Monthly Archives: January 2005

Away from politics, talking points for Monday

If you’re still earning less than 2% on your savings accounts or fixed deposit accounts (rates dipped in 2003, and early 2004), you should ask your bank or branch manager to raise it or you’ll take a walk. With treasury bill rates at 8%, and banks lending at around 17%, you should be able to earn at least 5%. Standard Chartered, in the Friday newspapers proclaimed, “You deserve a raise” as they trumpeted rates of up to 5.5% for 12 months and 7.2% for 24 months. Other banks are expected to follow suit, but more quietly.

Since Equity Building Society got their license and converted into a bank, they have now walked away from their offer to buy out Daima Bank (in statutory management). They had earlier offered to buy Daima for 220 million (and also assume Daima’s 800 million debts). Still, according to the Sunday Standard, a deal to revive Daima should be completed in February 2005 with another investor.

Prime Bank has signed on to sponsor the main series of golf events in Kenya known as the “festival of golf.” This year the festival will comprise 18 tournaments around the country, with the finals to be on September 3 at Leisure Lodge Mombasa (a sister company of Prime Bank).

Groups sue City Council over service delivery

Entrepreneurs in Nairobi have sued the City Council and the Attorney-General (AG) for failing to deliver services and to account for taxes collected daily. “Specifically, it has failed in the provision of the following basic services and amenities: water and sewerage, garbage collection, roads and street lighting, education facilities, health facilities and housing facilities,” the plaint said. The AG has been sued on behalf of the Minister for Local Government who is alleged to have failed to either compel the council to discharge its responsibilities of providing basic services or by performing the duties himself.

Also, the Kenya Anti-Corruption Commission (KACC) lists their success over the past year. These include: the conviction of former National Aids Control Council boss Margaret Gachara, the bringing to court of chief executives of eight parastatals on charges of irregular deposits of public funds in Euro Bank, fraud cases against former Kenya Seed Company managing director Nathaniel Tum and other officials, corruption cases against four policemen attached to Nairobi’s Kamukunji station and another against Goldenberg scandal chief suspect Kamlesh Pattni, accused of trying to bribe a judge. Some 3,552 complaints were received by KACC between 2003 and 2004, and it investigated 242 cases in its mandate and handed over the others to the relevant agencies for action. It took no action on 229 others and has 256 cases pending before it.

Banking News

International

Riggs Bank will pay a $16 million fine (1.3 billion shillings) to avoid being prosecuted for failing to monitor suspicious financial transactions. The settlement will enable the Bank to complete a merger with PNF financial services, but will also sacrifice Kenyan banker Simon Kareri in the process. “Riggs will continue to cooperate with investigators as they pursue some former executives, and the agreement allows federal prosecutors to bring separate criminal charges against them.” The agreement will include descriptions of several transactions involving Equatorial Guinea (Kareri’s portfolio) and officials of that West African country, including its president, a dictator accused by human rights advocates of pocketing much of that nation’s $500 million a year in oil revenue, sources said.

The guilty plea is a rare one for a commercial bank. In recent cases of criminal settlements with the Department of Justice, banks have agreed to what is known as a deferred prosecution. That means the bank pays a fine but does not technically plead guilty — agreeing instead to certain facts that could result in a prosecution in a period of one or more years if the bank fails to make good on its commitments to clean up its act.

Local

Following in the successful steps of Equity Bank, Family Finance Building Society announced plans to convert into a bank. They have a customer base of 60,000 and 12 branches, and will become the third microfinance institution after Equity and K-Rep to become a full commercial bank.

The European Investment Bank will open a regional representation office in Nairobi by April 2005. It will be third such office on the continent, after Senegal and South Africa, and will serve East and & Central Africa – giving potential investors a point of contact and advice on EIB operations and financing availability within the region.

Standard Chartered Bank has raised its base-lending rate to 13.75%

National Bank of Kenya

The oft-rumoured about Bank launched a new slogan yesterday, and are now – “the bank where you belong.” In addition, Finance Minister Mwiraria, in his capacity as main shareholder, announced further plans to restructure the bank. At the urging of the World Bank, banks (incl. NBK with Kshs. 17 billion) will transfer all their bad debts (non-performing loans) at a fraction of their value to a new bad debts agency that will then collect future the payments – thereby clearing up the bad debt problem off a bank’s books. However, one problem is that until Kenya’s judiciary is fully straightened out, borrowers (with bad loans) can tie up banks (and the new agency) in court in a bid to stave of payment or sale of their assets. Also Banks are loathe to admit that they made bad investments and don’t want to get short-changed when they sell them off. The Minster also indicated that the Government plans to sell off its 24% stake in NBK by December 2005

Jobs

From the Wednesday Standard, Jan 26.

The giant audit firm PriceWaterhouseCoopers is seeking:

1. An Associate Director; Must have undergraduate degree, preferably an MBA or CFA, as well as relationship management skills and contacts across East Africa.

2. Manager-Infrastructure Finance: Must have undergraduate degree, preferably an MBA or CFA, as well as project and client management skills.

Write to recruitment.ke@ke.pwc.com by Feb. 7 2005

Banking consultant

To advise on banking laws and setting up of an Islamic bank in Hargeisa. Should be MUSLIM candidate, and preference will be given to Somali nationals. Must have university degree, with CPA or CAIIB, minimum of 10 years banking experience, and be less than 50 years old.

E-mail to dsh_fc2004@yahoo.com

Africa Banking Corporation: Graduate Devt. Program

The African Banking corporation is recruiting candidates for 4-month training program. Candidates will be exposed to all aspect of banking during training, with the possibility of working with the Bank after completion for top performers. Must be fluent in English, be below 26 years and have attained a degree of any kind, with a minimum 2nd upper class.

Send detailed CV by Jan 31 1005 e-mail to abcmail@africanbankingcorp.com ref: “”human resources – graduate trainee program”

(Note even though they have seven branches in Kenya, they appear to be looking for candidates from Tanzania, Mozambique, Zimbabwe, Zambia and Botswana – but Kenyan’s should apply anyway!)