Co-op bank dividend payout
Last year the bank maintained a Ksh5.86 billion dividend payout despite full-year net profit declining by 24.4%.

Co-operative Bank of Kenya shareholders are likely to enjoy another year of dividends following 18.9% rise in the lender’s nine months’ net profit to Ksh11.6 billion. Although its board of directors did not announce an interim dividend, Co-op Bank is among few lenders that shared their profits with shareholders last year during the Covid-19 disruption period when most lenders tightened their purses.

In 2020, the bank maintained a Ksh5.86 billion dividend payout despite full-year net profit declining 24.4% on increased provisions for bad loans. This bold move led to its CEO, Mr Gideon Muriuki, being named Best Bank CEO in Africa and Co-operative the best bank in Kenya. The bank was also praised for also retaining workers despite the adverse effects of the Covid-19.

Meanwhile, Co-operative Bank of Kenya reported 18% growth in net profit for the nine months to September 2021, surpassing full-year earnings for the previous year, boosted by increased income. The lender made a profit after tax of Ksh11.6 billion in the third quarter compared to Ksh9.8 billion in a similar period in 2020.

Overall, it’s been a good year for banks, which needed just three quarters to surpass their annual earnings last year. Central Bank of Kenya (CBK) data shows the banking sector’s pre-tax profit from Kenyan operations rose 63.1% to Ksh145.48 billion in the nine months to September 2021.

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This bullish performance has increased shareholder optimism for fat dividends as the year closes. Shareholders last year had to contend with dividend freezes or cuts as banks deployed cash preservation strategies to cushion themselves against Covid-19 economic effects.

Co-operative Bank has picked the trend, with an uptick in its earnings. “The strong performance by the bank exceeds the pre-pandèmic performance and is in line with the group’s strategic focus that supports growth, resilience and agility,” according to Mr Gideon Muriuki, the Co-op Bank Chief Executive.

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Co-op Bank, majority-owned by co-operative societies, saw its revenues grow by 19.2% to Ksh44.4 billion from Sh37.2 billion in the same period last year. Net interest income grew by more than a fifth to Sh28.7 billion from Sh23.6 billion, as borrowers resumed servicing their loans.

Kingdom Bank, formerly Jamii Bora Bank, made a profit of Ksh413 million in the third-quarter, continuing a turnaround from a loss of Ksh1 billion when it was acquired by Co-op in August 2020. This surpassed the Ksh300 million net profit that the bank’s board had projected for the full year ending December 2021.

The third-largest bank in asset size, Co-op Bank saw its total assets grow by Ksh82 billion to Ksh592.9 billion compared to Ksh510.9 billion in the same period last year.

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