Ndegwas buy an extra Sh315 million NCBA stake

NCBA Chairman James Ndegwa. The Philip Ndegwa family have taken a combined 23.87 percent stake in property fund ILAM Fahari I-Reit.

Photo credit: File | Nation Media Group

The Philip Ndegwa family raised its shareholding in tier-one lender NCBA by 8.25 million shares with a current market value of Sh315.6 million in the first half of this year, deepening their position as the biggest stakeholders in the bank ahead of the Jomo Kenyatta family.

Latest regulatory filings show that the Ndegwa family, through their investment vehicle First Chartered Securities, held 246.15 million shares in the bank as at July 10 –valued at Sh9.41 billion— up from 237.9 million units at the end of December 2022.

This has seen their stake in the lender through the vehicle rise to 14.94 percent from 14.44 percent at the end of last year, with the stake held by the Kenyattas through Enke Investments Limited remaining unchanged at 13.2 percent or 217.49 million units valued at Sh8.32 billion presently.

The Ndegwas’ addition to their stake has coincided with a period of gains for the NCBA share at the stock market, where it has outperformed all the other banking stocks over a 12-month period.

The counter has recorded a gain of about 60 percent in the period, closing at Sh38.25 per unit on Monday.

The Ndegwas have been bullish on NCBA for decades, investing substantial capital starting from NIC Group and CBA Group, which were merged in September 2019 to create the Nairobi Securities Exchange-listed financier.

The rise in stake in the first half of this year follows on from the purchase of an additional 31.6 million shares in the lender in the year ended December 2022, which is worth Sh1.2 billion at the bank’s current trading share price.

The Ndegwas’ increased investment in NCBA also comes as the bank’s performance has improved in the wake of the merger which allowed it to build scale in a market where size is a key determinant of the industry’s profit distribution.

The bank’s earnings, profitability metrics, dividend payouts and market value have all improved, benefitting long-term investors including former shareholders of NIC Group who were allocated a combined 47 percent ownership in the merged entity.

NCBA now has a market value of Sh63 billion compared to the Sh17.7 billion that NIC held in the year ended December 2018 –its last full year of operations before the merger.

In the first quarter of this year, NCBA’s net profit rose by 48.5 percent to Sh5.1 billion, from Sh3.4 billion in the corresponding quarter in 2022.

The lender’s loan book expanded to Sh287.2 billion from Sh243.9 billion, while its holding of government securities jumped to Sh207.1 billion from Sh194.7 billion.

This combined growth of loan book and bond holdings raised the bank’s asset base to Sh628.8 billion from Sh587.4 billion in the same period last year.

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