Kenyan billionaire Baloobhai Patel buys big, now owns more than 1 percent of Absa Bank

Kenyan billionaire Baloobhai Patel has strengthened his presence in the financial services sector by acquiring an additional 5.8 million shares in Absa Bank Kenya, pushing his stake above one percent as of Dec. 31, 2023.

Disclosed bank filings reveal that Patel, along with his wife Amarjeet B. Patel, now holds 55.86 million shares in Absa Kenya. This translates to a 1.03-percent stake in the lender, which remains majority-owned by South Africa’s Absa Group.

Patel’s recent purchase represents an increase from his previous holding of 50.06 million shares, which amounted to a 0.92-percent stake, on July 1, 2023. The acquired shares hold a current market value of approximately Ksh75.4 million ($0.56 million).

Patel’s Growing Absa Holdings

Formerly Barclays Bank Kenya, Absa Bank Kenya offers a range of financial services, including retail banking, corporate banking, treasury, and card services. The bank has a particular focus on supporting Kenyan businesses, especially SMEs.

Patel’s latest acquisition reflects a significant year-on-year increase in his Absa holdings. In December 2022, he held 47.57 million shares (0.88-percent stake). This translates to an overall acquisition of 8.3 million shares in the past year.

Absa’s share price has gained 11.79-percent year-to-date, leading to a Ksh75.4-million ($0.56 million) increase in the value of Patel’s holding within the first four months of 2024. At the current price level, Patel’s stake in Absa is worth Ksh715 million ($5.32 million). Notably, the shares acquired in the past year alone are now worth Ksh106.2 million ($0.79 million).

Patel’s Diversified Portfolio

The Nairobi-based businessman Baloobhai Patel is known for his diversified portfolio, holding stakes in other listed Kenyan companies such as Co-operative Bank, Carbacid Investments, Bamburi Cement, Sanlam Kenya, and CIC Insurance Group. He also has investments in real estate.

Patel’s stake in Co-operative Bank increased to 1.29 percent by year-end 2023, following the purchase of an additional 35.2 million shares in the prior year. This holding is currently valued at Ksh1.04 billion ($7.74 million).

Dividend Windfall Possible

Both Absa Bank and Co-operative Bank have proposed dividend payouts, potentially generating significant returns for Patel. Absa proposed a final dividend of Ksh1.35 ($0.01) per share, on top of the Ksh0.20 ($0.001) per share paid in October 2023.

This translates to a potential pre-tax dividend payout of approximately Ksh75.4 million ($0.56 million) for Patel upon the final distribution, scheduled for around May 23.