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Co-op Bank Q1 Profit Rises, Riding on Strategic Focus on Growth

Co-operative Bank reported a net profit of Ksh6.58 billion for the first quarter of 2024, from Ksh6.11 billion

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Co-operative Bank of Kenya has reported a net profit of Ksh6.58 billion for the first quarter of 2024 as its strategic focus on sustainable growth and resilience continues to bear fruit. This is an increase from Ksh6.11 billion posted in the same period last year.

Profit before tax grew 10.6% to Ksh9.01 billion, up from Ksh8.15 billion in 2023. According to the Group’s performance results for the period ending 31st March 2024, total assets expanded to Ksh714.7 billion, a remarkable 13.2% increase from Ksh631.1 billion last year, reflecting the bank’s solid investment status.

Co-op Bank’s net loans and advances experienced an uptick, reaching Ksh378.1 billion, showcasing the bank’s continued support from various sectors of the economy through financing solutions, leveraging the over 15-million-member co-operative movement.

The Nairobi Securities Exchange (NSE) listed firm has started earning dividends from its new core banking system with over 93% of all customer transactions being processed through alternative delivery channels.

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Co-op Bank Group Managing director Gideon Muriuki said the bank’s digital transformation has seen M-Co-opCash mobile wallet become a major driver for non-funded income streams, with loans disbursed averaging Ksh6 billion per month.

“MCo-op Cash Mobile wallet continues to drive substantial non-funded income streams with Ksh18.1 billion in loans disbursed in Q1 2024, averaging Sh6 billion per month,” he said.

The bank disbursed Ksh3.9 billion to micro, small, and medium-sized enterprises (MSMEs) through its Mobile e-Credit solution, demonstrating its commitment to supporting small businesses.

Co-op Bank Q1 profit enhanced by subsidiaries including Kingdom Bank Ltd, which reported a profit before tax of Ksh350.3 million in the first quarter of 2024, marking a remarkable growth of 33.9% from the previous year.

Similarly, Co-op Bancassurance Intermediary Ltd and Co-operative Bank of South Sudan reported notable profits, showcasing the group’s diversified revenue streams.

Co-op Trust Investment Services Ltd recorded a profit before tax of Ksh75.5 million in the first quarter of 2024, reflecting a 47.6% growth from the previous year. The subsidiary continues to manage Funds Under Management of Ksh227.2 billion, contributing to the bank’s overall financial performance.

During the first quarter, Co-op Bank’s total operating income increased by 5.1% to Sh18.8 billion, while total non-interest income remained stable at Ksh7.1 billion, similar to the performance recorded a year ago. Net interest income grew by 8.6% from Ksh10.8 billion to Ksh11.7 billion in 2023, reflecting effective management of interest-earning assets and liabilities.

The bank’s efficiency gains saw a Cost-to-Income Ratio of 44.1% in the first quarter of 2024, a significant improvement from 59% in 2014 on operational and cost management. During the period under review, Co-op Bank secured a long-term loan of $25 million from DEG – a subsidiary of KfW Group, aimed at MSMEs managed or owned by women.

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BT Reporter
BT Reporterhttp://www.businesstoday.co.ke
editor [at] businesstoday.co.ke
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