Kenya: Barclays, KCB Chiefs Acquire High Stakes In Their Banks

VENTURES AFRICA – Charity begins at home. The saying can be likened to the move made by the Chief Executives of Barclays Bank of Kenya, Adan Mohamed and KCB Group’s Martin Oduor-Otieno; who have bought substantial shares from their companies to show confidence in the financial outlook of their companies.

According to the annual reports of the two banks, both leaders acquired shares from the company last year.

Barclay’s Chief, Mohammed bought 296,000 shares which worth Sh4billion ($47.4 million ), while kCB’s Oduor-Otieno acquired 509,180 shares valued at Sh12 million ($142,349). This make both of them top shareholders among the lenders’ Directors and Executives in their respective banks.

Although, analysts see the insider buys as symbolic, the shares they both hold pales in comparison to what the CEOs of Cooperative and Equity hold in their banks. Equity’s Chief Executive, James Mwangi owns 127.7 million shares which equals to 3.45 per cent of the bank, while his counterpart at Cooperative Bank, Gideon Muriuki, holds 50.1 million shares or 1.43 per cent of the company.

“Few people are better placed to evaluate a company’s prospects than those who actually run it, which is why many investors regard directors’ share dealings as a key indicator of future prospects,” an Analyst at Kestrel Capital said.

“The CEOs of KCB and Barclays Bank were more keen to demonstrate this fact through their share purchases.”

Although it is not clear where the KCB Group’s chief bought his own shares, Mohamed is believed to have bought the shares through the Nairobi bourse since the bank does not have an Employee Share Option Scheme (ESOP).

The move by Mohammed to purchase the company shares came a year after he expressed his intention to quit the bank on applying for the post of the commissioner-general of the Kenya Revenue Authority (KRA).

Barclays Bank used to be Kenya’s most profitable bank, but it lost its position to Equity Bank and KCB last year and now Standard Chartered Bank overtook it in profitability in the three months to March this year.