Co-operative Bank of Kenya, led by Managing Director Gideon Muriuki, announced a 7% increase in net profit to Sh12.99 billion ($100 million) for the half-year ending June 2024. Growth was driven by increases in both interest and non-interest income.
Net interest income increased by 10.7 percent to Sh23.9 billion ($185 million), while non-interest income rose by 11.2% to Sh15.4 billion ($119 million).
The bank achieved a 22.1% return on equity. However, operating expenses increased by 11% to Sh21.3 billion ($165 million). Higher provisioning for loan losses and greater staff costs contributed to this increase.
Staff costs increased by 14.8% to Sh9.1 billion ($70 million), reflecting pay rises and the hire of new personnel as the bank expanded its branch network.
During this time, Co-op Bank added 317 employees, increasing its total staff to 5,426. The bank added eight new branches, bringing the total to 199. New branches have opened in Nairobi, Siaya, and Vihiga, with plans to open 15 more by the end of 2024.
Subsidiaries also improved the bank’s performance. Kingdom Bank, which is 90% owned by Co-op Bank, had its net profit fall to Sh444.9 million ($3.5 billion) due to greater tax liabilities, despite an increase in pre-tax earnings. Co-op Consultancy & Bancassurance Intermediary Limited, Co-op Bank of South Sudan, and Co-op Trust Investment Services Limited all posted strong pre-tax earnings.
Co-op Bank’s asset base increased by 7.8 percent, reaching Sh716.9 billion ($5.5 billion). Customer deposits increased by 9.4 percent to Sh507.4 billion ($3.9 billion), according to the lender. Additionally, Co-op Bank has recently been added to the MSCI frontier markets index, improving its visibility to global investors.