In a strategic move to bolster liquidity and capital reserves, Co-operative Bank Group (Co-op Bank), led by Kenyan banking mogul Gideon Muriuki, extended a loan of Ksh499 million ($3.75 million) to Kingdom Securities Limited, its stock brokerage arm, in 2023.
This loan, disclosed in the financial statements released by the group, is part of a continued effort to support the subsidiary, reinforcing its commitment to the financial services sector amidst its expansion endeavors.
Co-op Bank’s increased support for Kingdom Securities
The loan, marking an increase from the previous year’s advances, underscores Co-op Bank’s steadfast support for Kingdom Securities. In the preceding financial year, the subsidiary received Ksh45 million ($0.34 million), bringing the outstanding loan to Ksh544 million ($4.08 million) as of Dec. 31, 2023.
With relaxed repayment conditions, the loan is structured to be repaid in cash once Kingdom Securities achieves regulatory compliance levels and attains profitability. Notably, the loan remains non-secured, reflecting Co-op Bank’s confidence in the subsidiary’s potential for growth.
Gideon Muriuki’s influence
Gideon Muriuki, a key figure in Co-op Bank’s recent expansion initiatives, solidified his position among Nairobi Securities Exchange’s (NSE) top investors. With a two-percent stake in Co-op Bank, Muriuki’s holdings now value over $10 million, further amplifying his influence within the financial sector.
Under Muriuki’s leadership, Co-op Bank showcased a robust financial performance in 2023, with profits climbing by 5.22 percent to Ksh23.19 billion ($174.69 million). This growth trajectory propelled the group’s total assets to Ksh671.13 billion ($5.05 billion), representing a 9.53-percent increase from the previous fiscal year.
Kingdom securities’ financial outlook
Kingdom Securities Ltd., a subsidiary of Co-operative Bank Group, demonstrated resilience in FY 2023 despite economic headwinds. Profit after tax dipped to Ksh 2.99 million ($22,500) from Ksh 5.8 million ($43,500) a year earlier, driven by higher financing costs.
However, the brokerage maintained strong liquidity and capital positions. Paid-up capital exceeded regulatory requirements at Ksh50 million ($0.37 million), and total shareholders’ equity stood at Ksh111.18 million ($0.83 million). Co-operative Bank’s capital injection into Kingdom Securities highlights its commitment to supporting subsidiaries during market volatility.
Under CEO Gideon Muriuki’s strategic leadership and Kingdom Securities’ continued resilience, Co-op Bank remains a formidable player in East Africa’s financial sector, well-positioned for future growth.