Kenyan Billionaire Expands Co-op Bank Stake With Sh232 Million Share Purchase

January 19, 2024

Baloobhai Patel, a billionaire investor, has recently increased his stake in the Co-operative Bank of Kenya to 1.29 percent by purchasing an additional 20.5 million shares for Sh232 million.

Patel’s investments in the bank have been on the rise, particularly during a period when many banking stocks are seen as undervalued.

Regulatory filings indicate that as of December 2023, Patel held a total of 75.6 million shares in Co-op Bank, valued at about Sh855.2 million, up from a 0.94 percent stake earlier in February 2023.

This increase in shares has established Patel as the second-largest individual investor in Co-op Bank, following closely behind the CEO, Gideon Muriuki, who owns a two percent stake.

Co-op Bank is now among Patel’s significant investments on the Nairobi Securities Exchange, and it is expected to generate over Sh100 million in dividends annually for him.

As of the latest share prices, Co-op Bank had the second-highest dividend yield among listed banks at 13.3 percent, surpassed only by Standard Chartered Bank Kenya.

The bank raised its dividend per share to Sh1.5, up 50 percent from the previous year, aligning with its strategy of balancing shareholder returns with sustainable growth.

The bank’s financial performance has been strong, with a 7.5 percent increase in net profit to Sh18.4 billion for the nine months ending September 2023.

This growth is attributed to higher interest income from loans, which rose from Sh17 billion in the previous year to Sh49.3 billion.

Co-op Bank’s loan book expanded by Sh42.9 billion, reaching Sh378 billion, and its investments in government securities increased to Sh185.1 billion.

The banking sector, including Co-op Bank, is set to benefit from rising interest rates, which are expected to improve lending margins.

Patel’s investment portfolio also includes significant stakes in Carbacid Investments Plc, Absa Bank Kenya, Williamson Tea, Bamburi Cement and Sanlam Kenya.

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