KENYA – Pension fund National Social Security Fund (NSSF) has purchased an additional 8.55 million shares in KCB Group, raising its stake in Kenya’s biggest bank to 7.99 per cent.
Latest figures shows that the state-controlled pension fund closed last month with 256.903 million shares in KCB, being a rise from 248.3 million shares or a 7.73 per cent stake in October.
The latest shareholding numbers means that NSSF has added 31.07 million shares in KCB between April and December 2020 amid the Covid-19 environment that saw the lender’s stock take a beating, making it attractive for purchasing by investors with a long-term view.
NSSF had a 7.03 per cent shareholding in KCB at the end of March last year with the onset of Covid-19 pandemic disruption in Kenya mid-March seeing KCB share price close the year having reduced by 29.4 per cent.
NSSF’s purchases have contributed to local investors raising their aggregate ownership in the bank to a new high of 86.59 per cent from 80.91 per cent in March last year and end of 2017 when their stake was at 70.75 per cent.
“Local investors aggregate ownership in KCB is at a new high of 86.59%”
Foreign investors sold 182.48 million shares between March and December last year, with the trades valued at about US$60 million when calculated by KCB current share price of about US$0.33 with most of the sales coming after the coronavirus-inspired panic trades hit Nairobi bourse from April.
Kenya government through its National Treasury retains its 19.76 per cent stake in KCB which was boosted by the lender’s purchase of National Bank of Kenya (NBK) in an all-stock deal last year.
Former NBK investors, including the government and NSSF, converted their stakes into shares of the country’s biggest bank at a rate of one for every 10 held.
Fundamentals of companies such as banks have come under pressure in Covid-19 especially with drops in profits on higher provisioning for loan defaults dimming the dividend outlook.
KCB group nine-month net earnings to September tumbled by 43.1 per cent to US$98.3 million, weighed down by a sharp increase in provisions for coronavirus-related defaults.
Banks in Kenya had between March and October last year restructured loans worth US$125.6 billion or 46.5 per cent of the total loan book due to the coronavirus-induced economic hardships that have hurt borrowers’ ability to repay.
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