Profits surge at Co-operative Bank of Kenya

The Co-operative Bank of Kenya expects a 20 percent rise in pretax profits this year, after the bank posted a strong growth in 2015, in part due to staff cuts, the company’s chief executive said on Thursday,

Pretax profit in the year ending December jumped 40.8 percent to 15.38 billion shillings ($151.75 million).

“Many of the gains we started last year, we will see more of those gains this year,” Chief Executive Gideon Muriuki said at a results presentation in Nairobi.

Muriuki said the bank had in 2015 reduced staff count by more than 400, after global consultancy McKinsey helped implement a restructuring programme at the bank. Previously the bank said it expected staff count to be cut by about 10 percent.

Co-op’s earnings were also driven higher by a 9 percent rise in net interest income to 23.20 billion shillings.

It plans to expand to other countries in the region like Uganda, Tanzania, Rwanda and Ethiopia, via joint ventures with co-operatives. Muriuki said the bank remains profitable in South Sudan, where it has a joint venture with the government, despite unrest and an acute dollar shortage.

Earnings per share last year rose 36.6 percent to 2.31 shillings and the bank said it would raise the dividend to 0.80 shillings per share, from 0.50 shilling per share in the previous year.