South African bank buys extra Sh422m Stanbic shares

South Africa’s Standard Bank has acquired an additional 4.3 million shares worth about Sh422 million in Stanbic Holdings, raising its stake in the local subsidiary to 69.1 percent in the year ended December.

The share purchases, which are expected to continue in the near term, are part of the multinational’s plans to raise its stake in the Nairobi Securities Exchange-listed firm to 75 percent.

The buying spree started early last year when Standard Bank announced it was ready to purchase 59 million Stanbic shares at Sh95 each, valuing the offer that ran from May 21 to July 3, 2018 at Sh5.6 billion.

It only received acceptances amounting to 31.6 million shares valued at Sh3 billion, raising its stake to 68.01 percent from the previous 60 percent.

The conglomerate then applied to the Capital Markets Authority seeking approval to buy more Stanbic shares in the open market to reach its 75 percent ownership target.

“Consequently, Standard Bank has applied to the authority to extend the exemption granted by the Authority…to allow Standard Bank to purchase additional ordinary shares on the exchange in accordance with the applicable exchange rules for a further period,” the multinational said in July last year.

Standard Bank says in its latest annual report that it subsequently acquired an additional 1.09 percent stake in the Kenyan subsidiary as of December, equivalent to an extra 4.3 million shares.

The multinational’s plans caused Stanbic’s share price to rally above the Sh100 mark in July last year but conclusion of its first batch of purchases saw the stock recede to trade below Sh95 for the remaining part of the year.

The share price has again rallied this year to trade at about Sh100, with the company announcing strong results for the year ended December.

The bank’s earnings in the review period rose 45.6 percent to Sh6.2 billion, helped by higher interest and transaction-based income.