Co-operative Bank of Kenya reported a strong 7.7% rise in after-tax profit to KES 6.58 billion for the first quarter of 2024, driven by higher interest income and continued efficiency gains.
The lender’s pre-tax profit increased by 10.6% year-over-year to KES 9.01 billion, according to results released on Wednesday. The performance underscores the bank’s resilience and strategic focus on sustainable growth amid challenging economic conditions.
“The strong performance by the bank is in line with the group’s strategic focus on sustainable growth, resilience and agility,” said Dr. Gideon Muriuki, Group Managing Director and CEO.
Net interest income climbed 8.6% to KES 11.7 billion, benefiting from loan book expansion and improved asset yields. Customer deposits surged 14.8% to KES 481.8 billion, bolstering the bank’s liquidity position.
The bank’s cost-to-income ratio, a key profitability metric, improved substantially to 44.1% in Q1 2024 from 59% in the 2014 fiscal year when it embarked on an efficiency drive.
“The group reports excellent efficiency gains from the various initiatives to record a cost-to-income ratio of 44.1% in Q1 2024,” Muriuki stated.
Co-operative Bank has made significant investments in digital capabilities, moving over 93% of customer transactions to alternative delivery channels such as mobile and internet banking. Its new core banking system is expected to “further enhance service excellence and provide innovative and advanced banking solutions.”
The lender’s subsidiaries, including the Co-operative Bank of South Sudan and Kingdom Bank, a niche MSME-focused subsidiary, also contributed to the group’s profitability.
The bank, which has ambitious expansion plans, aims to open 15 new branches this year, capitalizing on emerging opportunities across various economic sectors.
With its extensive reach, strong digital focus, and commitment to sustainability and financial inclusion, Co-operative Bank appears well-positioned to navigate the evolving landscape and deliver long-term value to its stakeholders.
