KCB took the top spot after being measured on a blend of factors including its profitability and market valuation relative to its rivals.
The bank, for instance, has the highest return on capital at 22.2 percent.
KCB Group #ticker:KCB is the most attractive listed bank in Kenya in terms of prospective returns, according to the latest quarterly report by asset manager Cytonn Investments.
The country’s biggest bank took the top spot after being measured on a blend of factors including its profitability and market valuation relative to its rivals. KCB, for instance, has the highest return on capital at 22.2 percent.
Banking group I & M Holdings #ticker:I&M was ranked second followed by Co-op Bank #ticker:COOP, Equity Group #ticker:EQTY, Stanbic Holdings #ticker:CFC, Barclays Bank of Kenya #ticker:BBK, DTB Group #ticker:DTK, Standard Chartered Bank (Kenya) #ticker:SCBK and HF Group #ticker:HFCK.
Cytonn owns shares in some of the banks it covers in its research reports. The asset manager currently has stakes in I & M, KCB, Co-op Bank, Equity and Barclays whose share prices it expects to rise by range of between 13.1 percent and 61.2 percent in the short-term.
Cytonn says banks will make more profits from their mainstay lending business after the rate caps were removed.
“Post interest rate cap, banks’ net interest margins are expected to increase on account of increased interest income following the repeal of the cap thus allowing loan pricing based on the credit risk of borrowers, coupled with low cost of funds aided by access to cheap deposits,” the company said.
It added that the lenders continue to pursue strategies aimed at growing their non-interest income including fees and commissions charged on transactions.
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