Category Archives: Basel II

KCB Back on Top

Now KCB Country: It’s been a long climb back, back but KCB will finally top the Kenyan bank rankings and will lead into 2009 on after overhauling perennial leader Barclays.


At the end of September, Barclays, led with Kshs. 173 billion in assets ($2.36 billion), even with KCB at Kshs. 172 billion [KCB group is at Kshs. 184 billion – through S&L, Uganda, Tanzania, S.Sudan subsidiaries]. But by 2010, it could be a different story. Three years ago, in September 2005, the score was Barclays 106 billion (1), KCB 70 billion (3) – and at that time Equity Bank was at Kshs. 10 billion (No. 13) – but today Equity is at Kshs. 75 billion (zooming in to No. 4)

Capital Issues
– Today is the last day for the Co-Op IPO.
– Strike out banks identified as probably going to raise capital a year ago – Kenya Commercial, Cooperative , National Bank of Kenya cabinet approved share sale, Commercial Bank of Africa, Standard Chartered, Stanbic, Investment & Mortgages got new shareholders, Barclays, Equity, and CFC/Stanbic.
– City Finance Bank shareholders voted to reduce the banks issued share capital to Kshs. 400 million down from 1.6 billion through a cancellation/change in the par value to reflect past losses. Current capital is 331 million

Who’s the Real Marshall?: Two notorious ex-bankers and Kamlesh Pattni and Ketan Somaia who have feuded for control of Marshals Limited (Tata, and formerly Peugeot franchise holders) should prepare for another encounter as the registrar General has called for a meeting in December to iron out the ownership of the company.

Bankers cheques only: If you want to visit and see wildlife in the Masai Mara Game Reserve, the Narok County Council will insist on payment of park fees by bankers cheque only from December. Since the Council collected Kshs. 573 million (~$ 8 million) in game park fees last year, is there concern that more was lost?

Fuel Fixed: The government has today gazetted petrol price margins for major towns in the country

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)

Diamond Trust rights issue

1 ½ years ago, Diamond Trust Bank raised 735 million from shareholders, and now they are back this time targeting another 1.6 billion shillings ($24 million). NIC bank also has a rights issue on-going while that of Housing Finance has stalled temporarily.

The rapid growth of assets, loans and deposits has created a gap in capital that banks will need to fill up to maintain capital adequacy and Basel II requirements. Other banks likely to require to raise capital could include Kenya Commercial (after a previous right issue 2004), Cooperative, National Bank of Kenya, Commercial Bank of Africa, Standard Chartered, Stanbic, Investment & Mortgages, Barclays, Equity, and even the new CFC/Stanbic Bank.

Kutwa Monday

The Capital Markets Authority (CMA) seeks to extend the statutory management of Francis Thuo stockbrokers stockbrokers (by the Nairobi Stock Exchange) for another 6 months (this is due to expire on September 6)

Are we ready for Basel II
Diamond cash again?: 1 ½ years ago the bank raised 735 million shillings, and now they’re back for more cash as are NIC also with a rights issue (and bonus share). These fast growing mid-size banks want to comply with Basel II by 2010 which requires that they have adequate capital to cover not just credit risks, but also market and operational risks

Mumias glazing: Mumias dressed up some bad news glazed over reduced sales (-10%), profit (-9%), and cash with the promise of a dividend and a 2 bonus shares for each held – which apparently worked as the share closed 8% up on the previous week. . Still even the Business Daily was moved to decry insider trading in Mumias and EABL shares this past week

Opportunities

Road audits: from the Kenya Roads Board for engineering firms to team with financial audit firms to audit road construction work on behalf of the government by performing technical, performance and financial audits. D/l is 24/9

Strathmore finance seminar: on Friday September 7 at the Hilton on Kenya as an emerging capital market

Jobs

Celtel: revenue assurance & fraud manager, treasury & tax manager. D/l is 7/9

Director of information & public communications of the government of Kenya. details here and d/l is 7/9

Marketing managers (3) [branding, core network, wireless] at Huawei: apply to Kenya@Huawei.com by 14/9

Editorial staff at the Nation media group: they are looking for website editors, owners of popular blogs in east Africa, sub editor with niche publications – in their 20”s and 30’s. apply for positions by picking any story in the nation or east African, rewrite it and send it back to editstaff@nation.co.ke by 10/9

Popote wireless: head of sales, IT account manager, sales engineers. Apply to hr@popotewireless.co.ke 14/9

Safaricom: principal credit controller, retail center agent, sales analyst, senior marketing & planning analyst. D/l is 7/9

Governance advisor – Kenya for the World Bank – d/l is 13/9

Opportunity Friday

Rights issue
CFC has announced the calendar for their rights issue through which the Bank hopes to raise 744 million shillings by issuing 12 million new shares at 62 shillings (a discount of about 16% on the current market price). Each shareholder (of record on November 2) has the right to 1 new share for 12 currently held. Significant dates are;
– 16 November rights start trading
– 30 Nov last day of trading
– 9 December last payment date
– 16 Dec Results announced and register updated
– 21 Dec 21 new shares start trading

Who wants to be a millionaire?
Mobile operator Safaricom has launched a new contest that will reward 1 lucky subscriber with one million shillingseach week day over the next month. You qualify for the daily draw each time you top up a phone account by one hundred shillings. I’m down 1 today, 29 to go.

Bank consultancy
A Risk management consultancy opportunity has been advertised by PTA Bank, and the deadline is November 30.

Hotel for sale
The National Social Security Fund is selling a 114 bed hotel formerly known as Polana in downtown (not beach) Mombasa. Submit proposalsto the managing trustee by December 7. More information can be obtained from info@nssfkenya.co.ke

Transportation
For transportation of emergency relief commodities to various districts for a period of one year. Apply to the special programmes ministry in the office of the president by December 13.

jobs

Kenya Commercial Bank
– Database developer
– Hardware systems specialist
– Enterprise solutions specialist
Apply by November 25th to the divisional director, human resources, 48400-00100 Nairobi

Savings & Loan Kenya – a subsidiary of KCB
– manager sales (ESD/SL/05)
– manager marketing (ESD/MK/05)
– corporate credit analyst (ESD/CCA/05)
– advance manager (ESD/AM/05)
Apply by November 25th via KPMG’s executive selection division at esd@kpmg.co.ke .

East African Development Bank
– corporate finance specialist
– internal auditor
Apply by 25 November to the country manager EABB, 47685 Nairobi

UNDP Kenya
Poverty & Environment Advisor. Check www.ke.undp.org for details and apply by November 13.

Commonwealth Secretariat
GIDD (Government & institutional development division) advisors for East & West Africa. Check www.thecommonwealth.org for details and deadline is 9 December.

Deloitte & Touché
– Audit seniors. Apply by 30 November at admin@deloitte.co.ke

Tetra Pak
– financial analyst. Apply by November 22 to the human resource manager, 78340-00507 Nairobi.

Sports
Champions Unite: To create a champions league and super bowl powerhouse. (British soccer team Liverpool FC said it has held discussions with New England Patriots owner Robert Kraft amid speculation that the U.S. tycoon could be poised to buy a stake in the club.)