Co-operative Bank has reported a solid set of results for FY’2025, underpinned by strong revenue growth and balance sheet expansion, despite rising operating costs. The bank’s Profit After Tax (PAT) rose by 16.9% to Kshs 29.8 bn, up from Kshs 25.5 bn in FY’2024, reflecting improved core earnings performance.
This growth was largely driven by a 13.9% increase in total operating income, which reached Kshs 91.9 bn from Kshs 80.6 bn a year earlier. Net Interest Income (NII) was the standout contributor, climbing 22.0% to Kshs 62.9 bn, supported by growth in interest-earning assets and improved margins. However, Non-Funded Income (NFI) slightly declined by 0.3% to Kshs 29.0 bn, indicating some pressure on fee-based revenue streams.
On the cost side, total operating expenses rose by 11.4% to Kshs 52.0 bn, compared to Kshs 46.7 bn in FY’2024. This increase was primarily driven by a 13.6% rise in staff costs, which reached Kshs 20.8 bn. While the higher costs weighed on overall profitability, the bank still managed to deliver positive earnings growth, highlighting operational resilience.
Profit Before Tax (PBT) increased by 15.8% to Kshs 40.3 bn, further underscoring the bank’s strong core performance. Efficiency metrics showed mixed trends, with the cost-to-income ratio improving slightly when excluding loan loss provisions, though staff costs as a proportion of operating expenses edged higher.
The bank’s balance sheet expanded significantly during the period, with total assets growing by 11.3% to Kshs 827.4 bn. This growth was driven by a 12.6% increase in both net loans and government securities, which stood at Kshs 421.0 bn and Kshs 244.9 bn respectively. Customer deposits also recorded robust growth, rising by 13.4% to Kshs 574.2 bn, reflecting continued customer confidence and a strong funding base.
Asset quality showed improvement, with the gross non-performing loans ratio declining from 17.0% to 15.7%. Meanwhile, profitability ratios remained stable, with return on average assets at 3.8% and return on average equity at 19.1%.
In line with its strong performance, the board recommended a total dividend of Kshs 2.50 per share for FY’2025, comprising a final dividend of Kshs 1.50 and an interim dividend of Kshs 1.00. This represents a notable increase from the previous year and translates to a dividend yield of 8.3% and a payout ratio of 49.3%.
Overall, Co-operative Bank’s FY’2025 results highlight a well-balanced performance, characterized by strong income growth, prudent balance sheet expansion, and sustained shareholder returns, even amid rising operational costs.
