Equity Bank Group emerged top in H1’2016 Cytonn Banking Report, supported by a strong franchise and intrinsic value score – the franchise score measures the broad and comprehensive business strength of the company and the intrinsic score measures the upside potential return.
National Bank was ranked the lowest, ranking lowest in both franchise and intrinsic value score.
KCB Group emerged second, dropping one position compared to Q’1 2016 Banking Report, Co-operative Bank of Kenya retained third position, with I&M Bank ranking at position four, up one position from Q’1 2016 rankings.
Barclays Bank fell three positions to position 7, affected by a drop in intrinsic value ranking. This was due to a low expected future growth rate of 2.8% given high competition in the banking sector with its peers being more competitive and innovative in their distribution channels and product offering.
Diamond Trust Bank improved from position 9 to position 5 on the back of a strong loan book growth and coverage policy with the NPL ratio at 4.1% against an industry average of 10.6% with the NPL coverage of 53.9% against an industry average of 35.4%.
National Bank retained the last position overall, ranking lowest in both franchise and intrinsic score. NBK has the highest cost to income ratio of 64.6% against the industry average of 47.1%.
In addition, National Bank has the largest Non-Performing Loans (NPLs) at 42.1% against the industry average of 10.6%, with one of lowest NPL coverages at 18.1% against the industry average of 35.4%.
Being a bank with significant public interest in NBK, with over 70% owned by the Kenyan public, through Treasury and National Social Security Funds shareholding, it is in the public interest that a restructuring be considered to protect and create value for the Kenyan public.
