Historic moment as Co-op Bank registers a 59 per cent profit growth

  • Kingdom Bank, formerly Jamii Bora Bank contributed over Sh 500 million profit before tax
  • The bank has recommended dividend payment of Sh 1 per share, or Sh 5.9 billion
  • Total Assets grew eight per cent during the year to Sh579.8 billion from Sh536.9 billion in the year 2020.

By Roy Hezron

The Co-operative Bank Group has reported a profit before tax of Shs.22.6 billion for the full year 2021, which is a strong indicator of growth at 59 per cent compared to Shs.14.3 billion recorded in full year 2020.

The Bank’s Board of Directors has also recommended a dividend payment of 1shilling per share, or Shs.5.9 billion payment. This is subject to shareholders approval at its next Annual General Meeting (AGM) on May 29, 2022.

The bank’s financial results released on March 17, 2022 by the Group Managing Director and Chief Executive Officer Dr. Gideon Muriuki shows a commendable profit of Shs.16.5 billion compared to Shs.10.8 billion in 2020.

“This is the best performance ever by the bank, and is in line with the Group’s strategic focus on sustainable growth and transformation,” said Dr. Muriuki.

The bank affirmed its position as the third-biggest lender in terms of asset value, hot on the heels of Equity Bank and KCB Group which have already crossed the one trillion line.

The bank’s total assets grew to Shs.579.8 billion, which is an 8 per cent growth from Shs.536.9 billion in the year 2020. Net loans and advances grew to Shs.310.2 billion, an increase of 8 per cent from Shs.286.6 billion in the year 2020.

The financial results show further that investment in government securities grew to Shs.184.1 billion from Shs.161.9 billion in 2020, representing a 14 per cent growth. Customer deposits rose to Shs.407.7 billion, reflecting a growth of 8 per cent from Shs.378.6 billion as borrowed funds from development partners stood at Shs.42.9 billion from Shs.46.0 billion in 2020.

Further, shareholders’ funds grew to Shs.100.2 billion, a 10 per cent growth from Shs.90.7 billion in 2020. This, according to Dr. Muriuki, enabled the bank to continue pitching for big ticket deals.

On comprehensive income, the bank’s total operating income grew by 12 per cent from Shs.53.8 billion to Shs.60.4 billion. Total non-interest income grew by 11 per cent from Shs.17.5 billion to Shs.19.4 billion as net interest income grew by 13 per cent from Shs.36.3 billion to Shs.41.0 billion. Total operating expenses improved by 3 per cent from Shs.39.4 billion to Shs.38.1 billion.  

“A successful universal banking model and the implementation of Sales Force Effectiveness has seen the Group customer base grow to over 9 million account holders across all sectors,” noted Dr. Muriuki.

The bank has also strengthened its digital banking with 5.3 million customers registered on the MCo-op Cash, giving loans worth Shs.71.2 billion year-to-date, averaging Shs.6 billion per month.

The Group prudentially provided Shs.7.9 billion in loan loss provisions compared to Shs.8.1 billion provided in 2020, indicating an improving quality of asset book as businesses and households continue to recover from the impact of the Covid-19 pandemic.

The lender, which bought Jamii Bora Bank and renamed it Kingdom Bank, made a profit before tax of Sh.512.4 Million in the financial year 2021.

The bank has turned around the mid-tier acquisition in its first year of operations, making the strategic purchase a great bargain.

“Co-op Bank Group continues to execute a proactive growth strategy anchored on a strong enterprise risk management framework, and deepening of our market dominance. We shall, riding on the unique synergies in the over 15 million-member co-operative movement (is the largest in Africa), continue to pursue strategic initiatives that focus on resilience and growth in the various sectors of the economy,” said Dr. Muriuki.

The Co-operative Bank of Kenya Limited is a listed company with the Nairobi Securities Exchange (NSE). The fete was reached on December 22, 2008.

Shares previously held by the 3,805 Co-operative Societies and Unions were ring-fenced under Coop Holdings Co-operative Society Limited, which became the strategic investor in the Bank with a 64.56 per cent stake.

The Bank runs three subsidiaries – Kingdom Securities Limited; a stockbroking firm with the bank holding a controlling 60 per cent stake. Co-op Trust Investment Services Limited is the fund management subsidiary wholly-owned by the bank, whereas Co-op Consultancy and Insurance Agency Limited (CCIA) is the corporate finance, financial advisory and capacity-building wing also wholly-owned by the bank.

Bancassurance Intermediary Limited and Co-operative Bank of South Sudan are other expansions that are semi-autonomous units.

The bank also has a 24.8 per cent stake in Co-operative Insurance Company (CIC) and 25 per cent of Co-op Bank Fleet Africa Leasing Limited.

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