Increased savings largely by Sacco members targeting higher interests on rebates boosted deposits pushing up Cooperative Bank Group’s net earnings by 9.8 per cent in the year ended December 31, 2024.
Customer deposits grew to Sh506.1 billion, a 12.1 per cent increase from Sh451.6 billion.
The bank’s retail banking model provides access to cash for FOSA operations, enabling 619 FOSA outlets to support over 15 million Savings and Credit Cooperatives (Sacco) members access to banking services even in remote areas.
The Group’s financial statement released Thursday shows that the lender’s profits grew to Sh25.5 billion compared to Sh23.2 billion reported in 2023.
An analysis of financial statements by the top 40 Saccos shows a notable increase in deposits. The majority announced higher interest rates and increased dividend payouts to members, reflecting strong growth and member confidence.
High deposits saw Saccos issuing high dividends and interest rebates of up to 16 and 11 per cent respectively, up from a five-year average of 13 and eight per cent in that order. Co-op Bank Group’s gross earnings for the year rose by 7.5 per cent to Sh34.8 billion compared to Sh32.4 billion recorded in FY2023.
“The strong performance is in line with the Group’s strategic focus on sustainable growth, resilience, and agility, riding on the ‘Soaring Eagle’ transformation agenda,’’ Co-operative Bank Group MD, Gideon Muriuki said.
The board recommended a dividend of Sh1.50 per share, subject to approval by the regulators and shareholders at a virtual general meeting to be held on May 16.
Lending to customers marginally dropped, reflecting an industry trend arising from the impact of strengthening local currency, elevated interest rates and constrained consumer purchasing power.
Net loans and advances for the period dropped to Sh373.7 billion compared to Sh374.2 billion in 2023.
Kingdom Bank, a niche MSME subsidiary of Co-op Bank bought in 2020 after converting from Jamii Bora contributed Sh1.07 billion to the Group’s earnings.
Customer deposits at Absa Group on the other hand increased to Sh367 billion, pushing the lender’s total assets above a half-a-trillion shilling mark.
Financial results for the year ended December 31, 2024, presented to investors in Nairobi show the net earnings rose by 28 per cent to Sh20.9 billion.
“This performance reflects the Bank’s continued commitment to supporting businesses, individuals, and key economic sectors that contribute to Kenya’s economic progress,’’ the Group’s MD and CEO Abdi Mohamed said.
In the period, total revenue grew by 14 per cent to Sh62.3 billion, supported by a strong funded income of Sh46.2 billion and an 11 per cent increase in non-funded income to Sh16.1 billion.
The lender’s performance has resulted in an increase in return on equity to 24.5 per cent, which supports capital distribution to shareholders.
The board has recommended a total dividend of Sh1.75 per ordinary share, amounting to Sh9.5 billion, representing a 13 per cent increase over the previous year.
The bank’s capital and liquidity ratios remain strong with sufficient headroom above the regulatory requirement.
The bank’s total capital adequacy ratio closed at 20.4 per cent and liquidity reserve position at 42.5 per cent against the regulatory limits of 14.5 per cent and 20 per cent, respectively.
