KENYA – South Africa’s Standard Bank is set to embark on a new phase of buying shares in its Kenyan subsidiary Stanbic Holdings at a cost of more than KSh2.4 billion (US$24m), with a target of raising its stake in the lender to 75 percent by December 2020.
According to Business Daily, the multinational already spent about KSh3.4 billion (US$34m) last year to raise its ownership in the Nairobi Securities Exchange-listed firm from the previous 60 percent to the current 69.1 percent.
Standard Bank, through its investment vehicle Stanbic Africa Holdings Limited (SAHL) said it has received a new approval from the Capital Markets Authority to buy more Stanbic shares on the open market as it seeks to reach the intended ownership threshold.
“SAHL is pleased to announce that CMA has granted a further requested extension of the exemption to trade on market for a period expiring on December 31, 2020,” the multinational said in a notice.
The conglomerate added that it will aim to acquire a maximum of 23 million additional shares available for sale on the NSE.
The extra shares are valued at KSh2.4 billion (US$24m) based on Stanbic’s share price of KSh105.7 (US$1.05) prior to the new announcement.
If Standard Bank gets all the new shares it is seeking, it will have spent an estimated Sh6 billion (US$60m) in the transactions.
The multinational’s move to increase its stake is seen as an expression of its confidence about the subsidiary’s future prospects. Stanbic Holdings, like other Kenyan banks, are expected to report higher earnings in the coming years following the recent scrapping of lending rate controls.
The multinational says it has recorded higher lending margins in Kenya “due to the repricing of the lending book following the lift of regulatory interest rate floors and caps.”
The local subsidiary has also benefitted from higher transaction volumes which boost fees and commissions.
Standard Bank intends to have Stanbic Holdings retain its listing on the NSE. The multinational had an option of fully acquiring the Kenyan unit and delisting it from the Nairobi bourse after the threshold for making compulsory acquisitions was lowered to 50 percent from the previous 90 percent.