Co-operative Bank of Kenya has kicked off the 2025 financial year on a strong note, reporting a steady rise in earnings and asset growth for the first quarter ended March 31, 2025. The bank’s performance has been significantly buoyed by expanding ties with Savings and Credit Cooperative Societies (Saccos), enhanced digital banking services, and robust loan disbursement through its Mco-op Cash platform.
According to financial results released on Thursday, the Nairobi Securities Exchange-listed lender recorded a net profit of Sh6.9 billion in Q1 2025, representing a 5.3 per cent growth from the Sh6.6 billion posted in the same period last year. This growth is attributed largely to the bank’s strategic initiatives under the Soaring Eagle Transformation Agenda, a forward-looking plan focused on digital innovation and Sacco ecosystem expansion.
Strong Asset and Loan Book Growth
Co-op Bank’s total assets surged by 8.3 per cent to Sh774.1 billion in Q1 2025, up from Sh714.7 billion in the same quarter of 2024. A major contributor to this growth is the lender’s consistent increase in net loans and advances to customers, which rose by 1.7 per cent to Sh384.5 billion, compared to Sh378.1 billion in Q1 2024.
The bank also recorded a significant rise in customer deposits, which grew by nine per cent to Sh525.2 billion, up from Sh481.8 billion in the corresponding quarter last year. This reflects increased trust and uptake of the bank’s services, especially among cooperative societies and their members.
Deepening Sacco Relationships and Rural Banking Access
Co-operative Bank continues to build on its historic foundation within the cooperative movement. During the review period, the bank strengthened its presence in the Sacco segment by linking an additional 135 Saccos to its core banking platform. This expansion brought the total number of Sacco partnerships to 619, solidifying Co-op Bank’s role as the preferred financial partner for cooperative institutions in Kenya.
The growing collaboration with Saccos has played a crucial role in increasing the total asset base supported by the cooperative ecosystem to Sh1.08 trillion as of 2024. Through its Front Office Service Activity (FOSA) integration, the bank now supports over 15 million Sacco members, offering retail banking services even in the most remote parts of the country.
Digital Growth through Mco-op Cash
The bank’s digital platform, Mco-op Cash, continues to drive non-funded income and promote financial inclusion. In the first quarter of 2025 alone, the mobile wallet disbursed Sh19.1 billion in loans, averaging Sh6.37 billion per month. The platform remains a cornerstone of Co-op Bank’s retail banking strategy, particularly for micro, small, and medium-sized enterprises (MSMEs).
Since the launch of its MSME packages in 2018, over 243,000 customers have subscribed, with 67,000 beneficiaries receiving business management training, a move aimed at enhancing financial literacy and business sustainability across Kenya.
Income Growth and Improved Efficiency
Co-op Bank’s total operating income grew by 12.8 per cent, rising from Sh18.8 billion in Q1 2024 to Sh21.2 billion in Q1 2025. This was largely driven by a notable increase in net interest income, which jumped by 21.7 per cent to Sh14.2 billion, up from Sh11.7 billion.
However, non-interest income dipped slightly, recording a 1.9 per cent decline from Sh7.1 billion to Sh6.9 billion. Despite this, the bank still reported healthy gross earnings of Sh9.63 billion, marking a 6.8 per cent increase compared to Sh9 billion in the same period last year.
Notably, Co-op Bank made strides in improving its operational efficiency, reducing its Cost-to-Income Ratio to 45.5 per cent in Q1 2025, down from 59 per cent in the full year 2024. CEO Gideon Muriuki attributed this improvement to various internal efficiency initiatives, including advanced digital integration and prudent cost management.
Tech-Driven Synergy with Infosys Core Banking System
To support its ambitious digital agenda, the Group continues to leverage the latest version of the Finale core banking system from Infosys, one of the most reputable providers globally. This technological backbone enables real-time service delivery and efficient integration with partner institutions, especially within the cooperative and MSME segments.
Solid Subsidiary Performance
The Group’s diversified business model has also contributed to its solid financial performance. Its subsidiaries posted positive results, further boosting the Group’s consolidated earnings:
- Kingdom Bank, the Group’s niche MSME-focused subsidiary, posted a profit before tax of Sh224.7 million.
- Co-op Bancassurance Intermediary Ltd, the Group’s insurance wing, delivered a pre-tax profit of Sh402.1 million, supported by strong uptake of bancassurance products.
- Kingdom Securities Limited, the bank’s investment and stock brokerage arm, contributed Sh41.8 million in profit before tax.
In South Sudan, Co-operative Bank of South Sudan, a joint venture with the South Sudanese government (Co-op Bank 51%, GOSS 49%), posted a profit before tax of Sh80.7 million. However, the profit was restated to reflect inflation and exchange rate pressures in the country, resulting in an adjusted loss of Sh47 million.
Shareholders’ Funds and Retained Earnings Surge
The bank also reported a robust growth in shareholders’ equity, which rose by 22.7 per cent to Sh155.9 billion, up from Sh127.1 billion in Q1 2024. This was primarily driven by retained earnings amounting to Sh16.7 billion, highlighting the bank’s strong internal capital generation and prudent dividend policy.
Outlook: Sustained Growth Anchored in Sacco and MSME Ecosystems
Looking ahead, Co-operative Bank is expected to continue its growth trajectory, with a clear focus on deepening its Sacco linkages and expanding digital lending. Its strategy of empowering MSMEs and rural populations through tailored financial services aligns with the broader national goals of inclusive economic growth and financial deepening.
As Kenya’s banking sector continues to evolve, Co-operative Bank’s hybrid model of technology-driven growth and cooperative-based financial inclusion stands out as a resilient and scalable model in a competitive market.