Co-operative Bank of Kenya has reported robust financial results for the first quarter of 2025, highlighting significant growth in key financial metrics despite a challenging economic environment. The bank posted a pre-tax profit of Kshs 9.63 billion, representing a 6.8% increase compared to the same period in 2024. The after-tax profit stood at Kshs 6.9 billion, reflecting a 5.3% rise year-on-year.
The financial report, released this week, underscores Co-operative Bank’s steady performance amid economic uncertainties. The bank attributed its strong performance to strategic cost management, increased customer deposits, and aggressive expansion in digital banking.
Strong Asset Base and Customer Deposits Growth
Co-operative Bank’s total assets rose by 8.3% to Kshs 774.1 billion, up from Kshs 715.2 billion in Q1 2024. The increase was driven by a surge in customer deposits, which grew by 9% to Kshs 525.2 billion. This growth is a testament to the bank’s ability to attract and retain depositors amidst a competitive banking landscape.
The bank’s deposit mobilization strategy, which includes tailored savings products and targeted customer acquisition campaigns, played a crucial role in the deposit growth. Co-operative Bank continues to leverage its extensive branch network and digital platforms to expand its reach, particularly in underserved areas.
Digital Channels Drive Transaction Volume
Digital banking remains a key pillar of Co-operative Bank’s operations. The bank disclosed that over 90% of its transactions in Q1 2025 were processed through digital channels, reflecting a growing shift in customer behavior towards mobile and internet banking solutions.
The Mco-op Cash mobile platform disbursed Kshs 19.1 billion in loans during the quarter, underscoring its growing importance as a key lending platform. The platform has become instrumental in extending quick and accessible credit to retail customers and small businesses.
The bank has also invested in enhancing its digital infrastructure, aiming to streamline transaction processing, reduce costs, and improve customer experience. Co-operative Bank’s digital transformation strategy includes expanding mobile banking services, upgrading its internet banking platform, and introducing more self-service options for customers.
Revenue Streams and Operating Income
Co-operative Bank recorded a 12.8% increase in operating income, which rose to Kshs 21.2 billion. The growth was primarily driven by a 21.7% surge in net interest income, which now stands at Kshs 16.5 billion. The increase in net interest income was supported by higher lending volumes, strategic pricing of loans, and effective management of interest-bearing liabilities.
Despite the positive performance in net interest income, the bank noted a slight decline in non-interest income. This decline was attributed to a reduction in transaction fees and commissions as customers increasingly transitioned to low-cost digital channels.
Cost Management and Efficiency
Co-operative Bank maintained a strong cost-to-income ratio of 45.5% in Q1 2025, aligning with its strategic focus on cost efficiency. The bank achieved this through stringent cost control measures, investment in cost-saving technologies, and optimization of branch operations.
The bank’s ongoing efforts to rationalize its branch network have also contributed to its cost management strategy. As of Q1 2025, Co-operative Bank operates 212 branches across Kenya, with plans to further expand in key strategic areas.
Subsidiaries’ Performance
Subsidiaries under the Co-operative Bank Group made notable contributions to the overall performance in Q1 2025. Kingdom Bank, a fully owned subsidiary, reported steady growth in customer deposits and loan disbursements, driven by targeted lending to SMEs and micro-enterprises.
Co-op Trust Investment Services also recorded increased revenue from fund management and asset management services. The subsidiary has continued to attract new clients, particularly in the corporate and institutional investor segments.
Outlook for the Remainder of 2025
Looking ahead, Co-operative Bank plans to maintain its growth trajectory by focusing on digital transformation, asset quality management, and targeted lending to high-growth sectors. The bank is also set to roll out new digital products and services aimed at enhancing customer convenience and driving transaction volumes.
As the economic environment remains uncertain, Co-operative Bank has reaffirmed its commitment to prudent risk management and maintaining a strong capital position. The bank is also exploring strategic partnerships aimed at expanding its reach in regional markets and enhancing its service offerings.
With its strong Q1 2025 performance, Co-operative Bank is well-positioned to navigate the rest of the year, capitalizing on emerging opportunities in digital banking, SME lending, and asset management.