Co-operative Bank of Kenya’s (Co-op Bank) net profit for the half-year has jumped to KShs. 13 billion compared to KShs. 12.1 billion during a similar period in 2023.
- The mild growth was fueled by a tenfold growth in the total operating income which was watered down by a faster jump in operating expenses.
- The lender increased its holdings of government securities by 7.3 percent, with the lender’s total assets growing to KSh 716.9 Billion.
- Customer loans grew by 2.8 percent while customer deposits were up 9.4 percent to KSh 507.4 billion – crossing the KSh 500 billion mark for the first time – supported by subsidiary expansion.
Apart from its South Sudan subsidiary, the remaining businesses (Co-op Bancassurance, Co-op Trust Investment services, and Kingdom Bank) recorded positive returns.
Co-operative Bank of South Sudan, a unique joint venture (JV) with Government of South Sudan (Co-op Bank 51% and GOSS 49%), made a Profit Before Tax of Kshs 264.3 million during the period under review. This performance however translated to a monetary loss of Kshs. 252.4 Million attributable to hyperinflation accounting occasioned by currency devaluation of the South Sudan Pound.
Co-op Bancassurance Intermediary Ltd posted a Profit Before Tax of Kshs 682.7 million in 1H2024, while Co-op Trust Investment Services Ltd contributed Kshs. 142.7 million Profit Before Tax in 1H2024 compared to Kshs. 106.8 Million in 1H2023.
Kingdom Bank Limited contributed a Profit Before Tax of Kshs. 635.5 Million in 1H2024, a 21.8 per cent growth from Kshs. 521.9 Million reported in 1H2023.
“Through our digital channel strategy, the Bank has successfully moved over 93 per cent of all customer transactions to alternative delivery channels, a 24-hour contact centre, 604 ATMs & Cash Deposit Machines (CDMs), mobile & internet banking and over 17,000 network of Co-op kwa Jirani agents,” said Gideon Muriuki, the Bank’s Chief Executive Officer.
The bank’s staff numbers have grown from 4,864 as at the close of 2022 to 5,426.
CoOp’s Recent Wins and Losses
In the second week of July, Moody’s downgraded long term deposit ratings of Co-op bank alongside KCB and Equity Bank on weakened government credit profile. Co-op bank has however increased its exposure to government securities.
“The banks’ high sovereign exposure, mainly in the form of government debt securities held as part of their liquid assets, renders the banks’ capital, profitability and liquidity vulnerable to a sovereign stress event. In view of these links between sovereign and bank credit risk, these banks’ standalone credit profiles and deposit ratings are constrained by the Caa1 rating of the government” Moody’s said.
The global investment research firm Morgan Stanley Capital International (MSCI) added COOP to its premier Frontier markets index on Monday, increasing its visibility to international investors.
Co-operative Bank Kenya trades under the ticker symbol COOP at the Nairobi Securities Exchange, closed the previous session at KSh 12.80 ,a year-to-date gain of 12.3 per cent. COOP has a KSh 74.5 billion market capitalization making it the 6th most valuable stock at the Nairobi bourse.
