Co-operative Bank branch along Haile Selassie Avenue, Nairobi. FILE PHOTO | NMG
Co-operative Bank has injected an additional Sh372 million into its South Sudan subsidiary, the first major capital investment in five years.
Last year’s extra investment was made during a period Co-op Bank South Sudan cut its net loss to Sh484.4 million from Sh1.5 billion in the first pandemic year of 2020.
“The Co-operative Bank of Kenya Limited injected additional capital of Sh372 million into Co-operative Bank of South Sudan in 2021,” said the Nairobi Securities Exchange-listed firm in its latest annual report.
The bank has not disclosed the reason for the increased capital injection in South Sudan where it operates four branches. The last major disclosed capital investment in the country, ravaged by years of civil war, was Sh305.55 million in 2016.
The Kenyan banking multinational set up its sole regional unit in 2013 by initially investing Sh1.5 billion, which gave it a 51 percent stake in the joint venture with the Government of South Sudan, which holds the remaining 49 percent shareholding.
The lender, 64.6 percent owned by co-operative societies, has since 2013 injected at least Sh1 billion in additional capital in the loss-making unit, bringing cumulative investment to at least Sh2.5 billion.
Banks operating in South Sudan are facing several challenges including a significant devaluation of the country’s currency amid unending political violence.
“With effect from 2016, the South Sudan economy was considered to be hyperinflationary. As a result, the financial statements of Co-operative Bank of South Sudan, which are included in the Group financial statements, have been restated to reflect the changes in general purchasing power of the South Sudanese pound,” Co-op Bank auditors, EY, wrote in the latest annual report for 2021.
Co-op Bank’s profit for the year ended December climbed 53 percent to Sh16.5 billion. The performance was driven by a 14 percent increase in total interest income to Sh55.6 billion as the loan book and investment in government securities expanded 8.2 percent and 13.6 percent to Sh310.1 billion and Sh184 billion respectively.
Co-op Bank declared a dividend of Sh1 per share or a total of Sh5.86 billion, which will be paid on June 17 to shareholders on the May 30 register.
The payout is the same as the previous two years when other listed banks suspended or slashed dividends, citing increased economic uncertainty due to the Covid-19 pandemic.
cmunda@ke.nationmedia.com
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