Category Archives: Citibank Kenya

Shares Portfolio May 2013

Performance: Compared to last quarter and year ago, the portfolio is up 9% in value from February (excluding new investments), while the NSE 20 share index is up is up 7.5% since February 2013.
The Stable
Barclays ↑
Bralirwa (Rwanda) ↑
Centum  (ICDCI) ↑
Diamond Trust ↑
East African Portland Cement ↓
Equity Bank ↑
KCB ↑
Kenol ↓
Safaricom ↑
Scangroup ↓
Stanbic (Uganda) ↑
Unga ↑
Changes
In: Centum, Portland Cement
Out: Total, EABL
Increase: Equity, Kenol, Safaricom
Decrease: None
Best performer: Safaricom (up 30%), Equity, Stanbic  
Worst performer: Kenol (down 29%)

Looking forward to:

– Dividends from Equity, Barclays, KCB, Scangroup, Bralirwa and Safaricom.
– Coldtusker writes about upcoming rights issues at the NSE including Uchumi and National Bank. 
– Still yet to venture into Kenya government treasury bonds a year later.

Other Events:

– Access Kenya is being bought out by Dimension Data and will be de-listed from the Nairobi stock exchange – pending regulatory approval, shareholder approval, and no better offers.
– Citi released bearish reports during the Kenya election on Equity and KCB based on unsustainable interest rates, and growing non performing loans, among other issues in the Kenyan banking sector. 
– Citi also had a report on Kenya Airways predicting two more years of losses, difficulty financing Boeing 787 planes without raising more capital, that is probably beyond the appetite of current KQ shareholders and other NSE investors. It mentioned the possibility of Etihad Airways extending their new code share partnership into an investment in KQ, but the airline has to remain 51% Kenyan owned in order to enjoy preferential African route rights. Other large shareholders in the airline are teh Government of Kenya, KLM airline, and the International Finance Corporation.
– The Safaricom 2013 results (PDF) results released this morning showed that revenue grew by 16% to $1.45 billion (including MPesa revenue of $256 million) and profit before tax grew 47% to $300 million. 
– Umeme of Uganda which cross-listed at the NSE has still not had a trade in Kenya despite some okay performance in the last few months.

2009 Kenya Bank Rankings Part II

10. Diamond Trust (2008 rank 11) : assets of 44.9 billion ($600 million) and nine month profits of 1 billion ($14.2 million). Loans (28.6 b) grew faster than deposits (33.1b), but expenses also grew faster than income. Neck and next with NIC and I&M banks with 44 and 41 billion in assets in position 11 and 12 respectively.
9. Commercial Bank of Africa (7): assets of 52 billion and nine month profits of 1.39 billion. Deposits flat (40 b) but loans (28.2 b) are up 20% this year and with GOK paper up 77%, however income and expenses are lower than 2008.

8. National Bank of Kenya (9): assets of 55.2 billion and nine profits of 1.4 billion. The bank is in great demand with a planned further divestment by GoK which may attract significant interest next year. For 2009, NBK has had a remarkable 40% growth this year, with 27% loans (12 b) and 48% in deposits (41 b)

7. Citibank Kenya (8) assets of 55.6 billion ($742 million) and nine month profit of 2.3 billion ($31 million). while embattled in the US, Citibank had a slow down in growth of loans (22.7 b) and deposits (29.7 b) compared to ‘08 but will still record a healthy +20% growth for year 2009.

6. CFC Stanbic (4) assets of 83.5 billion and nine month profits of 981 million. Bank had no growth in loans (43 b) and assets, but sitting on a load of cash – almost 16b billion (~$214 million)

5. Equity Bank (6) assets of 92.4 billion and nine month profits of 4.2 billion. Equity is still one of Kenya’s fastest growing banks though the 100% growth margins have tapered off to more manageable 30%+ for loans (55 b)and deposits (63 b) as it expands regionally in Uganda and Sudan and continues to roll out unique banking products.

4. Cooperative Bank of Kenya(5) with assets of 98 billion and nine month profits of 2.9 billion. The bank continues its 20%+ annual growth a year after listing and has diversified into investment banking. However their re-jigged executive shareholding following n ESOP is a sore point to be debated further.

3. Standard Chartered 3 with assets of 122 billion ($1.6 billion) and nine month profits of 5.2 billion ($69 million). Despite my earlier negative outlook, stanchart was a late bloomer and has come on strong: significantly, unlike other big banks, stanchart grew faster this year compared to 2008 – with 18% growth in deposit (89 b) and loans (40 b) while profits are up by 40% as income is up 23% compared to just 5% for costs while spearheading technologial products & services to their customers. Also increased investment in government securities by 77% and holds ~ Kshs. 36 billion now.

2. KCB (2) assets of 163 billion ($2.17 billion) and nine month profits of almost 5 billion ($66 million). KCB group is larger than Barclays in assets (185 b to 168 b) but has a smaller asset base than last year. In 2009 deposits (133 b) and loans (93 b) are up over 20% but profit is up just 3% – income is up 11% but expenses are up 15%, as KCB continued its expansion, opening six branches in November and also expanding in Rwanda Uganda, South Sudan and soon to Burundi. The bank also continues to weather occasional storms against it sustainability with triton and now Kenya planters coffee union.

1. Barclays Kenya (1)assets of 168 billion ($2.25 billion) and nine month profits of 6.63 billion ($88 million) . Barclays shrunk by 2% compared to growth of 17% a year ago with lower deposits (123 b) and loans (96 b) compared to a year ago but with profits ahead of last years pace, perhaps boosted by GoK securities investments which are up 23% this year.

2008 Kenya Bank Review

What happened in 2008?
See also half year. (who?, what? means no news of note)

ABC: (25) who?, what?
Bank of Africa: (18) Quiet expansion becoming big in asset finance and the bank of choice for French interests, with a new club for small business owners
Barclays: (2) steadying their 2007 rapid growth and expansion in the retail sector, launched two tranches of bonds at affordable prices which made CBK notice and will go into mobile messaging next year
Baroda: (14) Going retail, and opened new branches, no longer playing safe and investing less in GoK securities
CFC Stanbic: (4) merger (takeover) by Stanbic formalized. Collapse of small brokers a boon as they are seen as being safe(r). Will open branches and may need to raise capital next year. Note: If the merger had been planned this year (instead of last) it would have cost ½ as much
Chase (22) one of the fastest growing banks in ’08, ventured into stockbrokerage, but may need to raise capital next year
Citibank Kenya: (8) best return on assets in sector, but with aggressive off balance sheet. Still unclear how much parent troubles will impact subsidiaries in Africa.
City Finance: (43) the country’s smallest bank effected a capital reduction. New owners yet to settle in, but may achieve a slight profit this year
Commercial Bank of Africa: (7) would be a beneficiary of American business interests following Citi bank woes, if it didn’t also own 1/3 of equally troubled AIG Kenya. Also CEO got caught up in Uchumi corruption case and may need capital next year.
Consolidated: (31). Cabinet has approved sale for next year and the deposit protection fund has always planned to exit. 2008 will mark the third year of (modest) profits for the bank, so its eligible for an NSE listing or IPO
Cooperative: (5) went ahead with an IPO and NSE listing late in 2008 in a difficult market to raise capital for expansion
Credit: (35) who?, what?
Development Bank of Kenya: (26) in play next year as GoK (ICDC owns 90%)plans to sell shares in the development finance institution to the public or private investors
Diamond Trust: (11) continued regional expansion with more investments in Uganda and Burundi, and also had a second rights issue to raise capital.
Dubai (42) quiet year, will make a loss
Ecobank: (19) arrived in Kenya big and are setting up retail presence (nairumor that they are the bank Equity emulated to succeed). Came up short in a (huge) pan-African capital raising move, but plan to enter stockbroking next year
Equatorial: (30) activated investment banking wing, but denied they were being sold to Libyan investors
Equity: (6) stellar growth continued though January ’08 showed an exposure to political undercurrents. Bounced back with branches in Nyanza, agricultural products and participation in the Safaricom IPO. Bought a Ugandan bank and are investing in S. Sudan in a diversification move they hope to take their model (bankign the unbanked) to more African countries.
Family Bank: (20) quiet year, but income tripled in ’08 and new CEO was confirmed
Fidelity: (33) who?, what?
Fina: (21) the Rwanda turf was invaded by a host of other Kenyan banks led by KCB. Continued a much heralded focus on SME‘s and expanded into Uganda.
First Community: (40) the second Shariah bank got off to a much quieter start than Gulf and will record a major loss this year from setting up operations.
Giro: (27) who?, what?
Guardian: (28) who?, what?
Gulf African: (36) new Shariah bank seems to be well received and respected by business people. Opened several branches and will also assist the GoK youth fund with loan products, but will make a loss this year from start-up costs.
Habib AG Zurich (24) who?, what?
Habib Bank (34) who?, what?
Housing Finance: (15) had a fully subscribed (just) rights issue that raised Kshs. 2.4 billion and Equity Bank now own ¼ of the institution.
Imperial (16) who? what?
India (17) who?, what?
I&M (12) new formal name for the former investment & mortgages bank, also got new shareholder capital (two euro dev banks) and opened new branches
KCB (1) Kenya’s top bank this year had another rights issue, rebranding and supported expansion to Uganda, Tanzania, South Sudan in addition to being cross-listed.
K-Rep: (23) surprising loss will be recorded as it appears the post election violence impact small enterprises they financed.
Middle East: (38) who?, what?
National Bank of Kenya: (9) went big in the Safaricom IPO (and to a lesser extent with Co-Op). Some activity expected nest year as the government and perhaps NSSF shares may be in play for a strategic investor now that their balance sheet is largely cleaned up
NIC (10): rebranded again this year, phasing out MOVE and establishing new branches as a one-stop shop for corporate, asset finance, investment banking (acquired Solid Stockbrokers) needs.
Oriental: (41) former Delphis bank should have an operating profit this year
Paramount Universal: (39) who?, what?
Prime: (13) a year of rapid growth for this bank, big with Asian business owners, but may need to raise matching capital next year
Southern Credit: (29) who?, what?
Standard Chartered: (3)steady, least aggressive of the big banks in Kenya went after the retail crowd this year with personal loans, cards and youth accounts. Will launch mobile app next year
Transnational (37) who?, what?
Victoria: (32) who?, what?

Major Stories
1. CBK eternally optimistic governor, lowered bond prices, lowered cash ratio and – but statistical /economic forecasts called into question, and mired in sale of the Grand Regency Hotel
2. Safaricom the bane of banking sector was M-pesa and the company’s IPO
3. Capital raising: through right issues, private placements and IPO (Co-Op) more are expected

Coming soon
banks expected in 2009
– UBA
– Faulu or KWFT

Bank waters

In the pool

Diving in: Another West African bank giant UBA follows Ecobank after apparently having secured a banking license to operate in Kenya.

Treading in the shallow end: Still finding their ground are the new Islamic Banks – Gulf African and First Community that started business last year. They are likely to be the only banks that will record losses of at least Kshs. 200 million each as their new branches and staff continue to reach out and educate customers on a new way to bank.

Had enough swimming?:
(i) Morgan Stanley who were supposed to introduce long term foreign investors to Kenya with a five year window or longer, but instead brought in short term investors at the expense of the Government and othrr investors who took out their profits in a week. Another lesson learnt a long way back from the IPO.
(ii) The Kenyan unit of Citi is on track to rake in profits of $50 million this year on the back of aggresive trading, but will it be enough, or will it be bled off by the parent unit? And who would buy it and its lucrative American interest-linked business portfolio?

Safaricom IPO: Day 2

Apply online: For Safaricom shares, check out the Official IPO site from Citi

Bears bleed
– NSE Bears: For the second day of the Safaricom IPO era, only 3 NSE shares rise, same as on Friday, while the rest drop or are flat.
– Farewell: To Bear Stearns sold for $2 a share, down from $170 a year ago and 7% of what it was worth on Friday.

Vultures circle:
Beware of loans for shares
– Equity Bank offering up to 80% finance for the Safaricom IPO
– Fanikisha account from Transnational Bank offering 70% finance towards the IPO

edit – We’ve been Punk’d!
Corporate blog: A big salute to Equity for breaking another milestone – presenting the first official bank blog – here’s the Equity Bank Blog. a WIP, but keep it up, stay strong, relevant, and up-to-date
Thanks JP for looking out