25.7 billion while net interest income grew by 10. 9 per cent from Ksh 41.0 billion to Ksh 45.5 billion.
The Group reported excellent efficiency gains from its various initiatives to record a cost-to-income ratio of 47.1 per cent in 2022.
Credit management remained a key focus area, with the Group prudentially making provisions of Ksh 8.7 million.
“Through our digital channel strategy, the bank has successfully moved 92 per cent of all customer transactions to alternative delivery channels, a 24- hour contact centre, 542 ATMs, mobile and internet banking and over 17,000 networks of Co-op kwa Jirani agents,” the Group CEO said.
He said there is key focus on digital banking, with the all-telco MCo-op Cash Mobile wallet continuing to play a pivotal role in the growth of non-funded income with 5 million customers registered and loans worth Ksh 84.2 billion disbursed year-to-date, averaging over Ksh 7 billion per month.
The Bank’s over 170,000 customers have taken up the MSME packages that were rolled out in 2018 and 33,673 have been trained on business management skills.
“We have disbursed Ksh 25.4 billion to MSMEs through our Mobile E-credit solution. MSMEs are a critical part of economic recovery post-Covid and contribute up to 16.9 per cent of our total loan book,”Muriuki said.
The bank’s unique model of retail banking through services such as Sacco FOSA accounts has enabled it to provide wholesale financial services to over 484 FOSA outlets.
Co-operative Bank Group is one of the largest financial institutions with 5 subsidiaries namely Kingdom Securities Ltd, Co-op Trust Investment Services Limited, Co-op Consultancy Bancassurance Intermediary Ltd, Kingdom Bank Limited and Co-operative Bank of South Sudan.
Co-op Consultancy El Bancassurance Intermediary Ltd posted a profit before tax of Ksh 1.01 billion in 2022.
The Co-operative Bank of South Sudan, a unique joint venture partnership with the Government of South Sudan, registered a profit of Ksh 132.7 million in 2022.
Co-op Trust Investment Services contributed Ksh 208.1 million in profit before tax in 2022 with funds under management of Ksh 196.6 billion compared to Ksh189.2 billion in December 2021.
Kingdom Bank Limited (a niche MSME Bank) recorded a profit before tax of Ksh 803.8 million in 2022.
In 2022, the bank embarked on enhanced Environmental Social Governance (ESG) considerations into its operations with several key milestones achieved such as enhanced ESG governance to ensure the Bank has effective policies, procedures and practices in place to identify, manage and report on ESG matters that may impact the bank’s operations.
The Co-op Bank Foundation, the Group’s social investment vehicle, has continued to provide scholarships to gifted but needy students countrywide. The sponsorship includes fully paid secondary school education, full fees for university education and internships and career openings.
The foundation is fully funded by the bank and has supported 9,553 students since its inception.
The Bank also owns a 24.8 per cent stake in CIC Insurance Group and 25 per cent of Co-op Bank Fleet Africa Leasing Limited. The Bank’s footprint across Kenya and the region include 180 branches in Kenya, 4 in South Sudan, 542 ATMs and over 17,000 Co-op Kwa Jirani agency banking outlets that support the growth of its client base.
