Co-operative Bank Group (Co-op Bank), founded by Kenyan banking entrepreneur Gideon Muriuki, has given a loan of Ksh499 million ($3.75 million) to Kingdom Securities Limited, its stock brokerage arm, in 2023 as part of a strategic strategy to strengthen liquidity and capital reserves.
This loan, mentioned in the group’s financial statements, is part of an ongoing effort to support the subsidiary, underlining its commitment to the financial services sector as it expands.
The loan, which is an increase above the previous year’s advances, demonstrates Co-op Bank’s continuous support for Kingdom Securities. In the previous fiscal year, the subsidiary received Ksh45 million ($0.34 million), increasing the total outstanding loan to Ksh544 million ($4.08 million) as of December 31, 2023.
With relaxed repayment terms, the loan is designed to be repaid in cash after Kingdom Securities meets regulatory compliance and profitability. Notably, the loan remains unsecured, demonstrating Co-op Bank’s belief in the subsidiary’s potential for expansion.
Gideon Muriuki, a prominent participant in Co-op Bank’s recent development attempts, has cemented his place among the Nairobi Securities Exchange’s (NSE) top investors. Muriuki’s interests, which now include a 2% share in Co-op Bank, are worth more than $10 million, increasing his influence in the financial industry.
Muriuki led Co-op Bank to a strong financial performance in 2023, increasing profits by 5.22% to Ksh23.19 billion ($174.69 million). This development trajectory boosted the group’s total assets to Ksh671.13 billion ($5.05 billion), a 9.53 percent rise over the previous fiscal year.
In FY 2023, Kingdom Securities Ltd., a subsidiary of Co-operative Bank Group, displayed resilience in the face of economic headwind. Profit after tax fell to Ksh 2.99 million ($22,500) from Ksh 5.8 million ($43,500) the year before, owing to increasing borrowing costs.
Nonetheless, the firm maintained robust liquidity and capital levels. Paid-up capital exceeded regulatory limits by Ksh50 million ($0.37 million), with total shareholders’ equity at Ksh111.18 million ($0.83 million). The capital infusion by Co-operative Bank into Kingdom Securities demonstrates the bank’s commitment to helping subsidiaries during market instability.
Under CEO Gideon Muriuki’s strategic direction and Kingdom Securities’ ongoing resiliency, Co-op Bank is a competitive participant in East Africa’s financial industry, well-positioned for future expansion.