The State-controlled National Social Security Fund (NSSF) raised its stake in listed lender KCB by 3.33 million shares in the second quarter of this year, taking its total outlay on the bank’s stock to Sh11.5 billion.
The NSSF now owns 272.6 million shares in the tier-one lender, equivalent to a stake of 8.48 percent, which has cemented its position as KCB’s second-largest shareholder after the National Treasury, which maintained a 19.76 percent stake in June.
The additional shares the pension fund bought in the three months to June are valued at Sh140.6 million.
The fund has been steadily increasing its ownership in the lender and other large blue chips over the years, attracted by their stable fundamentals and regular dividend payments that protect value for pensioners.
The NSSF held a 6.12 percent ownership in the bank in March 2019 and has been raising it from purchase of more shares besides the transfer of its previous stake in National Bank of Kenya (NBK) into shares of the country’s second-largest bank by assets.
The pension fund is the biggest local institutional investor in the stock market, holding significant stakes in multiple companies directly and through its appointed fund managers.
The fund’s latest additional investment in KCB comes as banks, in general, are posting strong profit growth, recovering from the impact of the Covid-19 pandemic, which caused a sharp increase in defaults and provisions early on.
The bank’s net income increased 74 percent to Sh34.09 billion in the year ended December, helped by lower provisions for bad debts and higher income from loans. It subsequently tripled its dividend payout to Sh3 per share.
The lender has also been shoring up its future growth prospects by lining up new acquisitions in the region.
The bank last year acquired a 62.06 percent stake in Rwanda’s Banque Populaire du Rwanda Plc (BPR) from Atlas Mara, expanding in that market where it was already running a subsidiary (KCB Bank Rwanda).
Last week, KCB announced an agreement to acquire an 85 percent stake in DRC’s Trust Merchant Bank for an estimated Sh15 billion, looking to replicate Equity Group’s profitable foray into the new market.