Category Archives: Transnational Bank

Corporate Brief’s this Week

Banking Bill dead?
The Banking (Amendment) Bill 2004 which has been deferred, may be doomed, in that politicians have taken the rhetoric down to imperialist (foreign banks destroying indigenous business) and tribal (banks are persecuting Central Province mainly) levels. After Finance Minister David Mwiraria heard the views of Members, he decided to defer debate to a later day. The House was unanimous it would not be in the interest of the nation for banks to retain the “illegal” interest they have been charging Kenyans. MP’s want the ‘in duplum’ rule to be back-dated to 1990, while the President wants it to begin in 2004. This will wipe out entire bank portfolios and cause several of them to shut down.

Mystery Solved
2004 Profit at Transnational Bank jumped to an astounding 1 billion shillings from 100 million in 2003. This came about from the sale of Alico Insurance to Heritage AII earlier in the year – and Transnational Holdings owned 1/3 of Alico netting a profit of 1.034 billion from the sale.

Name Change
Firestone Ltd shareholders approved a name change and the company will now operate as “Sameer Africa Ltd.” Does this mean new business ventures?

Fibre Nairobi
Walking around Nairobi, you may have tripped or almost fallen into a ditch that cuts across the pavement. It’s just Kenya Data Networks (a Sameer company) continuing to build its fiber-optic network around Nairobi.

Missing taxes
Nakumatt stores are being investigated for tax evasion, according to a Minister in Parliament.

No Sugar
A sugar shortage is taking hold around Kenya. Meanwhile all Kenyan sugar factories are shut for annual maintenance and imported sugar is rotting at the Mombasa port as traders argue with KRA over how much duty is to be paid. Shoppers are being limited to 1 or 2 kg per person, per day.

You don’t have to swim
Kenya Ferry Services assures Kenyans that their ferries crossing Likoni (Mombasa) never capsize and are 100% buoyant despite the frequent mechanical breakdowns.

Fare increase
Kenya Railways have announced that they will raise their freight costs by 20% and passenger fares by 30% effective May 2005. However the move has been opposed by the Kenya Association of Manufacturer’s and other groups who say that the poor service that KR currently provides does not warrant an increase in fares.

Calendar
April 21: East African Cable AGM at Holiday Inn, Westlands
April 26: (AGM) British American Tobacco AGM
April 29: (TPS) Serena AGM

Bank Jobs

Managing Director: PostBank
Previous MD, Esther Koimett, was appointed the new Investment Secretary, and now the Kenya Post Office Savings Bank is looking for a new managing director. The Bank is seeking a banking license to enable it to lend money to the public and also wants to sever its links to the Post Office network in Kenya.

Applicants must have a bachelor’s degree in business, finance or accounts, with an MBA in Finance or Strategic Management. Also 5 years senior management experience in a bank, finance or micro-finance institution. Apply by April 8, ref MDBP/32/05, to esd@kpmg.co.ke or Executive Selection Division, KPMG Kenya, P. O. Box 40612-00100.

Branch Manager: Transnational Bank
Reporting to the CEO candidate must be aged 35 – 45 years with professional banking qualifications as well as 7 years senior management experience (incl. 4 years in corporate credit)
Apply by April 1 to the Human Resource Manager, P. O. Box 75840-00200, Nairobi.

Bank Round-Up

National Bank of Kenya
NBK’s net profit went down from 404 million to 383 million, mainly as a result of increased provision for bad debts – the bank provided 1.7 billion, up from 1.6 billion in 2003. The Bank has so far provided for 12 billion of its 17 billion bad debts portfolio.

The main component of their profit was an increase in foreign exchange income from 92 to 274 million. During the year loans to customers increased from 21 to 24 billion, and customer deposits increased from 20 to 22 billion. It is still not an efficient Bank – given that with assets of 30 billion, it only returned a profit of 300 million – and still can’t pay a divided as it must re-coup its losses of previous years first. The Bank received capital from the Government of 500 million, but has zero shillings in government securities. Shares in NBK are trading at 19 shillings (in the last year, low has been 13, & high has been 36 shillings) on the Nairobi Stock Exchange.

Transnational Bank
The most unusual result comes from TNBL where after tax profit increased 10X from 118 million to 1.04 billion in 2004. Customer deposit s more than doubled, from 523 million to 1.2 billion, while loans increased from 685 to 876 million. The staggering profit comes from other income of 837 million during the year – probably a write back as someone paid of a big political loan that had been written off.

Fina Bank
Fina is the only major bank, so far, to declare a loss for the year ended (42 million, down from a 75 million profit in 2003). The main component of the loss was an increase provision for bad debts from 88 to 205 million. Also staff costs and operating expenses increased by 33 and 50% respectively (both at about 130 m), while deposits and loans remained relatively unchanged at 5 and 2.6 billion respectively.

Stanbic
Standard Bank of South Africa, which was the only major bank to declare a loss in 2003 (104 million), turned things round in 2004 to return a profit of 118 million. It appears to have been saddled with some unprofitable loans in 2003, because in 2004, interest income increased from 183 to 368 million. Also it reduced is investment in government from 3.1 to 1 billion during the year, and shifted the funds to customer loans, which went up from 4 to 7 billion at the end of 2004; however deposits remained flat at 8 billion.

Development Bank of Kenya
DBK which is going to merge with HFCK, had a reduced profit during the year of 65 million, down from 92 million in 2003. Customer deposits decreased from 613 to 469 million. The bank which is supposed to be a development finance institution, doubled its investment in government securities from 646 million to 1.2 billion