Co-operative Bank of Kenya’s stock took a sharp 8.5% dip on Tuesday, April 29, closing at Ksh14.45. This marked the bank’s lowest price so far in 2025.
The drop came just a day after the lender closed its books for dividend qualification on Monday, April 28.
Investors often sell shares right after a company’s dividend record date because they have already qualified for the payout, which may cause a temporary dip in shares.
However, a falling share price does not always mean investors are dumping the stock out of fear or frustration.
The bank’s stock is now trading at an attractive dividend yield of 10.2% and has potential value for long-term income investors despite the day’s decline.
Also Read: Co-operative Bank Slashes Interest on Loans with Immediate Effect
Co-operative Bank Maintains Ksh1.50 Dividend
The bank has held its dividend steady at Ksh1.50 per share after reporting a 9.8% increase in net profit for the year ending December.
Moreover, the lender posted a profit of Ksh25.4 billion, up from Ksh23.1 billion the previous year. The total dividend payout will amount to Ksh8.8 billion and is set to be paid on June 10 to shareholders listed by April 28.
Additionally, Co-op Bank’s net interest income rose by 13.9% to Ksh51.52 billion, up from Ksh45.23 billion, driven by higher lending margins and better returns from government securities.
Managing Director Gideon Muriuki credited the bank’s strong performance for boosting shareholder value while speaking at a past investor briefing.
“The strong performance has led to a sustained increase in shareholder value as reflected in the competitive return on equity of 19.7 percent,” said the Managing Director Gideon Muriuki.
Furthermore, the biggest shareholder, Co-op Holdings Co-operative Society Limited which owns 64.56% of the bank, will receive a payout of Ksh5.68 billion.
The society is owned by several Saccos, including Harambee, Kenya Police, Afya, and Kipsigis Teachers.
Also Read: Billions KCB, Co-operative, Equity & Other Top Kenyan Banks Made in 2024
The Banks Performance
The bank’s operating expenses increased by 17.7% to Ksh46.69 billion, driven largely by a 44.2% increase in loan loss provisions from Ksh6 billion to Ksh8.66 billion, amid a rise in non-performing loans, which increased 6.1% to Ksh71 billion.
Additionally, staff costs grew by 9.8% to Ksh18.32 billion, attributed to an expanded workforce and branch network.
The bank added 17 new branches across Co-op Bank, Kingdom Bank, and Co-operative Bank of South Sudan, bringing the total to 211 branches. On the other hand, employee numbers grew by 463 to 5,863.
On subsidiary performance, Kingdom Bank, which is 90% owned by Co-op Bank, posted a net profit of Kshh548.9 million, down from Ksh655 million, because of a higher tax burden.
Also, Co-op Consultancy and Bancassurance Intermediary reported a pre-tax profit of Ksh1.2 billion, up from Ksh877.1 million while Co-operative Bank of South Sudan recorded a pre-tax profit of Ksh11.1 million.
Co-op Trust Investment Services more than doubled its pre-tax profit to Ksh386.4 million from Ksh226 million, while its assets under management increased by 74.4% to Ksh381 billion.
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