Co-operative Bank of Kenya has announced a 4.4% increase in its net profit for the nine months ending September 2024. The Co-op Bank after-tax profit rose to Ksh19.21 billion, up from Ksh18.39 billion in the previous year.
Commenting on the results, Gideon Muriuki, Co-op Bank’s managing director, attributed the strong performance to the group’s emphasis on sustainable growth and strategic agility.
“The strong performance by the bank is in line with the group’s strategic focus on sustainable growth, resilience, and agility delivering a return on equity of 21.3 percent riding on the ‘Soaring Eagle’ transformation agenda,” said Gideon Muriuki, managing director at Co-op Bank.
The bank’s strong performance was driven by a 10.8% increase in revenue to Ksh59.16 billion, up from Ksh53.41 billion in the prior year. Net interest income, a key metric for banks, grew by 12.3% to Ksh36.87 billion, while non-interest income increased by 8.2% to Ksh22.28 billion.
Customer loans grew modestly by 0.9% to Ksh381.34 billion, while gross non-performing loans (NPLs) increased by 13.1% to Ksh70.01 billion. Despite the rise in NPLs, the bank’s strong capital position and prudent risk management practices helped to mitigate the impact on its overall financial performance.
Customer deposits surged by 18.7% to Ksh513.98 billion, reflecting the bank’s growing customer base and trust. Total assets increased by 13.5% to Ksh750.78 billion, and shareholders’ funds rose by 22.0% to Ksh131.83 billion.
The bank’s total operating expenses increased by 12.7% to Ksh32.68 billion, resulting in a cost-to-income ratio of 45.8%. The bank’s price-to-book ratio stands at 0.59, and its share price has increased by 27.2% year-to-date to Ksh14.50 as of November 13, 2024.
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Additionally, Kingdom Bank, which is 90 percent owned by Co-op Bank, saw its net profit retreat by 23 percent to Sh603 million due to a higher tax liability. Pre-tax profit had risen 14.5 percent to Sh897.7 million. Co-op Consultancy & Bancassurance Intermediary Limited posted a pre-tax profit of Sh824.3 million, marking a growth from Sh762.9 million, on increased penetration of its bancassurance business.
Co-operative Bank of South Sudan returned a pre-tax profit of Sh434.7 million before adjusting for hyperinflation, compared to Sh246.9 million in the preceding similar period. Co-op Trust Investment Services Limited contributed Sh254.9 million in pre-tax profit, marking a growth from Sh154.5 million as the subsidiary’s funds under management grew by 52.8 percent to close the period at Sh299.6 billion.
These results further come less than a week after billionaire investor Baloobhai Patel increased his stake in Co-op Bank, acquiring shares worth Ksh216.5 million between February and August 2024. Patel’s share purchases now position him as one of Co-op Bank’s largest individual shareholders, though he holds the third spot overall. Co-op Bank disclosed his stake in a filing with the Capital Markets Authority (CMA) on Monday.