Co-operative Bank of Kenya will sell its shares through an initial public offering (IPO) in the third quarter of the year.

The bank,currently wholly owned by the cooperative movement,is the only the second company after Safaricom that plans a listing at the Nairobi Stock Exchange this year.

Safaricom’s IPO kicks off on March 28. Co-operative Bank’s planned listing is an attempt to raise an additional Sh5 billion from the market.

“We want our shareholders to know the value of their shares,” said managing director Gideon Muriuki,  in his office on Wednesday,when he released the bank’s financial results for the year ended December 31,2007.

Driven largely by significant growth in interest and commission income,the institution’s pre-tax profit rose by 84 per cent from Sh1.26 billion in December 31,2006,to Sh2.32 billion last year.

This represents a complete turnaround for the bank from 2001,when it recorded a Sh2.3 billion loss.

On the IPO,whose proceeds will go towards funding further growth and expansion,Mr Muriuki said the bank’s Board of Directors,which has already approved it,will seek the shareholders’ nod at their Annual General Meeting slated for April 24,2008. “If the shareholders approve it (IPO),we will then seek the necessary statutory approvals from the Central Bank of Kenya, Capital Markets Authority and NSE,” said the MD.

The board approved an enhanced dividend payment of Sh8 per share for 2007,up from the Sh5 per share paid in 2006. During the period under review, interest income grew from Sh4.4 billion to Sh5.5 billion,as commission income increased to Sh3.8 billion. Loans and advances to customers grew by 35 per cent from Sh28.4 billion in 2006 to Sh38.4 billion in 2007.

“During the year,we continued to enhance our risk management systems with,notably,a major cleanup of the balance sheet,” he said.

Customer deposits grew from Sh48 billion recorded in 2006 to Sh55 billion in 2007,a 14.5 per cent growth,as its customer base reached 750,000.

Projecting that the bank’s profits would hit the Sh3.5 billion mark this year,Mr Muriuki outlined an ambitious expansion plan for the year, including a 24 hour call centre,and opening 20 new branches in Nairobi,Rift Valley and Coast provinces in addition to the current 43.

It will also open an additional 50 automated teller machines (ATMs) by December 31,boosting its current network of 150 ATMs.

The institution’s subsidiaries,Co-op Consultancy Services and Co-optrust Investment Services Limited,continued to perform well in offering corporate finance and fund management services respectively during the year.