Baloobhai Patel raised his ownership from 5.8 million shares in February to 25.2 million in September, boosting his stake in the lender from 0.12 per cent to 0.43 per cent.
The value of his shareholding jumped from Sh93.8 million to Sh403 million over the same period based on the bank’s share price of Sh16 on Monday.
Billionaire investor Baloobhai Patel has more than quadrupled his stake in Co-op Bank #ticker:COOP to Sh403 million, becoming the second-largest individual investor in the Nairobi Securities Exchange-listed firm.
Co-op Bank said in regulatory filings that Mr Patel raised his ownership from 5.8 million shares in February to 25.2 million in September, boosting his stake in the lender from 0.12 per cent to 0.43 per cent.
The value of his shareholding jumped from Sh93.8 million to Sh403 million over the same period based on the bank’s share price of Sh16 on Monday.
The share purchases saw him leap over low-profile Tanzanian billionaires Aunali and Sajjad Rajabali –who held a 0.41 per cent stake as of September— to rank second after the bank’s CEO, Gideon Muriuki, whose ownership stands at 2.05 per cent.
Purchase of Co-op Bank’s shares expands Mr Patel’s local banking interests, with the investor also holding significant stakes at Barclays Bank of Kenya #ticker:BBK and DTB Group #ticker:DTK.
He is one of the most diversified high-net-worth investors at the NSE where he has been buying more shares in various firms, including Carbacid Investments #ticker:CARB. Mr Patel’s increased investment in Co-op Bank is seen as a signal of his confidence about the lender’s future prospects.
The lender has in recent years elbowed its way to the top banking circles, overtaking long-time rivals like Barclays Bank of Kenya and Standard Chartered Bank (Kenya) by various measures, including profit, assets and return on equity.
Co-op Bank reported a Sh9.5 billion net profit for the nine months ended September, a decline of 9.5 per cent from Sh10.5 billion the year before as lower interest income and higher provision for defaults took a toll.
Total interest income fell 7.6 per cent to Sh29.8 billion despite a 14.2 per cent rise in lending to Sh259.3 billion, underlining the impact of the interest rate caps and defaults. Gross bad debt jumped 69.5 per cent to Sh16.9 billion, a move that saw the bank raise its provisions 31.7 per cent to Sh2.5 billion.
Co-op Bank, KCB #ticker:KCB and Equity #ticker:EQTY are among a handful of banks that have best defended their profitability in the interest rate control environment, leading with return on shareholder funds ranging from 18 per cent to 21 per cent.
New accounting rules effective January 1 are, however, set to further pile pressure on bank earnings by requiring them to provide for expected losses rather than those already incurred. Mr Patel, a long-term investor, is however expected to ride out the short term challenges.
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