Co-operative Bank dividend up 25pc as profit increases
- Co-op Bank's full year net profit grew by 11.6 percent to Sh12.7 billion.
- Group chief executive Gideon Muriuki hailed the performance as impressive.
- Shareholders are set for Sh1 per share, up from Sh0.80.
The Co-operative Bank Group has increased dividend payout by 25 percent to Sh5.86 billion as full year net profit grew by 11.6 percent to Sh12.7 billion.
Shareholders are set for Sh1 per share, up from Sh0.80, with the group’s earnings for the year ended December 2018 supported by growth in interest income and prudent cost management.
The profit is an improvement from previous year’s Sh11.4 billion. This keeps the bank in tune with four other tier one lenders that have also booked growth in earnings despite base lending rate having been lowered twice during the review period.
Group chief executive Gideon Muriuki hailed the performance as impressive, adding that focus on serving customers in digital age has re-tooled and equipped the business with added competitive edge.
“Our operating model has equipped the business with added resilience to achieve the set strategic objectives, as reflected in the commendable performance in the period under review,” said Mr Muruiki.
The bank becomes the fourth lender to post growth in profit after KCB Group, Stanbic Plc, Barclays Bank of Kenya and Diamond Trust Bank.
During the period under review, total interest income grew by 6.6 percent to Sh43 billion. This was supported by 3.1 percent growth in interest income from loans and advances to Sh32.9 billion and a further 19.2 percent growth in interest income from government securities to Sh9.8 billion.
Its joint venture in South Sudan where it owns 51 percent stake saw pre-tax profit rise nearly five times to South Sudanese pounds (SSP) 897.3 million. This performance however translated to a monetary loss of Sh30.78 million due to devaluation of SSP.
While the group’s loans and advances to customers declined by 3.3 percent to Sh245.4 billion, investment in government securities grew by 16 percent to Sh80.27 billion compared to Sh69.24 billion in the previous year.
Total interest expense remained relatively flat, falling from Sh12.27 billion to Sh12.24 billion. This was despite a seven per cent growth in customer deposits to Sh306.1 billion indicating improved management of the cost of funds.
Non-interest income dropped to Sh12.9 billion from Sh13.5 billion due to a fall in interest on fees and commissions. Operating expenses increased by 1.5 percent to Sh25.6 billion as loan loss provision shrunk by almost half.