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Co-op Bank Declares Steady Sh8.8bn Dividend Amid 5pc Profit

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Co-op Bank Declares Steady Sh8.8bn Dividend Amid 5pc Profit

Following a 5.5 percent surge in net earnings for the fiscal year concluding on December 31, 2023, Cooperative Bank Group investors are set to receive Sh8.8 billion in dividends.

The latest financial report, disclosed on Thursday, unveils a rise in after-tax profit to Sh23.2 billion, up from Sh22 billion in the preceding fiscal term.

This upward trajectory is credited to the Group’s steadfast commitment to sustainable growth, resilience, and adaptability.

Additionally, shareholders witnessed a 5.5 percent expansion in funds, soaring to Sh113.6 billion from Sh107.7 billion in 2022.

“The strong performance has led to a sustained increase in shareholder value as reflected in the competitive Return on Equity of 21.0 per cent,” Cooperative Bank Group Gideon Muriuki said. 

The bank’s board has recommended a dividend payout of Sh1.50 per share, subject to approval by the regulators and shareholders. 

The lender’s gross profit for the year rose by 10 per cent to Sh32.4 billion on sound cost management, with total operating expenses decreasing by 6.1 per cent from Sh42.2 billion to Sh39.7 billion. 

Generally, the Group reported excellent efficiency gains from the various initiatives to record a Cost-to-Income Ratio of 47 per cent in the year under review compared to 59 per cent in 2014 when the bank began its growth and efficiency journey. 

The bank’s total operating income grew by 0.6 per cent from Sh71.3 billion to Sh71.7 billion while total non-interest income grew by 2.8 per cent from Sh25.7 billion to Sh26.5 billion.

Net interest income remained stable to stand at Sh45.2 billion as compared to Sh45.5 billion the previous year. 

In June last year, the Group upgraded the core banking system to the latest version of Finacle from Infosys, one of the best-rated platforms globally, marking a critical milestone in the bank’s digitisation journey to enhance service excellence.

This saw the bank’s Mco-op Cash mobile wallet drive substantial non-funded income streams with five million customers registered and Sh75.3 billion in loans disbursed in 2023, averaging Sh6.3 billion per month.

So far, the bank has successfully moved over 91 per cent of all customer transactions to alternative delivery channels, a 24-hour contact centre, 599 ATMs & Cash Deposit Machines (CDMs), mobile and internet banking and over 17,000 networks of Co-op kwa Jirani agents.

Net loans and advances grew to Sh374.2 billion, a 10.3 per cent growth from Sh339.4 billion in 2022.

External funds from development partners stood at Sh67.3 billion from Sh48.1 billion in 2022.

Increased deposits and efficient cost management saw the lender cement its position as the third biggest lender in Kenya after KCB and Equity, with total assets of Sh671.1 billion, a 10.5 per cent growth from Sh607.2 billion in the same period last year.

All Group’s subsidiaries reported growth in earnings, with Co-op Consultancy and Bancassurance Intermediary posting a gross profit of Sh877.1 million, riding on strong penetration of the Bancassurance business.

The Group’s subsidiary in South Sudan reported a profit of Sh291.3 million in FY2023 compared to Sh132.7 million in 2022, a 119.5 per cent growth.

 Co-op Trust Investment Services on the other hand contributed Sh226 million to the Group’s profits, an 8.6 per cent growth.

The subsidiary has Funds under management of Sh218.4 billion.

Kingdom Bank Limited contributed Sh1.08 billion to the Group’s gross earnings, a 36.4 per cent growth from Sh792.6 million reported in 2022.

Over 208,000 customers have taken up the bank’s MSME packages rolled out in 2018, and 58,850 have been trained in business management skills.

Last year, the bank disbursed Sh18.6 billion to MSMEs through a Mobile E-Credit solution. MSMEs make up 15.8 per cent of the bank’s total loan book.

“We continue to pursue strategic initiatives that focus on resilience and growth in the various economic sectors,” Muriuki said.

He added that this is anchored on a successful universal banking model supported by an innovative digital presence, a wide physical footprint, and the unique synergies in the over 15-million-member cooperative movement.

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