KENYA – The National Social Security Fund (NSSF), a Kenyan government agency, has bought an additional 11.7 million shares of KCB Group, a financial service holding company, raising its stake to a new high of 8.38 percent.
The extra shares have a current market value of KSh440.5 million (US$3.80m). The fund raised its holdings of KCB shares to 269.2 million in March, according to the bank’s shareholder register.
NSSF held 257.4 million shares of the lender in the same month last year.
The State-controlled fund, which is the second-largest investor in KCB after National Treasury with a 19.76 stake, has been steadily increasing its ownership in the lender over the years.
NSSF had a 6.12 percent ownership in the bank in March 2019 and has been raising it from purchase of more shares besides the transfer of its previous stake in National Bank of Kenya (NBK) into shares of the country’s second-largest bank.
KCB completed the buyout of NBK owners in March 2020 by issuing them with one share for each 10 they held in the institution that is now a subsidiary of the Nairobi Securities Exchange-listed firm.
NSSF’s latest additional investment in KCB comes as banks, in general, are posting strong profit growth, recovering from the impact of the Covid-19 pandemic which caused a sharp increase in defaults and provisions early on.
The bank’s net income increased 74 percent to KSh34.09 billion (US$294.26m) in the year ended December, helped by lower provisions for bad debts and higher income from loans.
It tripled its dividend payout to KSh3 per share. KCB says it is still keen on expanding in the regional market through acquisitions.
Tanzania and the Democratic Republic of Congo (DRC) are the markets the bank is eyeing. KCB already has a subsidiary in Tanzania while DRC will be a new entry.
The bank last year acquired a 62.06 percent stake in Rwanda’s Banque Populaire du Rwanda Plc (BPR) from Atlas Mara, expanding in that market where it was already running a subsidiary (KCB Bank Rwanda).