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NEWS & CURRENT AFFAIRS

The Nairobian

Co-op Bank splashes Sh8.8b dividend as profit hits Sh26b

Business

By Brian Ngugi | Mar 21, 2025

**Co-op Bank MD Gideon Muriuki.** [Courtesy]

Co-operative Bank of Kenya (Co-op Bank) has announced a Sh8.8 billion dividend payout to its shareholders for the year ending December 31, 2024, following a robust increase in net earnings to Sh25.5 billion.

The dividend, set at Sh1.50 per share, maintains the bank's consistent payout strategy, reflecting sustained profitability throughout 2024.

The payout will deliver a substantial cash injection to Co-op Holdings Co-operative Society, the bank's strategic and majority shareholder - representing Kenya's cooperative movement, which stands to receive Sh5.7 billion for its 64.5 per cent stake.

Key Savings and Credit Co-operatives (Saccos), including Harambee, H&M, Kenya Police Sacco, Afya, and Masaku Teachers, are among the significant beneficiaries of the dividend distribution.

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Co-op Bank Group Chief Executive Gideon Muriuki while releasing the lender’s financial performance in Nairobi, yesterday, attributed the bank's earnings growth to increased interest and non-interest income, coupled with effective cost control, which bolstered the lender's bottom line.

The lender reported a profit after tax of Sh25.5 billion, a 9.8 per cent increase from the Sh23.2 billion recorded in 2023.

Total operating income rose by 12.5 per cent to Sh80.6 billion, driven by a 10.1 per cent increase in total non-interest income which hit Sh29.1 billion and a 13.9 per cent surge in net interest income to Sh51.5 billion.

The results received a significant boost from the robust performance of key subsidiaries, notably Kingdom Bank Ltd and Co-op Bancassurance Intermediary Ltd, which both hit the Sh1 billion mark in pretax earnings for the first time.

The bank said the strong performance is in line with the group’s strategic focus on sustainable growth, resilience, and agility. “The strong performance has led to a sustained increase in shareholder value as reflected in the competitive Return on Equity of 19.7 per cent,” said Mr Muriuki.

“The board of directors has recommended a dividend of Sh1.50 per share, subject to approval by the regulators and shareholders.”

Mr Muriuki said the lender continues to pursue strategic initiatives that focus on “resilience and growth in the various economic sectors.”

“This is anchored on a successful universal banking model supported by an innovative digital presence, a wide physical footprint, and the unique synergies in the over 15-million-member co-operative movement that is the largest in Africa,” he said.

Coop Bank has been bucking the industry trend of branch closures by expanding its physical footprint. The bank has opened eight new branches this year, bringing its total to 211, including five in South Sudan.

Mr Muriuki said the bank's commitment to physical presence aligns with its strategy to reach underserved communities and provide accessible financial services.

The expansion has also created 999 new job opportunities for young bankers, bringing the bank's total workforce to 5,863.

“The branch network has expanded to a total of 211 outlets (five in South Sudan). We have planned 15 additional outlets this year with 14 already opened at these locations: Imaara Mall-Mombasa Road-Nairobi, Ugunja in Siaya, Luanda, Isibania, Maai Mahiu, Dagoretti Market, Marimanti, Ruiru Nord Mall, Naromoru, Eldoret Airport Road, Eldama Ravine, Westlands Square Executive Centre, Eastleigh BBS Mall and Rumuruti,” he said.

“The bank continues to invest in a competitive team set to serve existing functions and at the same time tap new growth opportunities across all areas of the business. Staff Numbers have grown from 4,864 as of the close of 2022 to 5,863, creating job opportunities for over 999 young people.”

Co-op Bank is the latest tier-one lender to announce its full-year results after KCB, StanChart, and Stanbic Holdings.

The significant dividend payouts by Co-op Bank, StanChart, KCB and Stanbic signal increased optimism about the economy’s future by banks despite persistent challenges.

Analysts anticipate this trend to continue as other tier-one lenders release their financial results, offering a welcome boost to income-hungry shareholders amidst ongoing economic uncertainty.

A payout boom by the lenders will be a welcome bountiful season for income-hungry shareholders to whom dividends are a vital source of income even as economic uncertainty rages.