Bloomberg News

Kenya Commercial, Co-operative Bank Rise on Renewed Confidence

December 29, 2011

Dec. 29 (Bloomberg) -- Co-operative Bank of Kenya Ltd. and Kenya Commercial Bank Ltd. led gains by lenders in the east African nation on renewed investor confidence on speculation the industry may report better earnings.

Co-operative Bank, the fifth biggest lender by market value, rose as much as 4.9 percent to 12.85 shillings before trading up 2 percent as 12:15 p.m. in the capital, Nairobi, heading for its highest close in a month.

Kenya Commercial Bank, the biggest lender by assets and outlets, climbed 2.7 percent to 16.95 shillings, its highest intraday price in five weeks.

“With our country macros showing improvement and yields likely to top out soon, there is still value in the banking sector which has seen a lot eroded in share prices this year,” Alistair Gould, head of trading and business development at Nairobi-based Old Mutual Securities Ltd. said by e-mail.

Diamond Trust of Kenya Ltd., a lender publicly traded in Kenya, Uganda and Tanzania, rose 1.1 percent and Equity Bank Ltd., the biggest lender by customers, climbed 0.6 percent.

“There has been some position-taking across a number of counters and people have some renewed confidence in the banking sector after statistics showed that the sector had overcome the tough second half of the year we have had to report better earnings across the board,” Gould said.

Bank assets rose to 310.1 billion shillings ($3.65 billion) in September from 281.9 billion shillings in June, the Kenya National Bureau of Statistics said Dec. 21. Domestic credit grew 10.3 percent to 1.48 trillion shillings over the same period, the Nairobi-based agency said.

In the 11 months to November, pretax profits by Kenyan lenders surpassed earnings for the whole of 2010, Business Daily said yesterday, citing statistics from the Central Bank of Kenya. Earnings increased by 5.71 billion shillings to 80 billion shillings, the Nairobi-based newspaper said.

--Editors: James Kraus, Linda Shen

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net


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