Co-op Bank chief executive Gideon Muriuki sold 14.7 million shares of the lender with a current market value of Sh160 million in the five months ended May, according to regulatory filings.
He has been selling and buying the bank’s shares over the years in transactions that have seen his stake oscillate between 1.7 per cent and two per cent.
The latest transactions reduced his holdings from two per cent in December 2019 to 1.75 per cent in May that has a market value of Sh1.1 billion based on the lender’s closing price of Sh10.85 on Friday.
While Mr Muriuki reduced his holdings, a few major investors raised their stake. Billionaire investor Baloobhai Patel, for instance, bought 4.8 million shares currently valued at Sh52 million over the five-month period.
This raised his ownership in the lender from 0.45 per cent in December 2019 to 0.53 per cent in May that has a market value of Sh337 million.
Co-op Bank’s share price touched highs of Sh16.5 on January 3, after rallying 50 per cent from lows of Sh11 on October 9, 2019 following the scrapping of lending rate controls on November 7, 2019.
The huge price gain prompted profit-taking which later morphed into panic selling as Kenya confirmed its first case of coronavirus on March 12, leading to the current share price of Sh10.85.
Investors have rushed to get out of bank stocks fearing major earnings decline as the Covid-19 pandemic and measures taken to control it drive defaults from business disruption and employee layoffs.
Kenyan banks had restructured aggregate loans of Sh844.4 billion or 29 per cent of the industry’s Sh2.9 trillion loan book as of June, according to the Central Bank of Kenya (CBK).
Co-op Bank has, however, fared relatively better with renegotiated loans worth Sh39.2 billion and equivalent to 14.4 per cent of its Sh272.1 billion loan book in the same period.
Its net earnings also dropped by a lower margin of 3.6 per cent to Sh7.1 billion in the half year ended June when one of its main rivals, KCB Group, reported a 40.4 per cent net profit drop to Sh7.5 billion.
Co-op Bank has nearly half of its loan book in the manufacturing, energy and water sectors and little in tourism and transport, which are the hardest hit in the coronavirus fallout.
The tourism industry suffered from the ban of international travel in March, a restriction that was lifted this month.
The sector, heavily reliant on foreign tourists, is not expecting a quick recovery as the disease continues to discourage international travel besides eroding people’s disposable incomes across the globe.
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