Co-operative Bank of Kenya has raised its interim dividend by 50 per cent to Sh1.50 per share after the lender’s net profit for the nine months ended September rose 27.2 per cent to Sh27.43 billion.
The net earnings grew from Sh21.56 billion posted in the third quarter ended September 2024 and came on the back of a rise in interest and non-interest income.
The dividend amounts to Sh8.8 billion and marks a rise from Sh5.86 billion paid in a similar period last year when Co-op declared Sh1 per share in what marked its first ever interim payout to shareholders since listing on the Nairobi Securities Exchange in 2008.
The Sh1.50 per share interim dividend will be paid on or about December 4 to the shareholders on the bank’s register at the close of business on November 25, 2026. Investors have also enjoyed a capital gain of 49.5 per cent on the bank’s share since the start of the year.
Top shareholder, Co-op Holdings Co-operative Society Limited, will receive Sh5.68 billion on its 64.56 per cent stake.
Net interest income grew by 12.7 per cent to Sh51.03 billion from Sh45.27 billion posted in the preceding similar period. Non-interest income grew 9.2 per cent to Sh24.14 billion from Sh22.11 billion in the period the lender’s operating income rose 11.6 per cent to Sh75.2 billion.
The lender’s operating expenses increased by 5.3 per cent to Sh39.72 billion as staff costs rose by 12.7 per cent to Sh16.96 billion. The rise was at a slower pace compared with a similar period last year as it cut the provisioning for loan losses by 34.2 per cent to Sh4.84 billion from Sh7.35 billion.
Co-op’s non-performing loans (NPL) ratio improved to 12.9 per cent during the review period from 17.1 per cent in a similar period last year as the stock of NPLs reduced to Sh71.67 billion from Sh78.93 billion.
“We continued to strengthen asset quality through proactive credit management, customer engagement and portfolio monitoring,” said Gideon Muriuki, the managing director at Co-op Bank.
The rise in Co-op’s staff costs was on the back of increasing its branch network to 224 at the end of September this year from 217 in a similar period last year. The higher branch network saw Co-op increase its staff size to 6,630 from 5,826 during this period.
“Staff numbers increased to 6,630, reflecting continued investment in people and operational capacity, creating a total of 804 new jobs since the third quarter of last year,” said Mr Muriuki.
During the review period, Kingdom Bank, which is 90-percent owned by Co-op Bank, saw its net profit rise by 65.4 per cent to Sh872.96 million from Sh527.59 million. This was supported by continued expansion in its retail and business banking segments.
Co-op Bancassurance Intermediary Limited posted a pre-tax profit of Sh1.39 billion from 1.15 billion on the back of an expanding customer base.
Over the nine-month period, Co-operative Bank of South Sudan returned a pre-tax profit of Sh528 million, marking a 5.6 times rise from Sh93.5 million posted in a similar period last year.
Co-op Trust Investment Services Limited contributed Sh966.8 million in pre-tax profit, being a 54.8 per cent rise from Sh624 million as the subsidiary’s funds under management hit Sh508.8 billion from Sh496.4 billion.
Kingdom Securities delivered a pre-tax profit of Sh104.5 million compared to Sh89.9 million in the preceding similar period, representing a 16.2 per cent growth on the back of increased activity in the capital markets.
The review period saw Co-op’s asset base grow by 11.3 per cent to Sh907.44 billion from Sh815.27 billion while customer deposits grew 15.4 per cent to Sh633 billion.
The bank’s loan book closed September at Sh496.88 billion from Sh406.52 billion in a similar period last year, marking a 22.2 per cent jump.
