Kenyan tycoon Gideon Muriuki’s Co-op Bank reports 7-percent profit increase

Oluwatosin Racheal Alabi -

Key Points:

  • Co-op Bank’s net profit rose by 7 percent to Sh12.99 billion ($100 million) in the first half of 2024, caused by income growth.
  • The bank expanded its branch network by adding eight new branches and increased its workforce by 317 employees.
  • Subsidiaries like Kingdom Bank and Co-op Consultancy contributed to the overall performance despite challenges like higher tax liabilities.

Co-operative Bank of Kenya, led by Managing Director Gideon Muriuki, reported a seven-percent increase in net profit, reaching Sh12.99 billion ($100 million) for the half year ending June 2024. The growth stemmed from a rise in both interest and non-interest income.

Net interest income jumped by 10.7-percent to Sh23.9 billion ($185 million), while non-interest income increased by 11.2 percent to Sh15.4 billion ($119 million).

Expansion and subsidiaries increased Co-op Bank’s stellar performance

The bank achieved a return on equity of 22.1 percent. However, operating expenses also grew by 11 percent to Sh21.3 billion ($165 million). This rise was due to higher provisioning for loan losses and increased staff costs.

Staff costs, which rose by 14.8 percent to Sh9.1 billion ($70 million) reflected pay raises and the hiring of additional employees as the bank expanded its branch network.

During this period, Co-op Bank added 317 employees, bringing its workforce to 5,426. The bank opened eight new branches, increasing its total to 199. New branches were launched in Nairobi, Siaya, and Vihiga, with plans to open 15 more by the end of 2024.

Subsidiaries also contributed to the bank’s performance. Kingdom Bank, 90-percent owned by Co-op Bank, saw its net profit decrease to Sh444.9 million ($3.5 billion) due to higher tax liabilities, despite a rise in pre-tax earnings. Co-op Consultancy & Bancassurance Intermediary Limited, Co-op Bank of South Sudan, and Co-op Trust Investment Services Limited all reported solid pre-tax profits.

Co-op Bank’s asset base expanded by 7.8 percent to Sh716.9 billion ($5.5 billion). Customer deposits grew by 9.4 percent to Sh507.4 billion ($3.9 billion), for the lender. Additionally, the MSCI frontier markets index recently added Co-op Bank, increasing its visibility to global investors.