Business

Co-op Bank posts Sh6.6 billion net profit for Q1 2024

Friday, May 17th, 2024 06:26 | By
Co-op Bank posts net profit of Sh12.1b in the first six months
Co-op Bank . PHOTO/Print

Co-op Bank has reported a net profit of Sh6.58 billion for the first quarter of 2024 on increased income, a jump from Sh6.11 billion posted in the same period last year.

Profit before tax increased to Sh9.01 billion, indicating a growth of 10.6 per cent compared to Sh8.15 billion in 2023.

The performance saw the group’s total assets surge to Sh714.7 billion, a remarkable 13.2 per cent increase from Sh631.1 billion in the corresponding period last year, reflecting the bank’s solid investments.

Co-op Bank’s net loans and advances experienced a noteworthy uptick, reaching Sh378.1 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 that is the largest in Africa.

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

Gigital transformation

Co-op Bank Group Managing director Gedion Muriuki  said the bank’s digital transformation has seen M-Co-op Cash Mobile wallet become a major driver for non-funded income streams, with loans disbursed averaging Sh6 billion per month.

“Mco-op Cash Mobile wallet continues to drive substantial non-funded income streams with Sh18.1 billion in loans disbursed in Q12024, averaging Sh6 billion per month,” he said.

The bank disbursed Sh3.9 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’s earnings were enhanced by subsidiaries including Kingdom Bank Ltd which reported a profit before tax of Sh350.3 million in the first quarter of 2024, marking a remarkable growth of 33.9 per cent 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 Sh75.5 million in the first quarter of 2024, reflecting a 47.6 per cent growth from the previous year. The subsidiary continues to manage Funds Under Management of Sh227.2 billion, contributing to the bank’s overall financial performance.

Operating income

During the first quarter, Co-op Bank’s total operating income increased by 5.1 per cent to Sh18.8 billion, while total non-interest income remained stable at Sh7.1 billion, similar to the performance recorded a year ago. Net interest income grew by 8.6 per cent from Sh10.8 billion to Sh11.7 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 per cent in the first quarter of 2024, a significant improvement from 59 per cent in FY2014 on operational and cost management. During that quarter, 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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