Subsidiaries of the Co-operative Bank of Kenya played a critical role in the bank’s profit growth in the full year 2023. A spot check on the performance by the subsidiaries shows that the all returned positive performance with profit before tax growths.
Co-op Consultancy & Bancassurance Intermediary Ltd posted a profit before tax of Sh. 877.1 million in full year ended December 2023, riding on strong penetration of the bancassurance business by the lender.
At the same time, Co-operative Bank of South Sudan that is a unique joint venture (JV) partnership with Government of South Sudan made a profit before tax of Sh. 291.3 million in the full year under review compared to Sh. 132.7 million in 2022, a 119.5 per cent growth Co-op Bank holds a 51 per cent stake and the government of South Sudan holds a 49 per cent stake.
Co-op Trust Investment Services Ltd contributed Sh. 226 million profit before tax in the period. This was equivalent to an 8.6 per cent growth. The subsidiary now has funds under management totaling Sh. 218.4 billion.
Kingdom Bank Limited, which is a niche micro small and medium enterprises bank, contributed a profit before tax of Sh. 1.08 billion in in the same period. This translated into a remarkable growth of 36.4 per cent from Sh. 792.6 million that was reported in the full year 2022.
The performances by Co-op Bank subsidiaries coupled with the bank’s main performance culminated in a growth that saw Co-op Bank record Sh. 23.2 billion net profit for the full year ended December 2023.
This was a 5.2 per cent growth from the Sh. 22 billion net profit that was posted in a similar period the previous year. This performance enhanced the bank’s position as Kenya’s third most profitable bank and one of the most successful and sustainable lenders in Kenya’s banking sector.
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This profit growth was also fueled by increased income and reduced operating costs. In addition to this, Co-op Bank’s asset base grew 10.5 per cent to Sh. 671 billion while customer deposits grew 6.6 per cent to Sh. 451.6 billion.
“The strong performance has led to a sustained increase in shareholder value as reflected in the competitive return on equity of 21 percent,” Co-op Bank’s chief executive officer Dr. Gideon Muriuki said.
“The Co-operative Bank Group continues to pursue strategic initiatives that focus on resilience and growth in the various economic sectors.”
Following the profit growth, the lender announced that it would pay a dividend at a rate of Sh. 1.5 per share. This would see the bank payout Sh. 8 billion in dividend.