A glance at the latest report from the deposit protection fund, omits two Shariah banks licensed this year – (Gulf African and Family Community) from the list of institutions whose deposits are protected by the deposit protection fund (DPF)
A further reading of Islamic banking indicates that such banks guarantee depositors funds – but then don’t all banks do that?
Opposition MP’s in Parliament yesterday appeared to shoot down a proposal by the Government requiring commercial banks to have a minimum share capital of 1 billion shillings ($14m) by 2010 – up from the current minimum of 250 million shillings.
This has been seen as likely to cause several smaller banks to merge or be absorbed into larger entities. So for at least, another year, the barriers to entry to the banking sector remain low.
all banks share capital raised from 250 million to 1 billion. At the beginning of the year, 25 of 43 banks were below this mark (with 7 banks below 500 million). This is an update/reversal of an older proposal to lower the share capital when some banks were struggling a few years ago. Not many mergers expected though it may prompt some mid size banks to go for a public listing to raise cash (only 3 banks lost money last year)
Central bank has advertised for some currency destruction contracts as the east African reports on talks for the government to invest in the current currency supplier DE La Rue
Diamond Trust to venture into Islamic Banking
East African Development Bank profit went up by 229% to $4.6 million – up from $1.4 million the year before. Assets increased to $262m dollars and their non-performing portfolio reduced by 11%
Equity bank won an international award – the 2007 global vision in microfinance award. Also KTN reported that the that the bank will open three women only branches in Nairobi
Two month old Family Bank is seeking a new managing director
KCB to expand into Uganda as it also wins an international award – the Africa investor for best performing stock in Africa award (shares price up 97% ) > but the company also held one of the longest dreariest AGM’s in history on Friday
National bank finally got recapitalized. NBK could receive 346 million in 2007 and 2008, a bullet payment in 2009 of 4.3 billion, 220m in 2010 and 2011 and another bullet payment of 5.2 billion in 2012. For 2013 – 2015 123m each and in 2016 a lump sum of 5.2b. 2017 to 2020 58m each and a final payment of 6 billion – for a total of Kshs. 22.48 billion ($340 million)
NIC to increase authorized share capital via a rights issue. The board approved it on June 14, but there was no mention at the AGM on May 16. This follows a Fitch Report indicating that mid-size Kenyan banks need to increase their capital
opportunities
East African breweries is accepting applications for a graduate management program. Details online and D/L is 22/6
Family bank: chief executive officer, credit manager. Apply through deloitte – esd@deloitte.co.ke by 29/6
Kenital solar : sales & marketing manager, technical manager, engineer sales executives (5) regional managers (4). Apply to cm@kenital.com by 22/6
Country manager at Steadman Tanzania . Apply to janis@steadman-group.com by 22/6
A dozen IT, research and engineering jobs at Safaricom
Writers at a new Swahili newspaper. Apply to gazetijipya@gmail.com
Project management specialist at USAID.apply to hrnaiorobi@usaid.gov
Rhodes scholarships: 2 for Kenyans to pursue full time post graduate study at the University of Oxford. Apply to rhodeskec@wananchi.com by 15/9
Real estate: for the monied in the Diaspora, those who have worked hard and are looking to return in style, consider investing in Kihingo village a gated community development in Kitusuru where prices start at $500,000.
New changes to banking act forbid banks’ from imposing charges on savings account holders as long as they maintain the minimum balance. This will promote a culture of savings, which is important even as real savings rates are negative.
(Here’s a snapshot (PDF) of some of these charges from 2 years ago
This week, I closed a savings account because, when I got my (half-yearly) statement, I realized that they had been charging me 200 shillings ($2.9) a month. Even as I opened a different savings account within the same bank, the account rep. said, despite my protests, that the new savings account would attract a 25-shilling per month fee. I also got dinged 300 shillings for transferring the account.
No bank has yet come out and declared how they would abide by the new rules, but it takes long to right a ship and it will probably take a few months to rework their savings products with new brochures, IT codes & account parameters.
Of the last few years savings accounts have become hybrid account that have ATM cards, visa cards, electronic banking & SMS access etc. – all of which banks could extract a fee for the extra services to account holders.
To comply with the changes, banks are likely to come out with plain, no frills savings accounts. They will adjust the minimum fee appropriately but have no more ATM cards or extras – just money sitting in the bank earning intrest, and not reduced by bank charges.
The banking amendment act (2006) and finance act (2006) were gazetted in January 2007. Some changes that will affect the banking system in a busy year, in addition to possible merger activity, include;
– Ban on bank charges within savings accounts. In fact banks must pay interest as long as the account minimums are maintained
– Section 44A (in duplum rule) – banks can only recover principal amount lent, interest to an amount not exceeding principal, and recovery expenses from bad debts. (Fortunately for banks this will not be applied retroactively)
– CBK gets a deputy governor appointed by the president
– CBK also gets to vet the professional and moral suitability of owners (of more than 5%), directors, and senior managers of banks
– All banks must get permission from the finance minister to open branches or establish subsidiaries outside Kenya
– Banks are allowed to invest in real estate. They can also hold land for as long as it takes to realize/recover debt
– Allows sharing of non performing assets information with the Central bank, others banks and credit reference bureaus