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Shareholders smiling to the bank

Saccos smile as lender pays highest dividends since listing

Remarkable results

In Summary

• Profit after tax was Sh12.7 Billion in 2018 compared to Sh11.4 Billion the previous year.

• The lean and frugal business model the bank has applied is helping build resilience against seasonal shocks.

Shareholders of top tier lender Co-operative Bank approved a dividend of Sh1.00 per share during the annual general meeting on Thursday.

This is a 25 per cent boost in dividend pay-out compared to the 80 cents paid out the previous year.

The dividend totals a cash payment of Sh5.9 Billion, the highest payout to shareholders since the listing of the Bank on the Nairobi Securities Exchange in December 2008.

 

The biggest beneficiaries will be longstanding shareholders especially the lender's majority shareholder Co-op Holdings Co-operative Society, which will earn Sh3.79 Billion.

The Chairman of Co-opholding  Co-operative Society  Macloud Malonza applauded the Co-operative financial system which serves more than 22,000  Saccos.

The Society has a 64.5 per cent stake in Co-operative Bank as a strategic shareholder representing Kenya’s Co-operative Movement. It was formed in 2008 to facilitate the listing of the bank on the bourse. This year’s dividend payment is the highest ever, and matches the entire initial investment by the Co-operative Movement in the Bank thereby enabling them to recoup their investment in full, regarded as ‘Shilling-for-Shilling’ dividend payout. 

The bank posted profit after tax of Sh12.7 Billion in 2018, compared to Sh11.4 Billion in 2017.

The lender attributed its good performance to gains from the Transformation Project under implementation since 2014. It is focused on improving operational efficiency, superior customer service and lowering the bank's operating costs.

The lean and frugal business model the bank has applied is helping build resilience against seasonal shocks, including the rate caps which were introduced in 2016..

The lender's South Sudan unit, a unique Joint Venture (JV) partnership with the government of South Sudan posted a monetary loss of Sh30.78 million last year, attributed to hyperinflation accounting occasioned by currency devaluation of the South Sudanese pound.

The bank is among the five lenders piloting Stawi, a new mobile lending product for micro, small and medium scale enterprises. The mobile-based credit scheme aims at improving access to credit for MSMEs which encounter challenges accessing the formal credit market because of the informal nature of their operations and lack of collateral for secured loans.

The lender has received several local and international awards in the past year, including three awards in the Banker Africa 2018 competition