Shares of KCB Group Plc, Kenya’s largest bank by assets, surged to their highest level since May as investors priced in the potential for a higher dividend payout on the back of its sale of National Bank of Kenya Ltd.
Initiated in March, the transaction with Access Bank Plc would mark the end of KCB’s involvement with NBK, a subsidiary it acquired in 2019 but struggled to turn around due to persistent losses. KBC at the time said closing the deal would take six to nine months.
Melodie Gatuguta, an associate banking analyst at Standard Investment Bank Ltd. in Nairobi said investors are positioning themselves for the conclusion of the NBK deal, which will provide KCB with capital relief.
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“The sale also boosts confidence for a strong year-end dividend after the highest interim payout on record, following the bank’s recovery this year,” Gatuguta said.
The improved performance has driven KCB’s stock up 67.8% year-to-date, making it the second-best performer on the Nairobi Securities Exchange 20 Share Index with a market capitalization of 118,9 million shillings ($921.7 million). The shares traded at 37 shillings during the session.
