Capital Markets

NSSF firms grip on KCB with Sh719 million share purchase

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KCB branch along Mama Ngina Street in Nairobi. PHOTO | DENNIS ONSONGO | NMG

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Summary

  • Regulatory filings show that the pension fund had raised its ownership in the Nairobi Securities Exchange-listed lender to 248.3 million shares or a 7.73 per cent equity in KCB as of August.
  • This was up from 228.6 million shares (7.12 per cent stake) in December 2019.
  • NSSF’s purchases have contributed to local investors raising their aggregate ownership in the bank to a new high of 84.72 per cent from 78.06 per cent over the same period.

The State-controlled National Social Security Fund (NSSF) has bought an additional 19.6 million shares in KCB Group #ticker:KCB with a current market value of Sh719.4 million, boosting its stake in the country’s biggest bank.

Regulatory filings show that the pension fund had raised its ownership in the Nairobi Securities Exchange-listed lender to 248.3 million shares or a 7.73 per cent equity in KCB as of August.

This was up from 228.6 million shares (7.12 per cent stake) in December 2019.

NSSF’s purchases have contributed to local investors raising their aggregate ownership in the bank to a new high of 84.72 per cent from 78.06 per cent over the same period.

Foreign investors have sold a combined stake of 6.66 per cent in the eight-month period. Most of the sales came after the coronavirus-inspired panic trades hit Nairobi bourse.

The National Treasury retains its 19.76 per cent stake in KCB and 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.

Local investors’ purchase of KCB shares has seen the lender’s share price recover from the lows of Sh30.5 in mid-August following the announcement of a record profit drop.

KCB reported a 40 per cent net profit fall in the half-year ended June as it ramped up provisions for coronavirus-related defaults. The lender made a net profit of Sh7.6 billion in the review period compared to Sh12.6 billion the year before.

It raised provisions for potential loan losses 3.6 times to Sh11 billion from Sh3 billion, eating into its bottom line.