Bank Briefs

Barclays has sweetened its’ mortgage terms

Consolidated: The deposit protection fund (DPF) will sell it’s 50% stake in Consolidated Bank back to the government –who are likely to hold on to the stake until the Bank has a profitable streak that will enable a public listing (e.g. Kenya Re) in a few years. The DPF which guarantees funds of Kenyan bank account holders (up to 100,000 shillings), is now only allowed to invest in government securities.

Equity: As usual, is the first bank to report their September results and Kenya’s fastest growing bank has doubled in almost all measures since a year ago. With assets up 42% and profits up 54% (already exceeded 2005’s) the bank is on track to reach the 1 billion shillings in pre-tax profit mark – a feat the established Nation media group only achieved this year. (See other Bank rankings)

HFCK now offers 20-year mortgage plans.

KCB has four buildings up for sale this month: Hamburg house (Tom Mboya St) for 60 million shillings, Lakhani place (Moi Ave.) 40m, Diamond Building (Moi Ave.) 30m and Loncom Building (Kenyatta Ave – Nakuru) also for 30m. Deadline is 10 November.

Safaricom: Is this the future of money transfers and microfinance?. Safaricom will roll out M-pesa in 2007 which was developed with CBA and Faulu Kenya. Some rough numbers from the trials: Average transaction (1,000 shilling or $14), 0.6 transactions per day, average cash deposit and transfers – 1,500 ($20), and average transfers and withdrawals were 300 shillings each.

– Has a new CEO: Richard Etemesi replaces Mike Hart
– To get new software: CR2’s BankWorld integrated channel banking solution (source: Factiva)

10 thoughts on “Bank Briefs

  1. Anonymous

    So these BUILDINGS are priced the same as some houses in Kenya!

    Banks – Are you sure these prices you quote are not opening bids?

    Any idea in what condition the buildings are?

    I remember Diamond Building on Moi Ave. It was a nice solid building esp when Moi Ave was still a nice walkable area (without getting pickpcketed)!

  2. pesa tu

    @Coldtusker: There’s a glut of office space in the CBD.
    By the way these prices are like what some houses in Riverside cost.

    So does that mean that domestic real estate is overpriced or commercial bldgs in Downtown are Undervalued?

    Yahoo-for the first time a Kenyan CEO for Stanchart in the region.

  3. Mashatall

    safaricoms Mpesa might not fly at all. Who is regulating their platform? CBK or CCK? do they have anti-money laundering measures in place? most Mobile commerce solutions are limited to micro payments, and i believe the banks will come out lobbying hard coz that means their deposit base will be impacted by Mpesa. Whu would anyone have to bank their money if they can do transactions thru their cellphone? we will go back to sleeping on our chums9chini ya mattress), and only unleash when we need to go through the banking system or safaricoms platform. Thats my two cents on Mpesa.
    By the way when is the asset backed securities legislation being enacted? A lot of the banks offering mortgages will be able to seuritise their loans and sell them to the pension funds an high net worth investors. Thats what happens here in the US and the mortgage market is very efficient. Hope the powers that be (transcentury group) are not waiting to buy into HFCK before they enact the legislation, so that they have clear advantage when they roll it out.

  4. kenyanentrepreneur


    The Mpesa thing sounds like a version of paypal (except instead of sending money via the internet, you send it via a mobile phone)– it’s a great idea, just like paypal was a great idea. It’s about convenience, not banking.

    The idea is to get people away from having to line up at a bank or having to go looking for a functioning ATM machine & worry about being “jacked”.

    Technology is pushing businesses to create programs that will provide their time crunched customers with tools that will facilitate speed and convenience when it comes to taking care of these daily chores.


  5. mwasjd

    Mpesa gets safaricom dealers to act like banks. If banks have turned down opportunity to reach rural masses, we shouldn’t hate Safaricom for filling this gap.

    Consider how savings like transport (translates to less travel + less stress on road infrastructure), since one doesn’t have to physically transfer money. I remember a guy saying that if it works, he has a pool table at ocha and will have the worker mpesaring the returns daily (at 36/- that’s a small measure if you are sending above 1k).

    The way for the banks to go is partner with Safaricom (more bakes for the mobile company) else Safaricom will have more cash in hand – from jamaas deposits. I figure the system is secure coz of the PIN + that the trial has brought out all sorts of things regarding security. Otherwise, losing your phone will have a whole new meaning…

    Mashatall: Your bank charges you for keeping your cash and it depreciates in value in the account so competition is good. Your employer might even consider sending your salo via mpesa if it hits!!! More cash flowing = better economy esp for the rural side of the country.

  6. bankelele

    coldtusker: those are valuations provided by the bank. Moi ave and Tom Mboya can stage a revival – given incentives

    pesa tu: Much office space yeah. I don’t think house prices will ever come down – owners are content to wait until the right buyers come along. And I was watching CBS news today about the slowing house market – and some sellers were throwing in boats or mercedes to persuade people to buy their $700,000 houses

    Mwasjd & Mashatall: We’ll see how it goes. I don’t see it as a threat to banks, but certainly to money transfer companies

    No idea about asset backed securities legislation – maybe next year?

    kenyanentrepreneur: paypal have given Africa a wide berth till recently. Also remember is m-pesa succeeds, vodaphone will roll it out in other African countries

  7. Anonymous

    Good for Safaricom… BTW, banks… this was the big idea not the location finder… LOL

    So some folks are happy coz they don’t have to be “found” when they visit their, um, favourite places!


  8. propaganda

    There’s a South African version of this money transfer/banking-via-mobile product: Wizzit, with competition from MTN and an eBucks-linked initiative from First National Bank. The Economist wrote about it (and MPesa) this week. Even if this is used for money transfer alone, I predict it will be one of Safaricom’s biggest products.

    BTW, did anyone think it odd that Safaricom quickly cobbled up a ‘new’ 3G offering to change the subject? During the event Mutahi Kagwe spoke of a Safaricom/ KCB link in mobile banking. Anyone know what he was talking about?

  9. bankelele

    Coldtusker & Mwasjd: I WAS WRONG.

    CT: Note safaricom has co-operated with the police to track down criminals (probably using tower locations though)

    Propaganda: Thanks for the links. I also saw the Economist article

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