Co-op Bank maintains dividend, profit up to Sh23bn

Co-operative Bank of Kenya has maintained a dividend of Sh1.5 per share for the year ended December when it recorded a 5.2 per cent net profit growth to Sh23.1 billion.

The lender’s net profit in the prior year stood at Sh22 billion.

The dividend, amounting to Sh8.8 billion, will be paid on June 10 to shareholders on record as of April 28.

The bank’s earnings growth was driven by a lower cost base and a slight jump in non-interest income.

Strategic initiatives

“The strong performance has led to a sustained increase in shareholder value as reflected in the competitive return on equity of 21 per cent,” said Gideon Muriuki, the managing director at Co-op Bank yesterday.

“The Co-operative Bank Group continues to pursue strategic initiatives that focus on resilience and growth in the various economic sectors,” he said.

Net interest income declined marginally to Sh45.23 billion as the bank incurred higher interest expenses as it grew customer deposits in a rising interest rate environment.

Customer deposits

Total interest expenses rose 46.9 per cent to Sh23.8 billion as customer deposits expanded by Sh27.8 billion to Sh451.6 billion.

The cost of keeping interest-bearing deposits rose by a larger margin compared to total interest income which grew by Sh7.3 billion to Sh69 billion.

Income from lending to customers increased to Sh44.8 billion from Sh40.4 billion while income from government securities rose to Sh23.1 billion from Sh20.8 billion.

The loan book expanded by Sh34.8 billion to Sh374.2 billion, helping to grow interest income in an environment where banks also benefitted from upward revision of interest rates in line with the Central Bank of Kenya’s tightening of monetary policy.