Category Archives: CFC

Kenya Insurance 2007 Rankings

Insurance Company of East Africa Assets 19,151 million [19.15 billion or ~ $309 million] (profit of 545 million) [$8.8 million]
Kenya Reinsurance 14,710 (965 million)
Jubilee Insurance 12,459
British American Insurance 10,252 (512)
Kenindia Assurance 9,886
UAP Insurance 7,245 (888)
Old Mutual Life Assurance 6,447
CFC life — (255 million profit)
Heritage AII 4,522 (364)
APA Insurance 4,491
Lion of Kenya Insurance 3,722 (179)
Phoenix (East Africa) Assurance 3,669 (103)
Blue Shield 3,109
Kenya Alliance 2,798
Madison Insurance 2,751
Cooperative Insurance 2,437 (140)
AIG Kenya Insurance 2,337 (217)
General Accident Insurance 2,192 (216)
Cannon Assurance 2,163 (60)
First Africa Assurance 1,781 (103)
Apollo Insurance 1,774
Geminia Insurance 1,223 (24)
Fidelity Shield 1,194 (98)
Trident Insurance 1,178 (54)
Real Insurance 1,107 (92)
Gateway Insurance 1,058
Tausi Assurance 949 (2)
Occidental Insurance 937 (63)
Mercantile Insurance 910 (34)
Standard Assurance 896 (6)
East Africa Re 872 (119)
Intra Africa Assurance 855
Corporate Insurance 809 (23)
Concord Insurance 757 (28)
Directline Assurance 730
Monarch Insurance 683 (9)
Amaco 674 (43)
Pioneer Assurance 508 (4)
Mayfair insurance 478 (-1)
Kenya Orient 443 (19)
Metropolitan Insurance 437
PACIS 220 (27)
Trinity Life Assurance 219

Kutwa Tuesday – June 18

yes it’s Wednesday, but these relate to recent events

2008 Budget
– While the ICT sector was celebrating, a 25% tax on imported used computers was added on
– Wireless providers also pay a 10% tax, same as mobile companies (putting Telkom wireless on par with Safaricom and Celtel)
– Whistle blower on tax evasion may be entitled to 3% or 5% tax recovered by KRA. (but too late for David Munyakei)
– And from Tanzania; a brilliant idea that sounded dumb initially – at tax on loss making companies; It’s an alternative minimum tax for companies that report tax losses for three consecutive years – and will now amount to of 0.3% of their turnover. This is targeted at companies with high turnover that engage in tax avoidance could KRA adopt that later?

CFC Stanbic: In the CFC-Stanbic merger/takeover, shareholders voiced concerns that some CFC shareholders were getting paid and walking away from the company with cash. Now three of them – Gambit, Trogon, and Jani are voluntarily winding up

IPO refunds: The Central Bank is concerned about the slow pace of Safaricom refunds (statement (PDF))
– Yet there was there option in the initial prospectus for applicants to be refunded by M-pesa; which would have been ideal for thousands of minimum applicants [who are getting refunds of about 7,900 shillings or $127]
– The CBK statement mentions that you can send a message to confirm the status of your refund e.g. “CDS#ID#R” to 4009. (my message told me my cheque which I collected last week, was ready at the broker). What it doesn’t tell you is that the message costs 15 shillings or ~ 2 Safaricom shares at the going rate

Kutwa Tuesday: Banking Brief’s (Jan 15)

CFC on hold?
Could the ongoing political crisis be giving Standard Bank of South Africa second thoughts about its approved merger with CFC? A decision by the Reserve Bank in SA to conclude the deal is also overdue.

Dangers of insular banking
Our banking history is littered with the remains of Daima Bank and other indigenous African and Asian banks. Most went down due to malpractices by directors and managers, but also in-lending to close circle or community companies who as a group could be potentially exposed to a singular risk.

The banks also engaged in subtle discriminatory practices like charging outsiders higher rates, frustrating their loan applications or facilities, or making them feel unwelcome – which ultimately proved to be counter productive as locking them out increased the risks that the banks faced by increasing their exposure and dependence on a core group or sector.

Bank Review ’07: Part IV

Finally the big leagues – these banks have large networks of branches and ATM’s in most of the major towns around the country.

6. (No. 13 last year) Equity Bank: Estimated assets of 51 billion ($730 million) and profit of 2.1 billion shillings ($30 million) as Equity continues the staggering 100% annual growth rate it has maintained since it converted from a building society. Took some political and banking industry heat, but was ably defended by authorities and management. The bank also bought out ¼ of Housing Finance and sold 25% a stake to Helios Capital to 11 billion shillings. The Helios deal will be used to finance Equity’s expansion into East & Central Africa as well as the payment to Housing Finance – and with the addition of new directors, Equity needs to sort out some governance and staff morale issues in the new year.

5. (9 and 10 respectivly) CFC Stanbic Bank: Estimated combined bank assets of 64 billion and profits of 2.2 billion resulting from the mega-merger of two mid-size banks – the local arm of Stanbic (Africa’s largest bank) and mid-size CFC with a combined corporate, insurance and stockbroking business. Some clash of cultures and systems can be expected as with most mergers, but this could be a South African – Kenyan partnership that succeeds, where many others have failed.

4. (4) Cooperative Bank: Estimated assets of 70 billion, profits of 2.5 billion in 2007. Another record year for the bank that has recovered massively from a loss five years ago and since the government set out to sort of the cooperatives sector debts. With growth of 15% from a year ago, and profit up 100%, though the MD was rumored to have been keen to move to KCB.

3. (3) Standard Chartered: Estimated assets of 100 billion and profits of 3.5 billion. The quietest of the big three banks in terms of product development & marketing, it lost ground to KCB even as it remains second in market cap. Hawking their products on street corners may have hurt their image, while the corporate banking is plagued by high fees and an operational system difficult to maneuver.

2. (2) KCB: Estimated assets of 110 billion and profits of 4.3 billion in 2007. Had a smooth CEO transition and growth of 20% but with both deposits and loans up 30% from a year ago. But into S. Sudan has been slow, while Uganda was also delayed, showing the difficult of regional banking.

1. (1) Barclays Kenya: Estimated assets of 160 billion ($2.3 billion), profits of 8.5 billion ($120 million) with growth of 25% from a year ago. The bank continued its turnaround, expanding in rural Kenya and other parts of Africa where it had previously withdrawn and closed branches. This is not the first time that it has had to reverse direction – years ago they spun off an unwanted asset finance business that is now NIC Bank – and who they are fighting for dominance of the same market.

who’s missing?
– Charterhouse Bank which is under statutory management by the Central Bank
– Gulf African – new Shariah bank began in 2007, but may be operating under different rules – (see post)
Kenya Women’s Finance Trust a micro finance organization with assets of about 4 billion and profit of about 200 million that may be the next bank licensed in 2008.

CFC-Stanbic Bank EGM: merger approved

An extraordinary general meeting to approve the CFC – Stanbic merger was held on November 12 at the Intercontinental Hotel

Deal: Stanbic is the largest bank in Africa with a presence in 18 Africa countries and 21 others around the world (including Bank of America in Argentina which they just bought). It has assets of $140 billion and 43,000 employees – and by combining their (relatively) small Kenyan operation with CFC, they will become the 4th largest bank in Kenya.

Approval got: CMA, CBK, monopolies commission.
Approval to be got: shareholders, SA reserve bank, NSE.
The Deal should be complete in about a month.

The meeting was led by CFC Chairman Charles Njonjo. Fellow director J. Kierini introduced the board and, other dignitaries present who including D. Ndonye (Deloitte), Jimnah Mbaru, Kaplan & Stratton advisers, and Craig Bond and a team from Stanbic include his son who works at Stanbic Kenya.

CFC MD Soundararajan explained the rationale for the merger – synergies, very similar and complementary customers, regional opportunities, and enhanced capital adequacy. Customers will get a one-stop shop for all their business, staff get to work in a bigger bank with more careers opportunities (and all employees are assured of retaining their jobs).

Shareholder questions

  • Dilution of minority shareholding? : Management said they are getting into a bigger entity
  • Are major shareholders bailing? : Gambit will get paid in new shares but also about 5.8 billion shillings. MD answered that shareholders are staying and the company is not going anywhere
  • Mgmt. afraid to say that CFC being; Management says it’s a merger, and not a sale; the new entity will have 40% – CFC and 60% – Stanbic shareholders.
  • If CFC is growing well, why sell? Need for capital is important. MD said that he needs about $100 million, while the new entity will have around $60 – 70 million. The merger will enhance the company’s growth plans
  • Due diligence on Stanbic? ; Done and they shared strategies which each other to see if they were on the same path. Also, board member (and lawyer) Fred Ojiambo denied that a 25 billion shilling lawsuit had eroded the value of Stanbic (K) saying that claim had no firm base
  • Why no bonus shares instead of selling out?: MD said CFC had in the past given the largest bonus divided in the history of NSE 21 for 1 and the board will consider that at the right time

This is it: The historic moment passed in a flash as the Chairman proposed that all six resolutions be passed in a single vote since they were all interdependent.

The resolutions passed in a single vote:

  • Created 117 million new shares to accommodate Stanbic
  • Empowered the directors to allot shares to Stanbic
  • Changed the name of the company to CFC Stanbic Holdings
  • Transferred the bank business (assets, liabilities, employees, creditors etc.) to Stanbic
  • Amended the new articles of association
  • Changed the business of the company from a bank to a holding company
  • Now CFC Stanbic Holding co to remain listed on the NSE while CFC Stanbic Bank will be a 100% owned subsidiary

Other speakers

Craig Bond: The Head of Stanbic Africa, said they got lucky in Kenya as the first bank they identified turned out to be the right partner offering great synergies; in Nigeria, they have looked at 6 banks which have not panned out. He said that Stanbic which intends to be the ‘best emerging-markets bank’ in the world had identified 3 countries that they intended to dominate in Africa – SA, Nigeria and Kenya where they intend to break into the top 2 (not remain #4), by rapidly expanding branches in 2008.

Commenting on the largest bank in the world ICBC buying 20% of Stanbic (it’s 70% owned by the Government of China) – he said China is coming to Africa in a big way for her resources, and it offered Stanbic cheap money with the promise to match them $ for $ in any investment in Africa

NSE Chairman Jimnah Mbaru said he was proud that the deal happened under his watch and confirmed that he expected NSE to approve the deal by end of the week. He looked forward to having a big institution with the capital to enable the economy to meet growth goals in terms of resources. And finally called out to family-owned companies to see what could happen if they transform themselves into institutions as the late Mr. Jani had done with his firm which was now merging with Stanbic.

There were further tributes to the late Mr. Jani who created the company in 1951 with a vision for into to partner with an international powerhouse, MD Soundararajan and directors Njonjo and Kiereini for making the deal happen

Humorous moment: Chairman Charles Njonjo was sad that there were only ‘5’ shareholders present when the meeting started but got happy as the numbers had reached about 100 by the time it ended. However, it didn’t really matter as he had 45% proxies from Africa Liaison and Gambit while fellow director Kiereini had 30%.

Goodies: souvenir pen, umbrella, big lunch box with little food from intercontinental – (Fanta, cake, apple, and a bit of goat, chicken, and sausage)

other news

Barclays launched tranche one of its bond – 1 billion shillings, maturing in November 2014.

Rwanda and Burundi to join the East Africa Development Bank once they subscribed via share capital

Equity Bank extends banking hours to almost match office hours; 8 a.m. – 4:30 p.m. on weekdays and 8 a.m. – Noon on Saturday

The National Housing Corporation is offering investors loans to build rural and peri-urban homes. The maximum loan amount is only 1.5 million shillings – and it’s advanced at 13% over up to 10 years

Sasanet investors want to notify partners, bankers, and other companies (including Safaricom) that the company had not refunded investors their funds.

Urban transport gets more expensive as all the major transporters Citi Hoppa, KBS and matatu owners start a blanket 10 shilling per ride fare hike to counter rising fuel prices


  • Celtel territory sales executives (17). D/l is 16/11
  • IT manager at EA Cables. apply thru deloitte
  • Jamii Telecommunications: account managers (3). d/l is 16/11
  • KBR various jobs in Iraq, Afghanistan, Kuwait. But
  • Madison: finance manager, senior investments manager
  • Microsoft: public sector lead account manager – public sector & education solution sales professional (business productivity), infrastructure consultant, MBA graduate
  • Head of ICT services – Standard Group. d/l is 13/11
  • Chief Operating Officer at Renaissance capital. apply to by 19/11