Billionaire investor Baloobhai Patel has bought an additional 14.6 million shares in Co-operative Bank with a current market value of Sh181.8 million, entrenching his position as the lender’s second-largest individual investor.
Filings by the Nairobi Securities Exchange-listed firm show that Mr Patel raised his holdings in Co-op Bank to 55.1 million shares at the end of last month from 40.4 million shares as of December 31, 2022.
This led to his stake in the country’s third largest bank rising to 0.94 percent, with a current market value of Sh683.8 million, from 0.69 percent over the same period. This is the latest investment in Co-op Bank by Mr Patel who has been steadily buying the lender’s shares in the past few years.
Co-op Bank’s chief executive Gideon Muriuki is the top individual investor in the institution where he has maintained a 1.75 percent stake. Mr Patel, a long-term investor in listed equities, has announced plans to shift some of his directly owned shares to a corporate structure by transferring them to his private firm Aksaya Investment Holdings Limited.
The first of such transactions, which have potential tax savings, will involve the 49.9 percent stake that he holds in Carbacid Investments Plc. Mr Patel is among investors set to benefit from Co-op Bank’s new record dividend of Sh1.5 per share or a total of Sh8.8 billion for the year ended December.
This will see Mr Patel receive a payout of Sh78.5 million, net of taxes. The bank raised the dividend by 50 percent from the Sh1 per share distributed for the previous financial year. Co-op Bank’s net profit rose by a third to Sh22 billion in the year ended December, helped by a surge in interest and non-interest income.
It joined other top lenders including Absa Bank Kenya that have raised their dividends to record levels amid double-digit growth in earnings. The higher payouts have been met with negligible stock price gains, resulting in some of the highest dividend yields on the NSE at more than 11 percent.
Co-op Bank benefitted from a 32.6 percent growth in non-interest income to Sh25.7 billion. Total interest income also jumped 10.9 percent to Sh61.7 billion, contributing to the bottom line. The loan book expanded 9.4 percent to Sh339.3 billion while investment in government securities fell 5.8 percent to Sh173.2 billion.
Despite the reduction in treasuries, interest income from the securities increased to Sh20.8 billion from Sh18.7 billion.
This reflects the impact of rising interest rates on fixed-income instruments in response to high inflation and measures taken by the Central Bank of Kenya to rein in the cost of living.
Co-op Bank’s operating expenses increased 10.9 percent to Sh42.2 billion. Among the drivers of the higher costs was a Sh747.4 million jump in loan loss provision to Sh8.6 billion. This has boosted its loan loss coverage to 74 percent from 69 percent previously.