The Co-operative Bank of Kenya has deepened its institutional partnership with the country’s cooperative movement, having onboarded an additional 135 savings and credit cooperatives (Saccos) onto its financial infrastructure in the year ending December 2024.
This brings the total number of saccos integrated into its Front Office Services Activity (FOSA) platform to 619, up from 484 previously.
This expansion indicates the bank’s strategic commitment to enhancing financial inclusivity and operational synergy with Saccos, entities that simultaneously serve as the bank’s primary shareholders and a crucial customer segment.
Through the Sacco-Link and FOSA framework, Sacco members now enjoy seamless access to banking services including ATM withdrawals, salary processing, mobile banking, and point-of-sale (POS) transactions.
Co-op Bank has invested in a proprietary Sacco Link Switch that allows full system interoperability with participating saccos, thus enabling real-time access to the bank’s digital and physical service channels.
“In this collaborative model, Co-op Bank provides wholesale banking solutions to co-operative societies, which in turn deliver retail financial services to their members using advanced technological tools,” the lender said in a disclosure.
The intensifying engagement with saccos comes at a time when rival banks are also moving to capture this strategic segment by offering robust digital platforms, expansive branch networks, and advanced risk mitigation capabilities.
As majority stakeholders in the bank through Co-opholdings Co-operative Society Limited, saccos such as Harambee, Kenya Police, Afya, Kipsigis, Kwetu, and Telepost collectively own a 64.6 percent equity stake in the lender.
These institutions stand to benefit from a dividend payout of Ksh 5.68 billion in June, after the bank maintained its dividend per share at Ksh1.50 for the financial year ended December 2024.
This dividend decision follows a solid financial performance, with Co-op Bank registering a 9.8 percent year-on-year increase in net earnings to Ksh25.4 billion.
This performance was buoyed by a 13.9 percent rise in net interest income to Ksh51.52 billion, propelled by favorable lending spreads and enhanced returns from government securities.
The bank also recorded a 10 percent uptick in non-interest revenue, totalling Ksh29.12 billion, which elevated total operating income to Ksh80.65 billion.
However, the cost base rose by 17.7 percent to Ksh46.69 billion, reflecting increased provisioning for bad debts up 44.2 percent to Ksh 8.66 billion and higher personnel expenses, which reached Ksh 18.32 billion, up 9.8 percent from the previous period.
Co-op Bank’s deliberate expansion within the Sacco ecosystem reinforces its identity as a cooperative-centric financial institution, uniquely positioned to capture value through aligned interests and shared economic objectives.
