Category Archives: CFCStanbic

Bank Sold

Name this bank?
The deal of the year brings together Stanbic and CFC Banks merge together and is expected to be finalized next month with only Central bank and CMA approval left.

The combined, but yet to be named, bank will have assets of over 55 billion shillings ($800 million), deposits of 43 billion, loans of 30 billion and a pre tax profit as June 2007 of 934 million ($14 million)

Mzalendo bank account
Commenting on the report on bank charges released this week, The Governor of the Central Bank called for a Mzalendo bank account which would probably be akin to mzansi from South Africa which is a low cost account at several banks (with wide branch networks – e.g. KCB, Equity, Postbank) that has similar features and charges at all the banks

banking is not cheap

A recent report released on the banking sector shoed that banking not cheap is not cheap for most account holders .

This should not be a surprise to the public who read about the bank profits or the authorities who are sent all charges and tariffs by the banks each month

There’s already been grumbling from research firms ho say a local firm could have carried out the survey and some banks who say the report is inaccurate.

Earlier, some advertised banking is unexpectedly not as cheap

CFC Stanbic Bank

CFC Stanbic Bank is the official name of the proposed new entity created by the merger of the CFC and Stanbic banks’ pending approval from among others shareholders, Capital Markets Authority, Central Bank of Kenya (Minister of Finance).

The merger makes sense in that the 9th and 10th largest banks (both around $350m in assets) can merge to become the 4th largest bank in the country (after Barclays, KCB, Stanchart)

Sticking points are that the deal is structured to include the creation of new shares (113 million) that will be transferred to Stanbic in addition to buying a majority of Gambit shares (currently the largest shareholder in CFC). Gambit will still remain as the 4th largest shareholder in the bank after the merger.

To sweeten the deal, CFC Stanbic Bank will remain listed on the NSE and Stanbic Kenya will be a wholly owned subsidiary. Also, the statement points out that their branch networks complement each other, so perhaps only Mombasa (where they, and most banks, have branches on Nkrumah street) and branches in Uchumi stores may need a workout.

When the story first broke last year (despite having a caution), it sent CFC’s share price up 10X (to about 900 shillings) and this notice also advises shareholders to exercise caution in dealing their CFC shares until further announcements are made. The announcement was released on Friday (but not yet up on NSE site), and published in the newspapers on Saturday to perhaps dampen the speculative mood/euphoria and allow careful analysis to set in before Monday.

(I don’t have CFC shares but they have been very good stockbrokers to me. Unrelated to this is, I have Stanbic Uganda shares)