Monthly Archives: September 2008

Bank Rankings: Final Word

The final word on the banking sector comes from the 2007 bank supervision (PDF) report from the Central Bank of Kenya.

Notes:
– CBK ranks banks using CAMEL (capital adequacy, asset quality, management quality, earnings, and liquidity); 10 banks are strong (down from 13 in 2006), 27 satisfactory, 8 are fair and none were ranked marginal or unsatisfactory. Overall the banking sector totaling 951 billion in assets (~$14 billion)is satisfactory, but with 6 large banks controlling 58% of the industry
– Increase from 575 to 740 branches (293 in Nairobi) in 2007 [all province had increase in branches led by Nairobi (54) and rift valley (46) with only central bank with a decline in branches (-2)]
– Number of deposit accounts increased by 42% to 4.7 million
– Regulatory issues tacked include disaster management, IFRS, Basel II, licensing of shariah banks
– The sector employed 21,657 in 2007 (4727 management, 3865 supervisory, 12,773 clerical, 292 other) up from 15,568 in 2006
– Some of the (97) forex bureaus flout laws such as not recording transactions, money laundering, transfer of ownership, operating parallel hawalla accounts, liquidity
– Coming up: microfinance institutions will be licensed, credit reference bureaus will become operational, capital increases expected

And where are the 4.68 million (deposit) bank accounts kept?

Bank, No. of accounts, (no of branches)
Equity 1,840,332
Cooperative 556,073 (54)
Kenya Commercial 487,667 (135)
Family Finance 465,308
Barclays 428,531 (95)
National Bank of Kenya 233,026 (34)
K-Rep 169,796 (26)
Standard Chartered 131,618 (34)
Housing Finance 45,842 (10)
Stanbic 31,906 (8)
Diamond Trust 29,589 (13)
Others are Consolidated 25,078 (12), CBA 23,657 (17), I&M 22,053 (10), NIC 21,452 (15), Fina 14,446 (7), CFC 12389 (8), Transnational 11,053 (9), and Citibank 2,927 (3)

Kenya Bank Rankings: June 08 Briefs

ABC; assets up 16%, deposits 17 and loan 7%, income is up 12% but expenses up 17% with no growth in 2008. Too early to tell about kisima at this indigenous bank>
Bank of Africa : deposits up 20% and loan 34%, income 51% with expenses up 41% but NPA also up 59%. French bank, quiet style, but making more marketing efforts to shore up size.
Barclays: assets up 22%, profit 21%, deposits 22% and loans up 30%. Income is up 35% from a year ago but expenses up 45%. In 2008, deposits are up 18% but loans up 1% – change of direction? Did not actively participate in Safaricom, and this big bank everyone (unfairly) watches to see how they react to Equity Bank
Baroda: profit up 31% deposits 9%, and loans up (staggering for them) 57%, in 2008, both income and expenses are up 29%, and though deposits are flat, loans are up 25% – no longer playing safe
Chase: asset up 76% deposits 58% and loan 88%. Income is up 48% but expenses up 75% and NPA 86%. in 08 loans up 29% and deposits up 51% at this fast growing local bank which has now ventured into stockbrokerage as Gencap
Citibank: assets up 65% and profit up 74%. 2008 looking even better as income is up 49% compared to just 7% in expenses, and remains immune (and insignificant) to parent turmoil
City Finance: assets up 2% , deposits up 12% strategy shifting with shifting bank with loans down 59% government securities and placements up by higher margin from a year ago. Just 8 million in staff costs in six months?
Commercial Bank of Africa: (CBA) assets and profit up 21% loans up 52%, and income up 23% compared to expenses 26%. Increased lending in 08 with 36% loan growth since December. Blue chip bank adjusting to the times, quietly did Safaricom IPO and dabbles in insurance
Consolidated: assets up 6% deposits 24% and loans 36% – with income and exp up 10%. Up for sale, can’t list so likely to be sold privately, and hopefully without controversy
Cooperative (Co-op) : asset up 23% profit 51% loan 44%, and NPA down 54% but insider lending up 40% from a year ago. IPO set for October 20 this year – but has it cleaned up enough legacy bad debt?
Credit: asset up 23% profit up 36% deposits up 25% and loans 44%
Development bank of Kenya (DBK) – assets up 33% deposits up 41% and loans 53%. The
Development financier is up for sale by the Government (ICDC)
Diamond Trust: asset up 40% deposits 37% loan 34%, income up 45% but expense up 64% as bank continues its expansion in Kenya, Uganda Tanzania and Burundi (every other bank says Rwanda)
Dubai Bank asset up 5% deposits 8% income 18% expenses up 13%, somehow translating to profit rise of 85%
Ecobank (formerly EABS) assets and deposits up 4%. Income up 34% and expenses up 10%. The parent Ecobank is currently raising $2.5 billion, (equivalent to Barclays Kenya assets) – showing how far Kenyans banks have to go in the big leagues
Equatorial: assets up 26% deposits 29% , income 21% but expenses up 31%, with no growth in 08
Equity 100% growth in assets loans and profits, and 78% in loans. Income up 140%, with expenses up 106% from a year ago. How long can this exponential growth go on?
Family bank : assets up 39% deposits 23% loan 52%, but income has tripled as have expenses at ‘Equity Blue’
Fidelity: asset up 29% deposits 36% loans 40%
Fina: Assets up 13%, deposits 14% and loan 32%. Income up 26% but expenses up 47% leading to a 24% lower profit. Many banks encroaching on the turf they created in Rwanda
Giro: assets up 1%, , deposits flat but loans up 10% , income up 26% with expenses up 10% – also leading to a surprising 86% profit surge
Guardian: assets and deposits up 11%. Income up 37% with expenses up just 26% leading to a profit surge of 76%
Habib AG Zurich: assets up 10% profit 22% deposits 13% and loans 31%
Habib Bank: assets up 4% from year ago, but no growth in 2008
Housing finance: asset up 34% deposits up 15% and loans up 27%. But profit down 20% (income up 1% while expense up 5%). in 08 deposits are up 5% and loans up 15%. Raised new funds from shareholders and will expect a boost from Equity Bank as anchor shareholder
Imperial; assets up 16%, deposits and loans up 22%. One bank reputed to have the fewest customers, but massive profits from them
(Bank of) India: asset and loans up 15%, with profit up 35%
I&M: asset and loans up 33%, income up 25% as expenses up 16%. Shareholders funds up 60% from new investors and the bank is opening new urban branches
KCB: assets up 66%, and deposits up 20%. Profits are up 77% (income up 50% with expenses up 38%) from a year ago. New funds raised, going regional in eastern Africa and will be cross-listed as well.
K-Rep: assets up 13%, deposits 15 % loans 10%. Income up 12% but expenses up 33% leading to a sharp drop in profit
Middle East: income up 15% and expenses up 33%
National Bank of Kenya assets up 3%, deposits and loans virtually unchanged, but income up 16% as expenses up just 4% leading to a surge in profit of 46% . government shareholding is up for sale
NIC: asset up 37% deposits 31% and loans 39%. Profits are up 38%, as income is up 26% with expenses up 17%. Expanding their stockbrokerage operation, and also opening new branches,
Oriental: assts up 12% deposits up 32% and loans 16%
Paramount Universal: assets up 13% with deposits and loans up 17% at one of the smallest banks
Prime Bank: super growth, with asset up 59%, deposits 57%, loans 66%. Income up 56% with expenses up 30% leading to a surge in profit up 98%
Southern Credit; assets up 9%, deposits and loans up 10% – but income is up 14% with expenses up 31%
Standard Chartered; sleeping giant – assets up 2% profit 1% deposits down 2%, but loan up 15%. Income up 6% but expenses up 10% from a year ago
Transnational: assets up 19% profits 16% deposits 23% and loans 19%
Victoria: flat, assets down 2%. Deposits are down 34% as loan up 18% – and income is up 18% but expenses are up 58%

Stolen Crown

What happened to the shares of Crown Berger last Friday was an anomaly that gives a bad impression of the NSE. The company announced an increase in pre-tax profits on Thursday only for their shares to nosedive from Kshs. 38 to Kshs. 8 on Friday, before settling at 19.75, about 48% lower – on a volume of just 10,000 shares.

Still as the running thread of NSE insiders shows, such one-day spike trades have usually on the upper side (Equity, Citi Trust, CFC, to name a few), and don’t merit many complaints, except from skeptics. But if I was a shareholder of Crown (used to be one two years ago), I’d be very upset that 50% of my portfolio in an otherwise sound company has been wiped out in one day. What Crown is going through is no different than any manufacturing company as this time of high oil prices; they have even had mostly good press – expanding regionally, attained Super Brand status recently etc.

There’s a supposed 10% rule on price moves following market information, which is selectively applied. This unusual trade was sloppy or sinister, should never have been allowed.

Kenya Bank Top 10s

half year to June 30 2008

Pre-Tax Profit: Barclays 4,295 million shillings [$64 million], KCB 3,394, Equity 2,997, Standard Chartered 2,321, Citibank 1,694, Cooperative 1,664, National Bank of Kenya 902, Commercial Bank of Africa 847, Investment & Mortgages 767, CFCStanbic 698 [$10.4 million]
12 month profit change : Ecobank 633% (to Kshs. 66m), Family 290%, Equity 189%,
Bank Africa 105%, Prime 98%, Giro 86%, Dubai 85%, KCB 77%, Guardian 76%, Citibank 75% then Consolidated, Cooperative, NBK, Credit, I&M

Deposits: Barclays 128,765 million shillings [$1.92 billion], KCB 93,372, Standard Chartered 73,512, Cooperative 59,072, CFCStanbic 57,040, Equity 42,116, Commercial Bank of Africa 35,135, National Bank of Kenya, 34,020, NIC 30, 165, Citibank Kenya 27,836 [$415 million]
12 month deposit growth: Equity 78%, Chase 58%, Prime 57%, Development Bank 41%, Diamond trust 38%, Fidelity 36%, CFCStanbic 33%, Oriental 32%, NIC 31%, Equatorial 29%, Transnational 23%, Barclays and Imperial 22% then KCB, Bank Africa, ABC.

Loans: Barclays 106,691 [$1.59 billion], KCB 60,165, Standard Chartered 45,351, Cooperative 43,411, CFCStanbic 38,746, Equity 34,273, NIC 25,727, Diamond Trust 22,320, Commercial Bank of Africa 21,803, Investment & Mortgages 20,703 [$309 million]
12 month loan growth: Equity 139%, Chase 88%, Prime 66%, Baroda 57%, Development Bank 54%, Commercial Bank of Africa 52%, Family Bank 51%, Co-op Bank 44%, Credit 44%, Fidelity 41%, then NIC, Bank of Africa, Diamond trust, I&M, CFCStanbic, Fina, Barclays.

Where to work: high employers – 6 month staff expenses; Barclays 3,287 million [$49 million], KCB 2,767, Cooperative 1,387, Standard Chartered 1,306, Equity 1,245, National Bank of Kenya 864, Commercial Bank of Africa 423, Citibank Kenya 416, CFCStanbic 389, Diamond Trust 330
directors; Standard Chartered 61 [$910,000], KCB 57, Cooperative 26, Commercial Bank of Africa 25, NIC 22, CFCStanbic 21, National Bank of Kenya 17, K-Rep 17, Southern Credit 14, Diamond Trust 12

Assets: 12 month asset growth: Equity 135%, Chase 76%, KCB 66%, Citibank 65%, Prime 59%, CFCStanbic 42%, Diamond trust 40%, Family bank 39%, I&M 33%, Bank of Africa 23%, Barclays 22%
Return on assets: Equity 4.28%, Citibank 2.85%, India 2.84%, Barclays 2.58%, Stanchart 2.45%, Coop Bank 2.31%
Non-performing assets: Cooperative Kshs. 8,841 million ($132m) , KCB 6,982, Barclays 5,986, Ecobank/EABS 3,492, CFCStanbic 3,435, National Bank of Kenya 2,559, Housing Finance 2,302, Standard Chartered 2,045, Equity 1,845, Commercial Bank of Africa 1,540
Sgare capital : Barclays Kshs. 19,233 ($287 million), Equity 19,005, Standard Chartered 9,615, KCB 9,591, Citibank Kenya 7,791, CFCStanbic 6,865, Cooperative 6,710, National Bank of Kenya 4,912, NIC 4,649, Diamond Trust 4,259