Co-operative Bank #ticker:COOP and KCB #ticker:KCB took top positions in a Cytonn industry survey as Equity was pushed down in some parameters.
Co-op Bank was number one in franchise value followed by KCB and Equity #ticker:EQTY.
“Cooperative Bank ranked first position on the back of low nonperforming loans at 4.8 per cent, a high return on equity of 22.9 per cent, and a high tangible common ratio of 17.0 per cent — against an average of 10.9 per cent, 16.8 per cent and 14.9 per cent, respectively for the industry,” said Cytonn the franchise valuation.
“KCB Group and Barclays #ticker:BBK have the highest upsides (price rise potential) at 27.5 per cent and 8.8 per cent, respectively. KCB Group maintained its intrinsic value ranking from Q3 2016, while Barclays rose six positions to position two,” said the report.
Equity fell from position four to seven with a negative upside. In composite value ranking for the full year 2016, KCB led taking the first position occupied by Equity in quarter three, while Co-op rose from number three to two.
Equity was weighed down by an expensive valuation based on price to tangible book valuation. Housing Finance #ticker:HFCK and National Bank of Kenya #ticker:NBK were ranked 10th and 11the — the lowest — in both franchise and intrinsic value scores.
“The report themed ‘Consolidation and resilience in a challenging operating environment’ analysed the results of the listed banks in the past year so as to determine which banks are the most attractive and stable for investment from a franchise value and from a future growth opportunity perspective,” said Cytonn’s Elizabeth Nkukuu.
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Note: The results are not exact but very close to the actual.
