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Co-op Bank links 619 saccos to front office services
Co-operative Bank of Kenya branch along Parliament Road, Nairobi. The Co-operative Bank of Kenya had linked 619 saccos with front office services activity (FOSA) in the year ended December 2024.
The Co-operative Bank of Kenya has linked an additional 135 savings and credit co-operatives (saccos) to its banking platform, expanding the commercial ties it has with the thrift institutions, which are both a key shareholder and client base for the Nairobi Securities Exchange-listed firm.
The lender says it had linked 619 saccos with front office services activity (FOSA) in the year ended December 2024, up from 484 a year earlier. Sacco members with FOSA accounts are able to access additional financial services, including withdrawing cash at ATMs and receiving salaries.
“Through Sacco-Link and FOSA partnerships, we support 619 Sacco FOSA branches, providing Co-operative members with access to a wide range of banking services, including ATMs, mobile banking, and POS [point of sale] services,” Co-op Bank said in a statement.
The bank said it has invested in the Sacco Link Switch, which has integrated its system with those of saccos, giving the institutions access to ATMs, mobile banking, point of sale (POS) channels and internet banking.
“In this partnership, we offer wholesale banking services to co-operative societies who then provide to their members retail services complete with full technological capabilities,” Co-op Bank added.
The signing of more saccos deepens their commercial linkages at a time when other banks are also keen to recruit the thrift institutions to grow their deposits, lending and transactions activity.
Banks are leveraging their technology, branch networks and risk management tools in their quest to expand their business with saccos.
Co-op Bank is majority owned by saccos operating across the country. The saccos, with millions of members, also form a major client base for the bank from which they earn a substantial part of their income in the form of dividends.
Scores of saccos, such as Harambee and Kenya Police, hold a 64.6 percent stake in Co-op Bank through their investment vehicle Co-opholdings Co-operative Society Limited.
Other saccos with an indirect stake in the bank include Afya, Kipsigis, Kwetu and Telepost.
The saccos are set to earn a combined dividend of Sh5.68 billion next month after Co-op Bank declared a payout to shareholders at a rate of Sh1.5 per share for the year ended December 2024, maintaining the distribution from the year before.
The lender, which is intent on growing its market share in the Kenyan market, posted a 9.8 percent growth in net profit to Sh25.4 billion in the review period on the back of higher interest income.
Net interest income grew by 13.9 percent to Sh51.52 billion from Sh45.23 billion, driven by higher lending margins as well as increased investment in government securities whose returns rose significantly last year.
Non-interest income grew by 10 percent to Sh29.12 billion, helping to lift total operating income to Sh80.65 billion from Sh71.69 billion.
Co-op Bank’s operating expenses increased by 17.7 percent to Sh46.69 billion as it stepped up provisions for loan losses by 44.2 percent to Sh8.66 billion from Sh6 billion and staff costs rose by 9.8 percent to Sh18.32 billion.
