Category Archives: bank service

Absa Kenya One Year Anniversary

Absa Bank Kenya celebrated its one-year anniversary at its newly-redesigned Queensway Branch in downtown Nairobi today. It has been a strange first year for Absa which completed the transformation from the Barclays brand in February 2020, three weeks days before Kenya was enveloped by Covid-19 and underwent a shutdown that, while it has progressively reduced, still affected thousands of business, jobs, and customers, as well as the bank itself.

Speaking at the event, Absa Kenya Managing Director Jeremy Awori said the bank had a great strategy to grow and expand, then Covid-19 hit and the year turned to be one of the challenges for the bank, industry, local and global economy. Absa also began to see opportunities for impact and to demonstrate its humanity and innovations to enable the bank to serve customers as they worked to rebuild their livelihoods. They adjusted to have half their staff work from home and instituted a shift arrangement for front-line workers and these enabled 100% of branches to remain open, while the digital platforms had 99% uptime.

Absa offered financial relief to help customers navigate the pandemic after many lost jobs and businesses. They restructured Kshs 62 billion worth of loan repayments, extending relief to over 59,000 customers. They also continue to lend a sizeable amount to SME’s to stay afloat and provide employment, and also committed to paying small suppliers of the bank within seven days to boost their cash flow.

He added that the bank was cautiously optimistic that 2021 will be a better year, with news of vaccines giving confidence to business and governments to relax containment measures and turn to boost economies. Absa Kenya will invest Shs 1.6 billion in 60 technology projects to enhance customer experiences. One will be to automate loan top-ups, allowing people to get loans on top of existing loans, and another will be a new online business-banking platform.

Absa Kenya Chairman Charles Muchene said the bank contributed Shs 50 million to the Kenya Covid Fund, invested Shs 30 million in initiatives led by partners, and donated 210,000 masks for medical workers, with another 20,000 to boda-boda operators. The bank is now asking Kenyans to join and to help underprivileged. They launched a “Wall of possibilities” for people to write suggestions or ideas on the bank’s social media pages or at the Queensway branch on ways that the bank can assist communities to benefit. Absa may fund each idea with up to Shs 2.5 million.

Stanbic Bank “It Can Be” launch

Stanbic Kenya has launched “It Can Be,” a new way of engaging with customers, particularly with women and small & medium enterprises. Stanbic is the second-oldest bank in Kenya, having started over 100 years ago and grew to later merge with CFC Bank in 2007. Today, it is a Tier-I bank with $3 billion assets in Kenya and serves over 200,000 customers with services in corporate & retail banking, wealth management, investments, and insurance.

“It Can Be” symbolises a new push to engage with customers, in the new decade, beyond Stanbic’s 26 branches in the country. The bank has transformed and adopted digital-based solutions to serve its customers who have also largely shifted to online and digital after business disruptions with the emergence of Covid-19. One new Stanbic tool is automating core functions in documentary trade finance using artificial intelligence (AI) and natural language processing (NLP) for real-time counter-party verification, giving customers quick feedback while reducing trade risks.

The “It Can Be” brand ambassador is Brigid Kosgei, the women’s marathon world-record holder.

Stanbic Kenya CEO Charles Mudiwa spoke at the “It Can Be” launch and mentioned how Covid-19 had shown the importance of relationships and standing with communities. He added that the bank’s customer focus had shifted to being relationship-based and Stanbic has embraced four policy initiatives of funding, markets, business competitiveness and influencing policy. In its third-quarter 2020 financial results, Stanbic Kenya announced that it had extended loan restructurings to 23% of its customers, at no cost, to cushion them from the effects of Covid-19. It also reduced the interest charged on existing loans and waived charges for using the bank’s digital platforms.

Stanbic is the largest bank group in Africa, with $151 billion in assets and a presence in twenty countries on the continent. Its largest shareholder is the Industrial and Commercial Bank of China, the world’s largest bank that owns 20.1%. Stanbic Kenya is listed on the Nairobi Securities Exchange (NSE) and shareholders receive a high dividend yield of 8%. Stanbic Africa is also increasing its shareholding of the Kenyan bank to 75% by buying shares from other shareholders.

The Creative Sector in 2020

The Africa Digital Media Foundation (ADMF) has published a comprehensive report on the state of the creative sector in Kenya and the needs, challenges, and ambitions of its participants. ADMF started the study with a questionnaire that was widely circulated and completed the research in July 2020 using online forums and tools.

Summary of their findings:

  • There is a willingness in the Kenya creative entrepreneurs to make things better for everyone.
  • Success breeds success and the creative population is divided between those that have made it (and keep grabbing jobs and clients) and those that have not (less- established creative entrepreneurs who may have few years of experience, little commercial and financial success)
  • All want opportunities to learn more; they accept that technology evolves and new products require new skills.
  • Banks don’t understand; formal credit and financing options aren’t considered viable options by creatives; their financing is limited to sourcing from friends and family.
  • Almost everyone had a story about doing work and not receiving payment as agreed from the client.

Other interesting findings in the report:

  • Top engagements are in TV/video production, writing/journalism, graphic design, animation and finally photography (all have more than 10%). Some small categories with 1% are gaming, event planning and jewellery.
  • There is 50/50 split between those that have formally registered their business and those that haven’t. Of the non-registered ones, some can’t afford to lose some of their income in taxes while others do not see the benefit in registering a business, paying taxes, and accessing the supposed benefits that taxpayers enjoy, such as NHIF and NSSF.
  • 23% work in the sector part-time. Their other sources of income are teaching (7) and 4% each for farming and events equipment rental.

Check it out the full report here.

Also, read more about ADMF, and its sister institution, the Africa Digital Media Institute (ADMI). Some of the courses open for enrollment in 2021 including certificates in video game development, music production, video production, digital marketing, and Rubika 2D animation as well as diplomas in Rubika video game design, sound engineering, animation & motion graphics and film & television production.

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.

The Equity Story

Equity founder, Peter Munga, worked for the Ministry of Agriculture. He would go to work then come back home after a while, the same way most of us visit upcountry. His mother, among other villagers of Kangema worked in the tea farms.

They would get paid in cheques. There was no means to cash the cheques in the village. So they would wait for Munga to come visit home and give him the cheques. He would then go to cash them and bring the tea farmers their money the next time he visited home. This went on for a while until he felt the need to help his community.

Back then, to own a bank account had strict regulations. One had to have several referees to open an account, maintain a minimum balance of Kshs 10,000 and on top of that were storing bank charges. Withdrawal from an account took 7 days. Therefore most people preferred to store their hard-earned money at home, under their mattresses, where it was easily accessible.

Equity has had a few phases. The first one being 1984 – 1993. This is when Munga begun pursuing this dream to help his people. Within this period, the company made losses. But since his goal was more than just profit-making, he carried on.

The second phase which begun in 1994 had James Mwangi, the current Group CEO and MD, come in. Between 1994 – 2003, the company improved its business model and even begun mobile banking. That is going to people’s homes to offer banking services and financial education. It’s in this phase that they begun computerizing their operations.

The art gallery at the #equityat35 party had Equity staff explain to the guests the Equity history wonderfully.

The third phase (2004-2013), which they refer to as take off, had them become listed on the NSE (Nairobi Stock Exchange) and USE (Uganda Stock Exchange). In this phase, they incorporated mobile banking (phone banking) and were the first bank to introduce agency banking. They went on to win awards among them being The Best Bank in Kenya, The African Business of the Year and The Global Vision Award in Microfinance. 

Today, Equity is also listed on the RSE (Rwanda Stock Exchange). The bank owns branches in 9 African countries; Kenya, Uganda, Tanzania, Rwanda, South Sudan, DRC, Ethiopia, Zambia and Mozambique. Their goal is to become a Pan-African Bank with 10 countries under their sleeve by end of the year. In the beginning, their main competition was mattresses and banks, but today, their main competition is cash, fintech and telcos. 

They are big on community social responsibility (CSR), hence the Equity Group Foundation. This has been evident through their Wings to Fly program which has over 16,000 beneficiaries. Equity runs FIKA (Financial Knowledge for Africa), which is a free program that equips the beneficiaries with financial management skills. The Foundation finances the Equity Afia Clinics which are run by the Wings to Fly graduates. The clinic currently has branches in Ongata Rongai, Buruburu, Kawangware, Kayole, Thika, Ruiru, Nyeri and Nakuru. 

A guest post by @themkare