Category Archives: bank service

Let UAP take you to the 2010 World Cup in South Africa

As the logistics and numbers of the 2010 World Cup become clearer, and after my brief trip to South Africa, it’s time to re-evaluate financial plans for the Cup and specifically take a fresh look at UAP who are the only company to so far come up with a targeted finance product.

I had looked at the UAP Insurance plan earlier and dismissed/rejected it on the basis of its marginal return. E.g. investing 5,000 shillings per month over next 42 months would give about 233,000 shillings at an assured internal rate of return of about 6%. However, of that, my own savings would be about 210,000 shillings (90%) while UAP would have chipped in only about 10%.

However it is important to note, and they state this in the 2010 product, that the package is a savings plan toward the World Cup, and not an investment plan and it is therefore wrong to compare the plan to an investment fund or unit trust.

The main benefits of saving with UAP come not from the investment return, but from their in-built package which includes discounted air tickets, discounted accommodation and a chance to (save &) travel with other Kenyans fans who could also be your friends. UAP will also bid for some of the limited numbers of tickets that will be made available here (from the quota allocated to Kenya) thus providing some assurance that the match tickets can be obtained beforehand at FIFA-recommended prices and not from scalpers at the last minute.

During my week in South Africa, in which the conference paid for hotel, air travel and some meals I still used about shillings 6,000 on upkeep, some meals, gifts, beers, newspapers etc. Accommodation at the hotel (bed and breakfast) – next to Johannesburg Airport was about 6,000 shillings and a roundtrip air ticket would probably have cost about 40,000 shillings. Food in SA was reasonable at about 300 per meal, but there were some unexpected bills like currency exchange which sometimes cost 300 or 600 shillings each.

All this makes UAP package 2010 World Cup South Africa plan look pretty attractive for a similar trip to SA four years from now. Or I could stay home and watch the games on DSTV or some local TV channel, but I’d rather be there in person.

Banking in SA

SA banking
What’s different about banking in South Africa? Absa is now apart of Barclays and I visited a branch to compare some major differences.

One significant difference between Kenya and South Africa banking is their (SA)recognition that banking is a necessary service which should be affordable. While Barclays is considered to be one of the more expensive banks to use in Kenya, Absa along with the other major SA banks have embraced mzansi which is a voluntary industry effort (financial services transfer charter) to offer accounts for the unbanked, poor, or low-income citizens. Kenya has an unregulated banking sector in which the only option for many such citizens is to seek a cheaper bank such as Co-operative or Equity banks.

Some uniquely Absa services unseen in Barclays Kenya include;
– Izokuphilisa or Absa micro-loans of up to 8500 rand (about 85,000 shillings).
– Mzansi money transfers though which anyone (even non-Absa customers) can use Absa to transfer up to 25,000 rand (250,000) shillings per month to anyone else
– Funeral savings plans
– Full Shari’ah banking including vehicle & asset financing as well as Absa Islamic will writing. (Barclays and KCB have both introduced Islamic banking in Kenya in the last year)
– SA banks sell insurance, something CFC and CBA would love to be able to do at their branches in order to maximise returns on their investments in the insurance industry. A sample Absa insurance plan guarantees additional payment of 50% if death occurs while one is a fare paying passenger on licensed public transport (i.e. matatu) . AIDS is also not a hindrance to obtaining an insurance policy.
– Absa internet access (AIA) for online account users and provides unlimited internet use at a monthly fee
– They have multilingual brochures – typical ½ brochure in English and the back half in Zulu, Afrikaans, or any of the other 11 official languages depending on the region of the country where the branch is located. In Kenya, it’s rare to find brochures in any language other than English.
– On the other hand, it is difficult to exchange foreign currency. Kenya has freed up exchange regulations allowing seamless transfers at forex bureaus and banks while in SA it requires one to show an ID (or passport) and answer a few questions.
– Security is less visible since there are no guards in the bank branches.

Pesa Point web site

Pesa Point are working on a web site that finally shows where one can find their ever increasing ATM locations. Still a beta version before being transferred to the official site.

Standard Raid: the Good, the Bad, and the Ugly

The ugly: Both the Sunday Nation and Sunday Standard reported that a second raid was planned for Friday night, but was aborted by the heavy rains and traffic jams that shut the city till late at night.
The Bad: The mzungu used the N word as he marshalled his troops around the Standard offices during the raid. Sounds like a bad parody of a mercenary or is it the real thing?
The Good: The sale of Kengen shares to the public was accelerated and made as democratic as possible – with minimum lots of 500 (at an investment cost of 5,950 shillings) and a guarantee that small investors will be assured of receiving their shares.

Just as Anglo Leasing attention was diverted immediately by the release of the Goldenberg report, in a smart move, the Standard raid will be followed by the Kengen IPO, the largest in Kenya’s history. This is not the first time this has happened as additional KCB shares were sold to the public in 1990’s to as a way of deflecting political heat from the Government. Look for more advertisements from the office of public communications trumpeting that “this is the government that gave ordinary Kenyans a chance to buy shares in Kengen & Telkom”.

Standard Chartered in 2005
Loan portfolio increased by 3b to 59.7 billion willing but fee & commission income dropped from 2.04 to 1.98 billion shillings. Of the top 3 banks (Standard Chartered, KCB and Barclays) only KCB recorded increased commission & fee income in 2005, which can likely be attributed to its new partnership with Western Union.

Net interest income increased from 2b to 3.3 billion while interest in government securities in which the Bank is heavily invested (24b shillings, equivalent to 70% of loan book) increased slightly from 1.84b to 1.99b.

Still, after tax profit increased from 1.83 to 2.44 b and the total dividend for the year will be 7.5 shillings per shares (out of EPS of 8.69), which is up from 6.5 in 2004. The final dividend of 3.10 per share will be paid after June 2 to shareholders (books close March 31) and the company’s AGM will be held at the Intercontinental Hotel on May 31. Long serving Chairman, Mr. H Awori will be retiring after the AGM. Preference  shareholders will be paid a 6% dividend as well on April 3.

Uchumi
Uchumi halved its six-month loss from a year ago but is still struggling. Half year sales of 1.8b were exceeded by purchase costs of 1.4b and operating costs of 681 million shillings. The 6-month loss in December was 362 million, an improvement from 632m in December 2004.

Shareholder services
CFC Financial Services has announced that they will remain open on Saturday’s until the Kengen IPO period ends. The bank has also opened offices in Eldoret and Kisumu to serve shareholders in Rift Valley and Western Kenya.

There is a shortage of stockbrokers outside Nairobi and Mombasa and this could start a trend as the demand for such services has increased since CDS trading began and now with the Kengen IPO. It would be nice to see some partnerships between stockbrokers and banks that have huge branch networks. E.g. Dyer & Blair setting up part-time desks in branches of National Bank or Postbank on some days of the month to serve shareholders in rural areas.

Jobs
The African Trade Insurance Agency (ATI/ACA) is hiring commercial & political risk underwriters. More details at www.africa_ECA.com and apply at Recruitment@Africa_ECA.com by March 31.

Housing Finance Company of Kenya is hiring
– business development manager (Ref HF/401)
– information system auditor (HF/504)
– relationship officer (HF/610)
– legal assistant (HF/809)
Apply by March 17 to human.resources@housing.co.ke

East African Breweries is hiring
– sales information & administration manager
– trade marketing manager
Applicants must have university degree in business or sales and 5 years successful experience in trade marketing, sales or marketing at an FMGC. Apply by 15 March to hrrecruitment@eabl.com

The Louis Berger Group is seeking infrastructure consultants to work in the Sudan. Current positions open are;
– chief of party
– senior engineer
– manager finance & administration
– manager acquisition/procurement
– other engineering professionals
Applicants must have bachelor’s degree and 5 years relevant experience. More details at www.louisberger.com and applications can be sent to staffing@louisberger.com.

Events
The Vagina Day monologues will be held at the Carnivore on Tuesday March 7 from 7 p.m., entry is 500/=. I saw it once, two years ago with a lot of beer, and I am told if you’ve seen it once, you’ve seen it all, since I’m told that local producers are not allowed to adapt/add new material to the event and must stay true to Eve Ensler’s book.

Progressive Banking

Progressive ATM’s
One way of beating the long queues and over-the-counter fees at banks is by operating an account at a bank whose ATM’s enable customers to perform all the basic bank transactions – (i) make withdrawals, (ii) check balances (iii) place deposits and (iv) make transfers – at ATM’s, preferably at no extra charge.

These Bank ATM’s allow deposits
– CFC
– Diamond Trust
– Equity Bank
– National Bank of Kenya
– NIC aka MOVE
– Standard Bank (Stanbic)
– Standard Chartered

ATM’s don’t accept deposits
– Barclays
– Co-operative Bank
– Kenya Commercial Bank
– Kenswitch network (EABS, CBA, Consolidated, I&M, Transnational, others)
– Pesa Point network (various banks)

Schools’ footnotes
– In January, some of the most popular/in demand people to know are school headteachers, teachers, members of school’s board of governors and other educationists – who are all called upon by thousands of parents seeking to place their children in coveted and affordable schools.

– Also, girls in Kenya have a huge advantage over boys after sucessfully completing their primary school education. This is because high schools for girls have for many years received an inordinate amount of support (financial, buildings, other) compared to high schools for boys. As a result, girls who pass their standard 8 exams have many more national and quality high schools to choose from compared to boys.