Kenya: Standard Africa receives approval to acquire bigger stake in Stanbic Bank

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  • Stanbic Bank majority shareholder Standard Africa Holdings Limited (SAHL) has received regulatory approval from the Capital Markets Authority to further extend the exemption from making a complete takeover
  • Under the exemption, SAHL aims to acquire a maximum of 10.6 million ordinary shares in Stanbic to bring its total shareholding to up to 75.0 per cent of Stanbic Holdings’ ordinary shares
  • SAHL first announced the intention to purchase shares from willing shareholders in March 2018 to acquire 59.0 million ordinary shares at a price of KSh 95.0 per share

Standard Africa Holdings Limited (SAHL) has received regulatory approval from Kenya’s Capital Markets Authority (CMA) to acquire a bigger stake in Stanbic holdings.

Standard Africa Holdings Limited (SAHL), which is the majority shareholder in Stanbic Holdings, said it received regulatory approval from the CMA to further extend the exemption from making a complete takeover.

Under the exemption, Johannesburg Stock Exchange (JSE) listed company aims to acquire a maximum of 10.6 million ordinary shares in Stanbic to bring its total shareholding to up to 75.0 per cent of Stanbic Holdings’ ordinary shares.

SAHL first announced the intention to purchase shares from willing shareholders in March 2018 to acquire 59.0 million ordinary shares at a price of KSh 95.0 per share.

SAHL had acquired 48.4 million shares, translating to a success rate of 82.0 per cent hence the application for an extension.

The move will be the second time SAHL requests an extension to purchase Stanbic’s shares.

SAHL’s shareholding has since increased to 72.3 per cent as of December 2021, from 60.0 per cent in December 2017, with a target of up to 75.0 per cent.

The move by Standard Bank Group through its investment vehicle SAHL to increase its shareholding in Stanbic Holdings affirms the importance of Stanbic Holdings to the larger group and confidence in its future growth.

Analysts from Cytonn Investments say they expect the move to boost investor confidence in the Kenyan Banking Sector, which has continued to rally from a harsh business environment following the COVID-19 pandemic.

Stanbic Bank, a subsidiary of Stanbic Holdings, has continued to post a positive performance, posting an increase in Profit After Tax by 43.2 per cent to KSh 5.1 billion in the third quarter of 2021, from KSh 3.2 billion in a similar period in 2020.

During the period, return on average equity increased to 15.8 per cent from 12.0 per cent.

“In our view, we expect further activity share repurchase and buyback activity in the bourse from companies whose prices and valuations are currently low.”

The analysts also said that the move by the CMA to allow for exemptions from making full takeovers is also commendable as it allows for investors to increase their shareholding by carrying out on-market trading to acquire a higher stake to having to acquire the entire entities.

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Contribution to the Kenyan society

In 2021, the bank revealed it had massively contributed to driving Kenya’s economic growth in seven key areas among them education, job creation and enterprise development.

Stanbic holdings.

In a report, the bank said it restructured loans to the value of KSh 40 billion, extended repayment holiday to 7,203 clients and lowered interest rates saving customers KSh 665million.

On infrastructure, trade and investment, the bank said it issued KSh 1 billion as guarantees in support of transportation infrastructure development.

In the field of trade and investment, the bank provided unsecured short-term financing for trade to Small and Medium Enterprises (SME’s) backed by KSh 1 billion in secured guarantees.

“Over the last year, the bank has been on a deliberate journey to improve the livelihoods of many through the launch of the Stanbic Kenya Foundation. The Foundation has achieved significant milestones along the way and made an impact in Education, Job Creation and Enterprise Development, through the launch of the Accelerate Programme.”

The bank’s programme seeks to position Kenyan businesses for success by providing individuals and enterprises with digital literacy and career development training, as well as funding and access to job markets.

So far, over 21,000 SMEs and individuals have benefited from the programs and are able to position their businesses better in a digital world.

Stanbic said the feat was achieved through a Public-Private Partnership between the Stanbic Kenya Foundation, the Ministry of Industrialisation, Trade and Enterprise Development and Microsoft Kenya.

Through their Financial Fitness Academy (FFA), the bank has supported individuals and SMEs to understand how to better manage their wealth.

The bank partnered with Microsoft and established the e-learning platform for community training and up-skilling people who have lost jobs due to COVID-19.

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Wanjiku Njuguna is a Kenyan-based business reporter with experience of more than eight years.

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