Co-operative Bank has increased its dividends by half as net profit for the year ended December 2022 rose to Sh22 billion on the growth of non-funded income.

The lender recommended a dividend of Sh1.50 per share, a 50 percent increase on the Sh1 paid out last year, a major boost to the co-operative societies, the bank’s majority shareholders.

“The strong performance has led to a sustained increase in shareholder value as reflected in the competitive return on equity of 21.2 percent,” Co-op Bank chief executive Gideon Muriuki said Thursday.

The Nairobi Securities Exchange (NSE) listed lender’s net profit grew 33.3 percent from Sh16.5 billion in 2021.

In addition to an increase of more than a third in non-interest income, including fees and commissions, profitability was also attributed to cost management, with the cost-to-income ratio declining to 47.1 percent in the review period from 59 percent a year earlier.

Co-op Bank’s operating income grew by 17.9 percent from Sh60.4 billion to Sh71.3 billion. Total non-interest income rose by 32.7 percent from Sh19.4 billion to Sh25.7 billion.

Net interest increased at a slower rate at 10.9 percent from Sh41 billion to Sh71.3 billion. The lender’s expenses increased by 10.9 percent from Sh38.1 billion to Sh42.2 billion.