Category Archives: Coronavirus

Absa Kenya 2019 Financial Results

Absa Kenya released its financial results for the year 2019 a year in which it completed the transition from Barclays to Absa, the third-largest financial services group in Africa.

Financial Performance: In 2019 assets grew by Kshs 50 billion to Kshs 374 billion (~$3.74 billion) which saw Absa Kenya ranked as the country’s fifth-largest bank. Deposits went up by 15% to Kshs 238 billion and loans by 10% to Kshs 194 billion. Income was up 6% over a year ago, and expenses were up 2%. Profit for the year was Kshs 12.2 billion before the exceptional item of the transitions, which continue to have an impact on their financial results, leaving a normalized after-tax profit of Kshs 8.5 billion (~$85 M).

Exceptional costs of Transition: Absa Kenya incurred an exceptional item cost of Kshs 1.5 billion, relating to the transitional services agreement with Barclays for the transition to Absa and which was completed in February 2020, ahead of schedule. During the year the bank completed the migration of over 300 technology systems including its core banking system, financial crimes altering, and card acquisition switch, that were previously housed at Barclays in the UK.

There were also the costs to rebrand 85 branches, over 200 ATM’s and 78 applications used across different platforms of the bank. The “Timiza” banking app now has 3.8 million customers and had lent over 20 billion by the end of 2019.

Investor Gains: For shareholders, the dividend for 2019 will be unchanged at Kshs 1.1 per share, comprising a final dividend of Kshs 0.9 that follows an earlier interim one of Kshs 0.2 per share. This represents a generous dividend payout of 80% of profits and currently, it is the best performing bank stock at the Nairobi Securities Exchange with a return of 39% since 2018.

Corona Virus cushion in 2020: As the world grapples with the impact of the Corona Virus outbreak, the bank has been one of the early champions of the industry reaction to enable Kenyan to continue their daily lives by encouraging customers to take up cashless transactions. Absa Kenya waived all money transfer charges between customer bank accounts and mobile wallets, including on Timiza and Pesalink while also increasing daily transition limits and also will also offer cash back of 0.3% for each use of Absa debit cards.

It also committed to ensuring that all its suppliers are paid within 14 days, with small and medium enterprise (SME) suppliers, invoicing amounts that are less than Kshs 1 million (~$10,000), to be paid within 7 days.

And in line with other banks in the country, under the Kenya Bankers Association, and guided by the Central Bank of Kenya, Absa Kenya has welcomed its customers experiencing financial strains as a result of the pandemic, to initiate discussions on restructuring of their personal and business loans, including the option of a repayment holiday of up to one year, and committed to render such decisions within seven days.

Coronavirus in Kenya: Week One

The Outbreak

  • March 13: The Ministry of Health confirms the first case of coronavirus in Kenya on March 12 from a Kenyan citizen who returned to the country from the USA via London 
  • March 22: Kenya confirms 8 new cases, bringing the total number to 15. It is tracing 363 other people and institutes a mandatory shutdown of major social activities in the country. 

Banking Industry:

  • March 15: President Uhuru Kenyatta appealed to banks and mobile operators to reduce the costs of mobile transactions and calls on Kenyans to use credit cards, mobile money and other forms of cashless payments. 
  • March 16: Safaricom waived fees for M-Pesa payments below Kshs 1,000 (~$10) for 90 days and raises M-Pesa transactions limits to Kshs 150,000 and also increases daily transaction caps and maximum mobile money wallet sizes up to Kshs 300,000 ($3,000). Airtel and Telkom Kenya follow suit a day later. 
  • March 18: Bankers meet the President at State House where the Central Bank of Kenya (CBK) Governor announces that all commercial bank personal loans that were there in good standing on March 2, are eligible for extensions for up to one year while SME and corporate borrowers can approach their banks to be assessed for loan restructuring, with the cost borne by banks. Also, that banks would no longer charge fees for customers to check their bank balances.
  • Different banks announced their compliance with the new rules.   
  • March 19: The Kenya Bankers Association confirms that all banks will assist clients who come in to speak about how COVID-19 has affected their employment or business operations, and whose loan repayments were up to date as at 2 March 2020. They also ask all customers to observe 1-metre (or 3 feet) social distancing at branches
  • March 20: The CBK announces presents Kshs 7.4 billion ($74 million) to the Government to support the coronavirus fight efforts. This it says are the proceeds from the demonetization exercise that concluded in September 2019 and is the sum of (old) Kshs 1,000 notes that were not turned in and which the CBK had classified as being miscellaneous receipts. 

Famous People in Quarantine

  • March 18: Senator for Kericho County Aaron Cheruiyot announces on twitter that he is in self-quarantine. 
  • March 19: Members of Parliament and Parliamentary staff who arrived from London on March 9 are reported to be in self-quarantine. 
  • March 19: Ambassador Macharia Kamau Kenya’s Principal Secretary to the Ministry of Foreign Affairs announces on twitter that he is in self-quarantine after returning from New York. 
  • March 20: Jane Marriott, the British High Commissioner to Kenya announces on twitter that she is in self-quarantine, following her trip to the UK. 
  • March 22: Kenya’s Cabinet Secretary for Health announces that Gideon Saburi, the Deputy Governor of Kilifi County, has been apprehended and put in a mandatory 14-day quarantine after he failed to isolate himself after returning from a trip to Germany. Also that he will be charged in Court after his isolation period. 

Mandatory Quarantine in the Eastern Africa region 

  • March 18: Uganda announces immediate mandatory quarantine for arriving visitors, at their cost.  
  • March 21: Ethiopia announces mandatory for passengers arriving from March 23, at their cost. However, diplomats will be quarantined for 14 days at their embassies, while transiting passengers will be placed in isolation at the Ethiopian Skylight Hotel until they resume their connecting flights.
  •  March 22: Kenya has suspended all international flights other than cargo from March 25. Also, all arriving passengers will undergo mandatory quarantine at a government institution at their own cost. 

Internal country shutdowns

  • March 14: Rwanda closes schools, places of worship, large gatherings, and asks people to work from home. 
  • March 15: Kenya’s President announced the Government has closed all schools, suspended official foreign travel, and will encourage all employees to work from home. 
  • March 18: Uganda closes schools, universities and bars, and bans weddings and religious services for a month. 
  • March 21: Rwanda closes its borders to movement of people and cancels international flights, other than cargo ones. It also suspended tourism and research in 3 national parks where gorillas are found.
  • March 21: Nigeria shuts its airports to international flights as coronavirus cases reach 22.  
  • March 21: South Africa closes its airspace to foreign travelers.
  • March 22: Kenya orders a suspension of religious services at all places of worship, closure of bars and bans gatherings including weddings, and birthday parties. Restaurants are to remain open for delivery services and funeral events are restricted to a maximum of 15 mourners.

Flight cancellations/ Airlines reschedulings:

  • March 17: Kenya Airways updates its schedule, reducing London flights to five times a week, Dubai & Johannesburg to once daily, and Johannesburg to two daily. It also suspends flights to Bangkok, Khartoum, Djibouti & Mogadishu. 
  • March 18: Rwanda announces a halt to all commercial passenger flights into/out of the country on March 20 including operations of Rwanda Air for 30 days. 
  • March 19: Kenya Airways suspends flights to Antananarivo, Bamako, Bangui, Blantyre, Brazzaville, Kigali, Kilimanjaro, Luanda, Yaounde/Douala, and Zanzibar. 
  • March 20: Ethiopian Airlines announces 30 routes closures. The list is not revealed till the next day – and the listed countries include Egypt, Lebanon, Somalia, Djibouti, Namibia, Equatorial Guinea, Cameroon, Chad, Madagascar, Angola, Congo, Mali, Senegal, Rwanda, South Africa, Canada, Spain, Belgium, Switzerland, Indonesia, Israel and all US ones. 
  • March 20: South African Airways immediately suspends all operations until the end of May following a government notice prohibiting the embarkation/disembarkation of non-SA crew and passengers. The only flights that will remain will be domestic service between Johannesburg and Cape Town.
  • March 22: Emirates announces cancellation of all passenger flights from March 25 .. but .. 
  • March 22: Turkish Airlines to suspend most of its flights – leaving just a handful of flights to New York, Washington, Addis Ababa, Moscow & Hong Kong (via AlexinAir).
  • March 22: Kenya Airways suspends all international flights. Cargo flights remain, as will passenger services to Mombasa and Kisumu. 

Corporate Restructuring’s: 

  • March 13: Trading was suspended at the Nairobi Securities Exchange. This came following news of the discovery of the first coronavirus case in Kenya and the main share index dropped by over 5%. Past instances when circuit-et breakers have been tripped include in the period of post-election violence in 2008, and in September 2017, on the day that Kenya’s Supreme Court nullified the results of the August 8 presidential election. 
  • March 13: Kenya’s insurance regulator, IRA, communicates that insurance companies will continue to provide their services to policy holders affected or infected with the virus .. but insurance companies say their re-insurers do not cover pandemics such as Coronavirus. 
  • March 16: Ethiopian Airlines restructuring plans include scaling up cost-saving programmes and asking service providers for temporary relief, discounts and waivers. They have also started to renegotiate all contracts, including aircraft leases as well as scaling down offices and reducing staff.
  • March 16: Java adjusts seating and promotes delivery as do other restaurants. But many other restaurants closed. 
  • March 18: It was revealed that The Standard Group plans to lay off 170 workers. 
  • March 18: Churches to restrict attendance numbers.
  • March 18: The African Development Bank cancels all travels and requires staff to work from home. The Bank’s Board of Directors is reviewing the configuration and design of the Bank’s statutory Annual Meetings originally scheduled for May 26-29, 2020 in Abidjan
  • March 18: Kenyan listed companies and licensed investment schemes that were to host annual general meetings (AGM’s) in March, April and May 2020 have been asked to defer them to later dates.
  • March 20: Kenya Airways CEO sends a memo to staff following COVID-19 and writes that in the last 24 hours, nine countries in our Africa network, the UAE and India have announced travel restrictions. So far, we have reduced approximately 65% of our flights, and this is changing by the hour. He announces that instead of layoffs they will ask staff to take salary reduction and paid & unpaid leave. The leadership team and he will take 75% and 80% respectively, while that for other staff will be 25% or 50% depending on the pay grade.
  • To facilitate supermarket shopping home deliveries, Tuskys has partnered with Sendy and Naivas has partnered with Glovo.

Government Adjustments 

  • March 16: The Ministry of Lands closes all land registries for 28 days from March 17. 
  • March 16: Kenya’s Sports & Culture Ministry closes all museums, archives, stadiums, public libraries, and cinemas for 30 days.
  • March 18: Kenya’s National Assembly and Senate both go on a month-long recess. 
  • March 18: Kenyan courts embraced digital filings and rulings of cases. 
  • March 19: Public health campaign to stop the spread is launched. 

Uplifting News

  • March 21: A thread to help those losing jobs their jobs this week and to help match their skills with part-time or remote-work opportunities. 
  • March 22: The first shipment of medical relief equipment offered by the Jack Ma Foundation arrives in Africa for distribution to different countries. The total will be 500,000 test kits and one million masks had been pledged on March 13.

The End of Social Conventions?

For weeks, investors and the business community have been rattled by massive  disruptions to global supply chains, as factories shut down in China. Everyone from BMW and Mercedes to Apple is feeling the squeeze on account of the coronavirus.

But economies and businesses are not the only ones dealing with disruption. 

Social conventions are adjusting in unprecedented ways.

Yesterday, Italy shut down ALL schools and contemplated banning kissing in an attempt to thwart the spread of the coronavirus pandemic.  The kissing ban may not be necessary. Italians are already voting with their feet and keeping their cheeks at a very safe distance from friends, family members and others.

But Italy is not alone.

In France, where “La bise” is an age-old ritual, kissing friends has always been a rather complicated affair, especially for uninitiated foreigners. Rather than shaking hands, waving hello or hugging, you simply  lean forward, touch cheeks and kiss the air while making a sound with your lips. 

Friends in France tell me that ‘La bise’ could soon go the way of the dodo if the virus known as “COVID19” remains unrelenting.

Here in Abidjan in Côte d’Ivoire, as in many other parts of the world, social conventions are rapidly changing. Unlike the French double blise, Ivorienes, conduct a rapid triple kiss. But they too have become extremely economical with their cheek and air kisses. 

At the African Development Bank, where we have rapidly put a coronavirus contingency plan in place, kisses and handshakes are quickly giving way to fist and elbow bumps, or to no contact at all. Many understandably  prefer an adoring “keep your hands to yourself” stance.

Across town, it is not uncommon to see men and women now tap their feet rather than touch cheeks or shake hands. What first started out a few weeks ago as a  comedic viral video in Asia, has since mushroomed into a full-blown practice in some communities. 

I’ve already been offered the foot of friendship’ several times, so I can testify.

Last night, I was having dinner with a colleague at Indian By Nature, a lovely restaurant off of Boulevard de Marseille in the Marcory district that is a favourite hangout for many in the expatriate community.

Three things struck me. 

One, very visible neon yellow alcoholic hand sanitizers were on full display all around the restaurant. You couldn’t miss them.

Second, everyone … waiters, chefs, and owners kept their hands and cheeks to themselves. 

And third, it would seem that the hand-clasped Hindi ‘Namaste’ greeting could soon become a globally preferred and much safer social norm, in a world battling with a pandemic that has already spooked the media and business world for good reason.

Social conventions have always been arcane arbitrary rules and norms that govern behaviours from kissing, hugging, shaking hands, to bowing. In the age of increasing pandemics, it would seem that old conventions are quickly giving way to the new and the not so new.

For now, stay safe and Namaste!

Dr. Victor Oladokun, is the Director of Communication and External Relations, African Development Bank.