Co-operative Bank (Co-op Bank) shareholders received a welcome windfall on Monday with the announcement of a Sh8.8 billion dividend payout.

This follows approval from shareholders during the virtual Annual General Meeting (AGM) held last month. Co-op Bank becomes the second Nairobi Securities Exchange (NSE) listed bank to share profits with its investors, following the lead of Stanbic Bank.

The Board of Directors recommended a dividend of Sh1.50 per share, translating to a total payout of Sh8.8 billion.

This figure remains consistent with the previous year's dividend distribution.

The bank's largest shareholder, Co-op Holdings Co-operative Society Limited, received a significant portion of the payout – Sh5.68 billion – reflecting their substantial 64.56 per cent stake in Co-op Bank.

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Co-op Bank's financial performance continues to shine.

The bank reported a healthy 5.2 per cent increase in net profit for the financial year ending December 2023, reaching Sh23.2 billion.

This growth is attributed to both increased income and a reduction in operating costs.

Commenting on the bank's performance, Gideon Muriuki, Managing Director of Co-op Bank, stated, "The strong performance has led to a sustained increase in shareholder value as reflected in the competitive return on equity of 21 per cent."

Muriuki also emphasized the bank's commitment to strategic initiatives that promote resilience and growth across various economic sectors.

While other listed banks for their dividend payouts later in June, the focus remains on Co-op Bank's impressive performance.

The substantial dividend payouts by the banking sector are expected to contribute significantly to the overall dividend pool on the NSE, projected to reach Sh66.4 billion.

This positive outlook has attracted investor interest, as evidenced by the 14.05 per cent year-to-date increase in Co-op Bank's share price, currently trading at Sh13.80.

Among the notable beneficiaries of the Co-operative Bank's dividend payout are prominent shareholders such as Muriuki himself, Equity Bank CEO James Mwangi, the Kenyatta family, and the Ndegwa family.