Top-tier lenders KCB, Equity, Co-operative and Barclays topped list of best stocks for investors in the January to March period as surveyed by upstart fund manager Cytonn Investments.
The quarterly report, which analyses the present and future value of the 11 banks listed on the Nairobi Securities Exchange, ranks National Bank and Housing Finance Group the least attractive stocks – unchanged from their overall full-year scores for 2015.
“The analysis covers the health and future performance of the financial institution by highlighting their performance using metrics that measure profitability, efficiency, growth, asset quality, liquidity, revenue diversification, capitalisation and intrinsic valuation,” Cytonn’s chief investment officer Elizabeth Nkukuu said in a statement yesterday.
The underlying value (intrinsic) of a bank, accounts for 60 per cent of the overall score, while its opportunities for future growth (franchise) as reflected in delivery of its strategic plan covers the remainder 40 per cent.
CfC Stanbic dropped to ninth from sixth position in full-year 2015, while NIC Group remained rooted at position eight.
Top-tier Standard Chartered climbed to seventh from ninth in the overall score for 2015 as mid-sized Diamond Trust dropped three places to position six. Growth-hungry I&M Holdings dropped from fourth place last year to fifth in the first quarter.
The loan book for the 11 publicly traded banks rose 13.3 per cent to Sh1.7 trillion in March this year compared with Sh1.5 trillion they posted 12 months earlier.
Deposits hit Sh2 trillion mark, a growth of 11.1 per cent over Sh1.8 trillion in March 2015.
Their assets over the review period rose by 12.0 per cent to Sh2.8 trillion.
The growth, Cytonn said, is largely driven by increased use of alternative channels of distribution such agency, mobile and internet banking in deposit mobilisation and loan disbursement.
The lenders, Cytonn’s investment manager Maurice Oduor said, have responded to the tilting landscape of the market towards convenience and efficiency in financial services.