(Ecofin Agency) - The Kenyan tycoon Baloobhai Patel increased almost fourfold his stake in the Cooperative Bank of Kenya (CBK). According to a statement of the bank, M. Patel who previously held 5.8 million shares in February, 2017, now has 25.2 million shares.

Doing this, Patel upped his interests in CBK to 0.43% and becomes the second largest individual investor behind Gideon Muriuki, current chairman of the bank, who holds 2.05% of the bank’s capital.

This investment might surprise at a time where the banking sector is facing many challenges. Especially since CBK has recorded a poor performance over the first 9 months of 2017. Its net income at the end of September, 2017, slumped by 9.05%, compared to last year, to stand at Ksh9.5 billion ($92 million).  A performance resulting from lower interest earnings, an increase of bad debts, which have led to higher risk provisions.

Moreover, the entry into force, in January 2018, of new standards for risk provisions (IFRS9), might pull down many banks’ revenues. Well, the Kenyan tycoon seems not to be dismayed by this as he has many interests in the finance sector. Truly, he is a shareholder in Barclays Bank Kenya and Diamond Trust Bank Group. Also, CBK has well defended its profitability with a return on equity that remains close to 18%.

Chamberline Moko