Author Archives: bankelele

Top Imperial Bank customers to receive 35% of deposits

The Central Bank of Kenya (CBK) and the Kenya Deposit Insurance Corporation (KDIC) announced the conclusion of the Imperial Bank receivership that will probably not satisfy customers who still had vast sums deposited at the bank that was suddenly closed in 2015.

KDIC and CBK announced they had accepted a modified biding offer from KCB, Kenya’s largest bank for Imperial Bank (in receivership) that comes with a payment of 12.7% of the balances that were owed to the remaining depositors.

Since receiving a first payment three years ago through KCB and Diamond Trust banks, of up to Kshs one million ($10,000), that took care of most of the small depositors, further payments have been availed to larger depositors. But with the acceptance of the offer today, they will have only accessed 35% of the deposits they had at Imperial when the bank was placed under receivership, with the balance of their deposits now uncertain. A loan verification process will be done through the first quarter of 2019 after which depositors may be able to receive more of their funds

The collapse of the bank started in the days after the sudden death of its Managing Director, after which revelations of fraudulent accounts he managed, secret off-the-book loans, and fishy undocumented cash transfers came to light. There are some court cases ongoing against the top managers of Imperial Bank. As for bondholder at Imperial, their payment is also uncertain, and the collapse of the bank has had effects on the local corporate bond market.

See also the great series on The Sack of Imperial Bank.

New Generation Coins in Kenya

This morning at the Central Bank of Kenya, President Uhuru Kenyatta launched a new generation of coins in Kenya.

This follows the 2010 constitution which barred the image of any person, (Notes and coins issued by the Central Bank of Kenya may bear images that depict or symbolise Kenya or an aspect of Kenya but shall not bear the portrait of any individual) appearing on Kenya’s currency, a practice that has happened since independence, primarily with images of the first and second presidents’, Jomo Kenyatta and Daniel arap Moi.

The main theme of the coins, which the President said is “Kenya reborn and prosperity” follows the conclusion in October, of a series of long-running cases that had held up the procurement and printing of new currency by De La Rue.  The President said that the new currency has features that make them accessible to visually impaired people.

CBA and NIC to merge

The boards of NIC Group and Commercial Bank of Africa have announced preliminary plans to merge. This follows talks that had been reported as far back as January 2015.

The move is driven by a need to consolidate capital and liquidity with new technology opportunities to provide more services to customers and grow returns for shareholders.

The merger of the eight and ninth largest banks in the country will result in a banking institution that will be the second or third largest by assets, behind KCB and Equity.  As of September 2018, NIC and CBA had a combined asset base of Kshs 443 billion ($4.3 billion) and Kshs 9.3 billion in pre-tax profits. 

CBA is already the largest bank by customer numbers thanks to M-Shwari, its partnership with Safaricom’s M-Pesa that had over 21 million customers last year.

More details will come later and NIC is listed on the Nairobi Securities Exchange.

Kenya’s Money in the Past: Diplomatic Engagement

This week saw the publication of “Kenya’s 50 years of Diplomatic Engagement, from Kenyatta to Kenyatta,” a book on the history of the diplomatic services and foreign policy in Kenya.

Edited by Dr. Kipyego Cheluget, Kenya’s Assistant Secretary General at COMESA, it is a collection of writings by different authors including foreign ambassadors. It is the result of a nine-year journey that came from an idea that came when he was Director of the Foreign Service Institute – to document the history of the diplomacy in Kenya. And he then set out to travel around the county, interviewing and recording former ambassadors and diplomats such Munyua Waiyaki, Njoroge Mungai and even unofficial ones like politician Mark Too. Some of them have since passed away like Bethuel Kiplagat and Phillip Mwanzia, and whose widows were present at the book launch.

The Chief Guest was Former Vice President, Stephen Kalonzo Musyoka who has also served as a Minister for Foreign Affairs and Minister for Education and he said that to upgrade Kenya’s  diplomatic performance, the country should reward career diplomats and have them, not election losers, as Ambassadors, and legislate a 70:30 ratio of professionals over politicians in such posts, a reverse of the current imbalance. The event had panel talks with former ambassadors on topics like peace-building in Ethiopia, Somalia and the East African region, using sports as a tool of diplomacy, combating apartheid, the lost years of engagement with Russia shaped by the Cold War and how the pioneering diplomats worked through trial and error for decades without an official foreign policy.

The MC for the event at Taifa Hall of the University of Nairobi, Nancy Abisai said the only good books is a finished book, and Kenya’s Cabinet Secretary for Education Dr. Amina Mohamed, added that, following a challenge by President Kenyatta, her Ministry was in the process of setting up a unit for the publication of Kenyan memoirs and which would be operational by January 2019. Former Vice President Moody Awori, who at 91 is still an active Chairman of Moran, the publishers of the book, said they were looking for more scripts to turn our more such books.

Excerpts from early sections of the book and launch

  • It has never been right to say that Kenya’s foreign policy is a “wait and see” one. Diplomats were able to negotiate to host a combined World Bank/IMF meeting in 1973 and for UNEP to have its headquarters in a newly independent African country – Ambassador Francis. Muthaura.
  • Njoroge Mungai initiated steps for President (Mzee) Kenyatta to be nominated for the Nobel Peace Prize in 1972 and Singh Bhoi drafted the dossier.
  • Dennis Afande opened the Kenya Embassy in Jeddah, Saudi Arabia in February 1977. He was the only employee there for four months and the only signatory to the Embassy bank account for the period.
  • When Paul Kurgat went to apply for his scholarship visa at the Nairobi Russian embassy, in 1984. he was arrested and questioned about links to Oginga Odinga. He was later to return to Russia as Kenya’s Ambassador in 2010.

The book is available in local bookshops, such as the University of Nairobi one, at a cost of Kshs 1,395 (1,200 + VAT) and a digital version is also available on Amazon for $8 (~Kshs 800).

Idea Exchange: Bloomberg and Reuters financial journalism training

Bloomberg: The Bloomberg Media Initiative Africa Financial Journalism Training program has resumed. After four years of training financial journalists in Kenya, South Africa and Nigeria, the BMIA now moves on to Ghana, Zambia, Tanzania, Cote d’Ivoire and Senegal.

In the first part of the new phase, participating universities are the Ghana Institute of Journalism and University of Ghana Business School in Ghana, and the University of Zambia and University of Lusaka School of Business in Zambia. That does not mean journalists from other countries are excluded, but they have to travel to physically attend classes at the local universities,  that run from January 2019 to June 2019, for two weeks in each month.

AMIB50 chart by Bloomberg

The program is worth about $22,000 and is greatly subsidized by Bloomberg Philanthropies and the Stavros Niarchos Foundation, with the students not expected to pay more than $250. Students must also have a laptop computer and commit to attending all the classes. For the duration of the class, they also get prized access to the Blomberg terminal, an invaluable information resource for researching global financial markets. The deadline for applications is November 30. 

Reuters: The Reuters Journalism Training Programme – EMEA targets early journalists, with not more than three years experience, to undertake a nine-month training program, that includes with one month in London, and on the job training in bureaus in Africa, Europe and the Middle East.

Applicants must have an interest in issues that affect companies, markets and economies and there seems to a preference for journalists with experience in areas like banking, financial analysis, accounting, law or computer science. The deadline for applications is November 30.