Category Archives: Barclays

Kenya’s Money in the Past: Kenneth Matiba

“Aiming High” is an autobiography of Kenneth Matiba that covers his life as a civil servant, businessman, farmer, corporate leader, member of parliament, cabinet minister, and presidential candidate.

It’s also a good business book that’s well written and detailed.

Excerpts:

Scaling Farming Ventures

  • While exporting beans to Europe, he faced freight challenges. East African Airways (EAA) had no cargo and when BOAC planes landed in Nairobi from South Africa, they were always full. Cargo was doubled booked and often not loaded at Embakasi airport and later thrown away. He decided to start a cargo airline in 1967 and registered African international airways and invited John Michuki and Charles Njonjo to join. At the time EAA’s problem was that Uganda was not remitting revenue and it was serving uneconomic routes in Tanzania. He got the authority to operate a cargo charter flew an old Britannia plane that was on sale for £65,000 to Nairobi to inspect with Michuki and Njonjo. But unhappy EAA staff reported back and the Tanzania Standard had a headline about how Kenya was helping three capitalists to destroy EAA. Michuki and Matiba were PS’s and Njonjo was AG and they decided not to sign the purchase agreement and the plane was flown back to England.
  • Craziest venture: In 1975 during a potato shortage in England, tried to export 6,000 tons. Rounded up all potatoes in Meru and with 290 trucks got them to Mombasa. Managed to load one ship with 1,600 and later another with 1,700. The second broke down, and by the time it reached potato was rotten and the ship was diverted for special cleaning.

Making Transitions

  • Only after he resigned from the government was he able to safeguard his independence through personal business dealings.
  • Radio announcements about cabinet reshuffles were a feature as far back as 1965. He heard he had been transferred from the Ministry of Home Affairs to the Ministry of Commerce, Industry and Cooperatives. There was no proper handover and he felt it was wrong to shuffle civil servants (PS) like happened with ministers.

Corporate Life

  • In 1968 he planned to retire as PS and gave a one-year notice. He asked Geoffrey Kariithi to wait till President Kenyatta was in a good mood before telling him. When Kenyatta realized this he asked who authorized Matiba to leave the government and Kariithi reminded him it was he. Matiba later made up – he was arranging for his son Raymond and John Michuki’s two sons to be circumcised and Kenyatta asked that he also rope in his two sons, Uhuru and Muhoho.
  • After he left the government, he had five job offers and chose Kenya Breweries.
  • He refused to become the Chairman of Anglo Kenya investments without equity, so he was offered 26% and he paid for that.

Hoteling & Real Estate

  • Acquired Brunners hotel in 1974, a hotel in the middle of town, that was listed on the Nairobi Stock Exchange. The Brunner family had 65% and Marcel Brunner and his son Derek continued to run it and helped Matiba with Jadini later on. But they closed it in 1978. It had an old interior and its 120 beds could not support the needed renovations. They sold the building in June 1982 and Fedha Towers was later built on the site.
  • George Robinson bought 10 acres in Karen, improved and sold it to buy the Mackinnon Building opposite New Stanley for £50,000.
  • Matiba scouted Jadini Hotel in 1967 which was on sale in £54,000 and recommended Robinson buy it. They sold MacKinnon at a profit and bought Jadini and another 10 acres in Karen.
  • Bought Dacca Road houses in Nairobi West in 1969 and sold them in 1971.
  • They developed Golf Course housing estate but later gave up housing to concentrate on hotels and schools.
  • When Robinson died, Matiba negotiated to purchase his stake and took over Jadini. He had to rush to complete construction and open for tourists while facing down hostile old staff and management.
  • Michael Betrano, a new manager, rescued Jadini when it had 7.5% occupancy in March 1973 and put it on the world map. He later hired Christopher Mogidell who took it further.
  • In 1978, built Africana Sea Lodge in six months and in 1984 built, the 400-bed Safari Beach in 10 months that was opened in 1986.

Tourism Sector

  • Seasonal airlines: For KTDC, Matiba chaired the struggling Air Kenya which only did business from December to March and July to September when tourists visited. It was idle rest of the year and utilization was never above 50%.
  • Difficult Ministers: Tourism Minister Elijah Mwangale saw hotels as swindlers who did nothing but cheat Kenyans out of the foreign exchange. Matiba also held his tongue when Maina Wanjigi set a target of a million hotel beds which he correctly saw as unrealistic as the industry could not build 100,000 beds a year.
  • Matiba argued that tourism was the cheapest for Kenya to earn foreign exchange. To earn $100, you need to invest $40, and gets a net of $60 while to earn $100 from coffee, it costs $68.

Sports involvement

  • Matiba decided to form Kenya Breweries Football Club in 1970 and have all staff stop playing for other teams. They entered the poorly-run Kenya Football Association league that had a lot of frustration. Matiba later formed the Kenya Football Federation to run a 12-team Kenya Football League exclusively as a company that the Sports Minister could not interfere with and invited other clubs to join and though KFA refused to recognize them. But after Gor Mahia agreed to join, other teams followed. All they wanted was to play soccer and entertain fans, not represent Kenya. They were not deterred by a suspension by the KFA and went ahead to draw a league for Nairobi Mombasa Nakuru Kisumu, book and pay for the stadiums on Saturday and Sunday for a year.
  • Clubs got more from gate takings, tickets were printed by security firms which club representatives checked at gates, and complimentary tickets were abolished. While prices went up, they got more fans to come after they eliminated stone-throwing. They ensured clubs showed up ahead of time for matches for inspection and eliminated match delays sometimes caused by witchdoctors and superstitions.
  • In his first year chairing KFF and KFL, Kenya won three East African cups.
  • Matiba was an avid sportsman who climbed Mount Everest when he was a Cabinet Minister.

Giving Back.

  • Matiba worked with Bishop Sospeter Magua who wanted to make the church self-sustaining with permanent income through investments, and not be weak financially by staying dependent on unpredictable charity donations. They organized for three districts – Muranga, Kiambu and Nyeri – to contribute. President Moi chaired the first harambee in Muranga where Kshs 1 million was raised, Mwai Kibaki chaired the next one in Kiambu and Njonjo was invited for the third in Nyeri. They bought a 7-acre plot in Loresho and one acre on Kayahwe Road to build maisonettes. But Bishop Magua died in a road accident in 1982. Is Bishop Magua Centre, home of the first iHub, named after him?
  • Embori farm in Timau was put up for sale in 1977 for Kshs 34 million and Robert Wilson, the European farmer selling it, did not want it to go to a cooperative or large group, preferring it should go to individuals or a public company. Matiba persuaded him that it could remain intact and not be subdivided. The seller also wanted Kshs 20 million of the amount in foreign exchange and Matiba asked Kenyatta who authorized the Central Bank to release this sum which was, the largest amount of forex ever given to purchase a farm. Meanwhile. a cabinet minister who wanted the farm tried to scuttle the deal. Matiba did a prospectus for Kiharu residents that yielded Kshs 6 million from 10,000 shareholders. After taking over, they sold wheat to KFA and barley to Kenya Breweries to meet the interest on overdraft for seven years but the farm did not generate enough to pay back the bank loan and shareholders are not willing to pay more. So Matiba next pushed them to sell some land to local residents, with a bank offering 50% finance and keep the balance for the farm, but after a year, only a handful took the offer. The farm still runs well today.

Business and politics

  • After 3.5 years as MP, he was appointed a Minister of Culture and Social Services in September 1983. He was the Chairman of Kenya Breweries and he made a personal decision to resign and was succeeded by Bryan Hobson. At the time, Alliance had seven hotels and four schools.
  • Matiba resigned from the cabinet in December 1988. After he quit he has no passport and went about his businesses quietly, but Moi never forgot. When he got his passport back in 1989, he made a trip to Rwanda for the wedding of the daughter of President Habyarimana in July 1989. Then in February 1990, he was invited back to Rwanda to explain how that country could expand its tourism and he took five experts from the Alliance group with him. But as soon as he came back, special branch officers started looking for him for interrogation after the death of Minister Robert Ouko.
  • Concern about leadership. The Kenya majority has lost the concept of servanthood. Leaders aspire not to serve citizens but themselves. Many spend only two hours in their offices making personal telephone calls and the rest of their time on their business.

Business Advice

  • The biggest problem African businesses face is a lack of accounting.
  • Africans also treated businesses as hobbies and entrust them to ignorant family members.
  • Business people try to do too much – being butchers, curio sellers and textile dealers all at the same time instead of concentrating on one line.


Matiba was detained in July 1990. The book dwells on his medical treatment after he was poisoned in detention and his preparation to run for the Presidency in 1992 where he came second. It does not go into his later tribulations with banks and businesses that halted the corporate empire he had built. Kenneth Matiba died in April 2018.

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.

Absa Kenya absorbs Covid hit

Absa Kenya reported their June financial results, continuing the thread of banks taking being impacted by the reduced business activity and increased credit risks occasioned by COVID-19.

Kenya’s fifth-largest bank with Kshs 392 billion ($3.62 billion) in assets saw its deposits and loans higher than 8% last June and a pre-provision profit of Kshs 8.6 billion for the half-year.

However, the bank increased its provisions for bad loans threefold due to COVID-19 impacts and IFRS9 guidelines from Kshs 1.6 billion to 5.3 billion. This resulted in a net profit before tax and exceptional items of Kshs 3 billion, down from Kshs 6 billion last June, with a further one-time charge of Kshs 1.7 billion as the cost of completing the transformation from Barclays to Absa in the first half of the year.

During COVID, the bank had focused on helping its customers manage their livelihoods and has restructured 56,000 loan accounts, worth Kshs 57 billion, 28% of the loan book. COVID-19 has hit across the sector and commercial banks in Kenya have restructured a combined Kshs 844 billion of loans, 29% of the industry’s total. Absa’s bad loans are now at 8% compared to 13.1% average for the banking sector in June 2020.

Kenya’s Top 10 Banks in 2020

Factoring in the absorption of their new NBK subsidiary, KCB’s numbers increased their lead at the top of Kenya’s bank table, with assets of Kshs 786 billion (~$7.86 billion). They are followed by Equity (Kshs 507 billion assets), which also increased its capital by almost Kshs 30 billion – probably muscle for its regional deals.

The only major change is with NCBA entering the top 3, after the assets and liabilities of NIC were transferred into CBA in October 2019. NCBA had bank assets of Kshs 465 billion and a pre-tax profit of Kshs 9.2 billion that was further reduced by exceptional merger costs of Kshs 1.1 billion.

The financial statements published today are a continuation of CBA’s and they show that timing of the transfer resulted in a “bargain purchase gain” of Kshs 4.1 billion.

Cooperative Bank is fourth (Kshs 449 billion assets), but may overhaul NCBA by the end the year, while fifth is Absa Kenya whose 2019 results were announced yesterday.

An interesting race mix is next with Standard Chartered, Stanbic Bank and Diamond Trust all closely bunched at about Kshs 300 billion of assets, and rounding out the top ten are I&M and Baroda Bank.

The year 2020 has started with a lot of economic uncertainty economic caused by the Corona virus pandemic with the possibility of strain at some banks. At their results briefing yesterday, Absa Kenya CEO Jeremy Awori said that such times also create opportunities for new partnerships as Absa’s growth plans include targeted acquisitions and disposals. Already Jamii Bora and Cooperative banks are in discussions about a buyout, while there are other small banks that were already in need of a boost.

Comparative Rankings (to last year):
1 (1 + 12) KCB. (+NBK)
2 (2) Equity.
3 (8 + 10) NCBA.
4 (3) Co-operative.
5 (4) Absa (Barclays) Kenya.
6 (5) Standard Chartered Kenya
7 (7) Stanbic Kenya.
8 (6) Diamond Trust.
9 (9) I & M.
10 (11) Baroda.

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.