Friday, March 29, 2024

CFC Stanbic best stock to invest in, Housing Finance, NBK worst counters – says Cytonn report

CFC Stanbic Bank has been ranked as the best bank likely to deliver the best return over the long-term, 3 to 5 years, and which has the best franchise value. This is according to a market report prepared by Cytonn Investments on the 11 banks that are currently listed on the NSE.

Speaking on the CFC Stanbic number one ranking, the report seen by Bizna noted: “They have a lot of businesses that are mainly lucrative that means that even in a time the economy goes down and people are suffering from bad loans. CFC is also highly efficient and they are strong on corporate clients. They get a lot of money for every branch they open. They are attracting deposits so much that they have enough room to lend compared to other banks who engage in expensive deposit mobilization strategies.”

Further, according to this analysis, Housing Finance and National Bank of Kenya have been ranked as the worst investors could bet their money on. Shareholders at Equity however stand to get the best return as the bank was best on ROACE followed by I&M bank.

 

Key Banking Metrics
Bank Total Score Rank
CfC Stanbic 58 1
I&M Bank 59 2
Standard Chartered 61 3
Equity Bank 63 4
KCB 65 5
Diamond Trust Bank 67 6
Co-operative Bank 69 7
NIC Bank 70 8
Barclays Bank 75 9
National Bank of Kenya 100 10
Housing Finance 104 11

The report nonetheless was quick to note that Housing Finance differed in business dimension from the other commercial banks. “It is worth noting that HF is more of a mortgage finance specialty lender funded through expensive wholesale deposits and bonds, rather than a traditional bank, hence the poor ranking,” said the report.

The analysis covered the long-term investment and, or franchise attractiveness of the banks by looking at among others, net interest margins, return on average common equity, price/earnings growth ratio, loans to deposit ratio deposits per branch and price to tangible book value.

 

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