Co-op Bank pegs growth on expansion

The Co-operative Bank of Kenya is betting on its expansion locally and regionally to lift its performance further this financial year.

However, during the period ended December 2009, the bank’s pre-tax profit rose by 12 per cent from Sh3.3 billion to Sh3.7 billion resulting from earnings on increased lending.

Loans and advances to customers went up by 18 per cent from Sh52.9 billion to Sh62.2 billion.

The bank on Thursday said this was supported by diversified product lines and a competitive pricing mechanism.

Consequently, Co-op Bank earned Sh7.4 billion as interest on loans and advances, up from Sh5.8 billion it posted the previous year.

The board of directors has proposed 20 cents a share dividend. In 2008, the bank paid out 10 cents a share.

Managing director Gideon Muriuki said that regional expansion is part of the bank’s strategies to grow its income lines to sustain growth.

He said that Co-operative Bank of Southern Sudan was in the process of getting registered.

Key investment

Co-op Bank holds 70 per cent of the bank while the Government of Southern Sudan controls the remaining 30 per cent on behalf of the Southern Sudan co-operative movement.

“Given the business initiatives in place and key investment in people as a key resource, we project even better performance in 2010,” Mr Muriuki told reporters in Nairobi.

The bank opened 27 new branches during the year, bringing its total network to 79.

As a result, it now boasts of 1.2 million customers compared to 700,000 a year ago.

He said its stockbrokerage firm, Kingdom Securities, is expected to make fair contribution to the group’s performance.

Mr Muriuki said Co-op Bank supports coffee through Kenya Co-operative Coffee Exporters and expects to benefit from this venture by earning foreign and commission income.