Co-op Bank Stock: The Co-operative Bank is Kenya’s third largest bank by profitability and the number of branches after KCB and Equity. The Bank was initially registered under the Co-operative Societies Act at the point of its founding in 1966. It was incorporated as a limited company in 2008 paving the way for its listing in the stock market in the same year.
Co-operative societies and unions own 64.5 per cent of the bank through Coop Holdings Co-operative Society Limited. It is best known as the bank where Co-operative societies, saccos and chamas feel at home in terms of value proposition. On top of that, the banks key customer segments include retail, business, government corporate and institutional banking. They also offer Leasing, stock brokerage, insurance, consultancy and capacity building for mostly our Saccos, and fund management, where we continue driving fund management of about Sh. 120 billion.
The bank has over 8.8 million customers with over 4. 4 million customers on the digital platform, MCoop Cash. They have over 16,500 Kenyans living in the diaspora as their clients.
The bank in partnership with various Saccos offers retail banking and related products through front-office service points (FOSAs) located at Sacco’s premises and to date 175 licensed Saccos have over 479 FOSA branches in operation. To date, over 164 SACCOs are enlisted in this partnership and over 1.18 million ATM cards have been issued to co-operative members. They also have the Coop kwa Jirani agents with over 17,000 agents, internet banking customers who continue to grow.
Co-operative Bank is the risk averse bank among the top 3 Kenyan banks.
The Story So far
In 1966 the bank was established and it opened doors in 1968. In 1994 converts into a full-fledged commercial bank to bank other customers beyond co – operatives including personal, corporate and institutional.
1998 the bank’s headquarters was hit by a terror attack that was aimed at the adjacent US Embassy. Its operations were moved to various hired premises.
In 2000, the bank made a huge loss of Sh. 2.3 billion. In 2003 the bank re-occupied the renovated Co-operative Bank house. In 2004, the bank returns to profitability, making a Sh. 103 million profit.
In 2005, The company doubled its share capital from Sh. 1.2 Billion to Sh. 2.3 billion through share capital injection of Sh. 1.1 Billion. In 2007, it recorded a complete turnaround by reporting a Sh. 2.3 billion profit.
In 2008, the bank was listed at the Nairobi securities exchange. Between 2009-2013, the bank underwent its most rapid expansion by opening 77 branches. Customer accounts grow from 700,000 at the close of 2008 to 5 . 1 million at the end of 2014.
2014-2015 the bank embarked on a bold ‘Soaring Eagle’ Transformation Agenda to scale greater frontiers riding on over 6 . 1 Million account holders. 2016 The Group registered continued growth with profit before tax of Sh. 17.7 billion and an asset base of over Sh. 351.8 billion
2017 The bank’s profitability drops to Sh. 16.4 billion on the backdrop of the interest rate cap introduced in September, 2016. 2018 the bank’s profitability soars to Sh. 18.16 billion, an 11 per cent growth from the previous year.
2019, the bank made a record profit before tax of Sh. 20.71 billion. It disbursed Sh. 43 billion on its MCoop Cash platform as mobile loans. 2020 It acquired Jamii Bora Bank Ltd. Note that Jamii Bora has been renamed to Kingdown bank and is a fully fledged commercial. It has over 444,000 customers and 17 branches. The acquisition also offers the bank an opportunity to cross sell and to deepen their product offering by creating a niche Bank for MSMEs.
Coop Bank doesn’t fit into the definition of companies listed at the NSE with hypnotized retail investors such as Equity, KCB & Centum but it is a good defensive counter. On top of that, it has a dividend yield of between 8 per cent to 10 per cent at the current price.
The company owns Kingdom Securities & has a joint venture in South Sudan with the government.
In portfolio building & wealth management defensive play is actually the timeless offensive play
On top of Co-op Bank’s resilient model, they have a digital factory from which their digital products are being created. This model is also being used by I&M and Equity bank and helps the banks look at technology with fresh eyes.
Dr. Gideon Muriuki has been the bank’s CEO since 2001. He is the turnaround the bank from a loss-making position in the early 2000s to a profit before tax of Sh. 20.7 billion. He joined the bank in 1999. He owns 2 per cent stake in the group and you want to invest in company where the CEO is walking the talk with their own pocket.