Shareholders of Co-operative Bank (Co-op Bank) received positive news as the bank reported a 7% increase in net earnings for the first half of the year. The bank, which will soon be included in the Morgan Stanley Capital International (MSCI) index, announced a net profit of Sh13 billion, up from Sh12.1 billion during the same period last year.
As a result of this strong performance, the shareholders’ equity rose by nearly Sh12 billion to reach Sh126.7 billion, fueled by significant growth in retained earnings, which totaled Sh15.1 billion. According to Co-op Bank Group Managing Director Gideon Muriuki, the bank’s robust performance aligns with the Group’s strategy of focusing on sustainable growth, resilience, and agility, resulting in a Return on Equity of 22.1%.
On Wednesday, Co-op Bank, Kenya’s fourth-largest bank by assets, joined other major Kenyan companies like Safaricom, KCB Group, Equity Group, and East African Breweries on the MSCI index. MSCI Inc., known for providing global investment tools, periodically updates its indices in February, May, August, and November, adjusting the companies and their weightings accordingly.
This upgrade follows MSCI’s August 2024 review, which came after Co-op Bank’s stock gained 10.1% on the Nairobi Securities Exchange (NSE). Currently, Safaricom holds the largest weight in the MSCI Kenya Index at 48.2%, followed by Equity, KCB Group, and EABL with 28.9%, 17.3%, and 5.7% respectively. The MSCI is known for indices such as the Frontier Markets Index, Emerging Markets Index, and All Country World Index, with Kenya being part of the Frontier Markets Index that includes 213 companies from 28 countries.
Co-op Bank’s gross profit for the period increased by 10.8% to Sh18.2 billion, up from Sh16.4 billion in the same period last year. The bank’s total assets grew by 7.8% to Sh716.9 billion, compared to Sh664.9 billion in the same period last year. Net loans and advances rose by 2.8% to Sh375.6 billion, while customer deposits saw a 9.4% increase, reaching Sh507.4 billion.
The bank’s total operating income increased by 10.9%, from Sh35.4 billion to Sh39.2 billion. Total non-interest income grew by 11.2%, from Sh13.8 billion to Sh15.4 billion, while net interest income rose by 10.7%, from Sh21.5 billion to Sh23.9 billion. However, total operating expenses also increased by 11.1%, from Sh19.1 billion to Sh21.3 billion.
The Mco-op Cash mobile wallet significantly contributed to non-funded income streams, with Sh36.4 billion in loans disbursed in the first half of 2024, averaging Sh6.1 billion per month.
Additionally, the bank’s subsidiary, Kingdom Bank Limited, contributed Sh635.5 million to the gross profits, marking a 21.8% increase from Sh521.9 million in the same period last year. Co-operative Bank of South Sudan, a joint venture with the Government of South Sudan, contributed Sh264.3 million to the group’s profits, though this was offset by a Sh252.4 million loss due to hyperinflation and currency devaluation of the South Sudan Pound.
Other contributions to the group’s earnings included Sh142.7 million from Co-op Trust Investment and Sh682.7 million from Co-op Bancassurance.
