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Investors unmoved by impressive bank profits

Capital Markets

Investors unmoved by impressive bank profits

Investors unmoved by impressive bank profits. FILE PHOTO | NMG

Investors have reacted with little enthusiasm to the high jump in bank earnings in the nine months that ended September, signalling continued apathy in the stock market.

DTB Group, KCB Group, I&M Group, Equity Group, Absa Bank Kenya, StanChart, Co-op Bank and NCBA Group reported net profit growth of between 19 per cent and 96.2 per cent in the review period.

Their share prices have, however, risen by an average of three per cent since the publication of the results.

Absa’s share price fell 2.1 per cent to Sh11.4 yesterday when it announced a 30 per cent net profit growth to Sh10.7 billion after market close.

DTB’s net income increased 19 per cent to Sh5.7 billion but its share price gained 3.6 per cent to Sh48.7 yesterday compared to the closing price on Friday when it announced its results.

KCB’s stock price has risen by a marginal 0.26 per cent to Sh37.75 from November 15 when the lender announced a 20.9 per cent net earnings jump to Sh30.4 billion.

The bank declared an interim dividend of Sh1 per share or a total of Sh3.2 billion. The dividend will be paid on or about January 13, 2023, to shareholders on the register at the close of business on December 8, 2022.

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I&M’s net profit rose 25 per cent to Sh6.8 billion while its stock has appreciated 2.72 per cent to Sh16.95 from Monday last week.

Equity reported a 26.6 per cent increase in net earnings to Sh33.3 billion but its share price has risen 1.33 per cent to Sh45.65 per cent since Tuesday last week.

The country’s biggest bank could pay a higher dividend for the year ending next month if it sticks to its policy of distributing a minimum of 30 per cent of net income.

Equity paid a dividend of Sh3 per share in the year ended December 2021.

StanChart recorded a 37.1 per cent jump in net profit to Sh8.7 billion while its stock price has gained only 1.2 per cent to Sh142.5 from Wednesday last week.

The bank declared an interim dividend of Sh6 per share, amounting to an aggregate of Sh2.2 billion. The dividend will be paid on December 29 to shareholders on record as of December 15.

Co-op Bank’s net income increased 47 per cent to Sh17 billion while its stock price has jumped a modest 4.6 per cent to Sh12.45 from November 17.

NCBA nearly doubled its net profit to Sh12.8 billion but its share price gained a relatively modest 8.2 per cent to Sh32.85 from Wednesday last week.

READ: Prime Bank posts 15.7pc profit growth in nine months

It is, however, the highest stock price gain among the listed lenders and takes it closer to the 52-week high of Sh33.25 recorded on September 8.

The Nairobi Securities Exchange (NSE) has remained depressed following the latest successive shocks of the Covid-19 pandemic and the Russia-Ukraine conflict.

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