The Philip Ndegwa family has acquired an additional 31.6 million shares of NCBA Group, with a current market value of Sh1 billion, solidifying their position as the leading shareholder in the bank, surpassing the Jomo Kenyatta family.
Through their investment vehicle, First Chartered Securities, the Ndegwas have increased their stake in NCBA to 14.44 percent, valued at Sh8 billion as of December 2022, according to the latest annual report of the company. This represents an increase from their previous stake of 12.52 percent.
In contrast, the Kenyattas’ investment vehicle, Enke, maintained its ownership at 13.2 percent, valued at Sh7.4 billion.
The Ndegwa family has been long-term investors in NCBA, starting from their substantial capital investments in NIC Group and CBA Group, which merged in September 2019 to form the Nairobi Securities Exchange-listed bank.
The expansion of First Chartered’s holdings has also had a positive impact on the personal portfolios of NCBA directors and brothers, James Ndegwa and Andrew Ndegwa, who are beneficiaries of the investment vehicle. James’ direct and indirect ownership in NCBA increased by 5.55 million shares, currently valued at Sh188.7 million, to a total of 75.2 million shares, equivalent to a 4.57 percent stake.
Similarly, Andrew’s ownership rose by 5.57 million shares, currently valued at Sh189.1 million, to a total of 76.3 million shares, representing a 4.63 percent equity. Together, the brothers witnessed a growth of Sh377.8 million, with their portfolio now valued at Sh5.1 billion. Most of the additional share purchases by First Chartered were completed in the last quarter of the previous year.
The increased investment by the Ndegwa family comes at a time when NCBA’s performance has shown improvement following the merger, allowing the bank to establish a larger and more profitable business in a market where size plays a significant role in the industry’s profitability.
“The financial outcomes across the group, three years post-merger, are a clear demonstration that we are on track with our strategic priorities and have successfully built a bigger and more profitable business,” stated John Gachora, CEO of NCBA, in the annual report.
NCBA’s earnings, profitability metrics, dividend payouts, and market value have all experienced positive growth, benefiting long-term investors, including former shareholders of NIC Group, who collectively hold a 47 percent ownership stake in the merged entity.
The market value of NCBA currently stands at Sh56 billion, a substantial increase compared to the Sh17.7 billion held by NIC in the year ended December 2018, marking a gain of Sh8.5 billion or nearly 50 percent expansion of paper wealth for former NIC investors alone. NCBA’s net profit grew by 35 percent to Sh13.7 billion in the year ended December 2022, accompanied by a record dividend payout of Sh7 billion, equivalent to Sh4.25 per share.
This remarkable dividend payout represents a distribution ratio of 50.8 percent, more than double the 20.8 percent distribution of net income prior to the merger. Furthermore, NCBA’s return on shareholder funds improved to 17.1 percent in 2022 from the 12 percent recorded in 2018.