NSSF buys Sh312m more KCB shares

Kenya Commercial Bank branch in Nairobi. FILE PHOTO | NMG

By PATRICK ALUSHULA
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Summary

• National Social Security Fund (NSSF) has purchased an additional 8.55 million shares in KCB Group, raising its stake in the country’s biggest bank to 7.99 per cent.
• Latest disclosures shows that the state-controlled pension fund closed last month with 256.903 million shares in KCB, being a rise from 248.3 million shares or a 7.73 per cent stake in October.
• The latest shareholding means that NSSF has added 31.07 million shares in KCB between April and December 2020.

National Social Security Fund (NSSF) has purchased an additional 8.55 million shares in KCB Group

, raising its stake in the country’s biggest bank to 7.99 per cent.

Latest disclosures shows that the state-controlled pension fund closed last month with 256.903 million shares in KCB, being a rise from 248.3 million shares or a 7.73 per cent stake in October.

The latest shareholding means that NSSF has added 31.07 million shares in KCB between April and December 2020 amid the Covid-19 environment that saw the lender’s stock take a beating, making it attractive for purchasing by investors with a long-term view.

NSSF had a 7.03 per cent shareholding in KCB at the end of March last year. The onset of Covid-19 disruption in Kenya mid-March saw KCB share price close the year having retreated by 29.4 per cent.

NSSF’s purchases have contributed to local investors raising their aggregate ownership in the bank to a new high of 86.59 per cent from 80.91 per cent in March last year and end of 2017 when their stake was at 70.75 per cent.

Foreign investors sold 182.48 million shares between March and December last year, with the trades valued at about Sh6.6 billion when calculated by KCB current share price of about Sh36.5. Most of the sales came after the coronavirus-inspired panic trades hit Nairobi bourse from April.

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.

Fundamentals of firms such as banks have come under pressure in Covid-19 especially with drops in profits on higher provisioning for loan defaults dimming the dividend outlook.

KCB group nine-month net earnings to September tumbled by 43.1 per cent to Sh10.8 billion, weighed down by a sharp increase in provisions for coronavirus-related defaults.

Banks had between March and October last year restructured loans worth Sh1.38 trillion or 46.5 per cent of the total loan book due to the coronavirus-induced economic hardships that have hurt borrowers’ ability to repay.