Category Archives: Diamond Trust

Convenient banking

making trades offs as convenient banking is not the same thing as cheap banking

Equity has been the fastest growing bank in the country over the last few years. It has won customers, now 1+ million, and has sent bigger banks banks back to the drawing board to woo & retain their customers.

However, while banking with them may not be cheap for a business, it is convenient, and offers finance and flexibility to an upcoming business. People coming from abroad complain about the cost of making mobile calls here – saying they are expensive. But compared to what? A taxi driver will make a 30 shilling mobile phone call to secure a 2,000 shilling job as his phone is his office.

Same with Equity their low entry minimums suit individuals and start ups. And while some of their charges are rather hefty (3% for ENC and 10% of amount for a temporary overdrafts), as a businesswoman told me today, their quick decision making and the fact that they are the only bank that can offer these facilities to her make them the optimal bank for now. Getting cheques cleared, guarantees, and payments to suppliers matter more to her now, than the cost of these services, and help her build a credit record for the future. Once she is more established,. she will look question the transaction costs and have other banks now wooing her business.

Other banking briefs

According to Africa confidential, Kenya is favored to be the new host country for the African development bank, with Botswana second in the ranking. However Ivory Coast is back in the running following the signing of a peace accord. More on homeless banks.

The CBR Bank rate was lowered from 10 to 8.5%

The Government has commissioned a study to look into the low uptake of youth enterprise fund and agriculture development funds. They are blaming banks for asking borrowers for collateral and 3 month bank statements – terms which were not spelt out in the funds. from an offline story from the East Africa:

CFC Stanbic bank pre –merger comparisons

Diamond Trust acquired a majority shareholding in Diamond Trust in the just concluded rights issue.

Equity Bank
– Looking to enter the money transfer business
– To buy Housing Finance bank – what do the bloggers say?

Family bank got admitted to the CBK bank clearing house earlier in June, just a few weeks after being licensed. Family took advantage and pressed for an exemption (on a two year waiting period), similar to that granted to Equity Bank when it also became a bank. from an offline story from the standard

National Bank is seeking to commit Ketan Somaia to civil jail over a 17 million debt

Pyramids schemes continue to
thrive despite numerous warnings. However, some schemes feeling a cash pinch are passing the blame to the central bank who are limiting the interest they can pay depositors to 10% p.a. – before they were paying over 10% per month.

Diamond Trust EGM

Diamond Trust Bank will have an extraordinary general meeting (EGM) on December 21. The company has not amended its articles of association since 1982 and want to update them to reflect new capital structures, governance, CDS and the electronic age, among others.

Jubilee Insurance will have an EGM on December 18

The various proposed amendments will have outcomes including:

  • New capital: Creation of preference shares and also clears the way for a share split.
  • Shareholders who don’t approve of company actions can have their shares forfeited. E.g. minority Serena shareholders who did not approve the conversion to TPSEA
  • Modern technology: Allows notices and other documents to be e-mailed to shareholders. (This can save costs; i.e. the company has 10,000 shareholders and budgeted Kshs. 7 million for printing and postage of the ongoing rights document). . Also allows board meetings to be held by teleconference or video conference, allows dividends to be paid by electronic means (e.g. bank transfer, direct debit) not just by cheque and notices can be sent to shareholders outside Kenya
  • Super shareholders? New articles recognize that 10 members constitute a meeting and allow any director or any 2 members to convene an EGM. The company’s top 10 shareholders own 48% of the company while the next 50 own another 10%.
  • Governance: recognizes that directors are not disallowed from doing business with the company provided they disclose this to fellow directors and also don’t vote on such issues. Also, fellow directors may remove a director who misses 3 meetings.
  • Cap on underwriting commissions at 10%. (Another cost-saving measure since the on-going rights issue has budgeted placing commissions estimated at 28%). Also, stockbrokers may be paid in the form of shares.
  • Makes provisions that stem from the 2006 budget speech where the Finance Minister proposed that any dividends unclaimed after 7 years be returned to the CMA’s investor compensation fund from where individuals can claim when they resurface.
  • A bankrupt person may vote by proxy

Charterhouse depositors cry foul
Charterhouse Bank and depositors are asking (in a full-page newspaper notice last week) why was their bank, with no liquidity problems, shut down without sufficient explanation and why they are still denied access to their funds almost six months later even after a court had lifted the order? The accounts of the bank remain intact and they are still earning interest on almost Kshs. 3.1 billion in deposits there as the statutory manager has invested surplus funds in government securities. Only staff costs have shot up reflecting the additional managers deployed from the central bank.

Diamond Trust Rights Issue

Diamond Trust Bank has announced a rights issue which will be presented for shareholder approval at an extraordinary general meeting on November 1. D-Trust has been my best performing recent share, bought at 27/= in September 2005, and now trading at 84/=. Hat tip to Gathinga and Coldtusker for their comments on the capital issue after the AGM in May.

Black eyed TI
Got the latest Adili report from Transparency International Kenya (TI Kenya) in the mail yesterday. It’s hard to take the organisations findings on corruption seriously after the mud-slinging between the board and executives over the last two years.

Volley-low
Officials who threatend Kenya women volleyballers who had complained about unpaid (and promised) allowance, are also going to receive allowances as well even as the team is stll trying to raise money for the Japan trip.

Your Shell franchise here
Shell Oil is llookng for retailers to open/operate new stations in Naiorbi, Mombasa and Nakuru. You must be able to raise 10 milion shillings, and the deadlien is October 18.

Language of the future
UoN has passed out first graduates at its Confucius Institute (Chinese language centre).

Read on the launch.

Wilted flower
What should be an interesting story on the threat to the Kenya flower industry from Ethiopian incentives, is sadly hidden behind a veil superior posturing that annoys rather than educates.

Foreign companies “who provide homes, education, healthcare, water, electricity – everything“, will flee the “endemic corruption and rising insecurity” of Kenya.

Left out of the story are Kenyan-owned flower companies who are not going/able to pick up and move to Ethiopia – and who still have to comply with expensive & stringent EU conditions in order to continue exporting to Europe.

Jobs
Policy research officer Africa at Action Aid. Apply to vacancies@actionaid.org 15 October

Southern and Eastern Africa Analyst at Control Risks (London). Apply to reference437@control-risks.com by 20 October.

Parliamentary Service Commission: Senior deputy clerk, principal research officer, principal budget officer, principal legal counsel, budget officer I, and budget officer II. Apply through pricewaterhousecoopers at ess.ke@ke.pwc.com by October 20.

Precision Air Tanzania (49% KQ owned): Captains (6), first officers (3) and sales manager. Apply through PWC at pwrecruit@precisionairtz.com

Software developers at Sasanet. Apply to coders@sasanet.co.ke

UN HABITAT
Details at their site: http://www.unhabitat.org.
– Chief, Urban Environment Section, P 5, Nairobi. Deadline is 10 October
– Head, Shelter Branch, D1, Nairobi. Deadline is 22 October.

Food aid specialist at USAID. Apply to hrnaiorbi@usaid.gov by October 20

Team assistant at the World Bank’s Water and sanitation program (WSP) apply to wspaf@worldbank.org by 19 October

Deputy managing director and officer manager at an un-named property management company. Apply to
gd@africaonline.co.ke by 19 October.

Diamond Trust AGM

Diamond Trust Bank held their AGM at the Serena Hotel this morning. The uneventful meeting was held in a very cold room, which may have contributed to the short meeting time of 30 minutes excluding shareholder questions.

Shareholder questions

  • Pay more dividends:  Join other companies in the Aga Khan Portfolio (Jubilee, Nation Media, Serena) and pay a more liberal dividend somehow.
  • Increase share capital: Bank said they have increased Tier II capital to support expansion and the board is also looking for more avenues of capital.
  • Not enough Nairobi branches to serve customers: The Bank plans to open another city branch as well as one in Zanzibar to go with recent ones in Dar es Salaam and Arusha. Also, they have partnered with pesa point who have put up almost 120 ATM’s.
  • Few tellers at Nation Centre Branch. Bank has plans to refurbish that Branch, and also Kengen IPO was blamed for the recent congestion there.

Goodies – Bila’s Having no bags or gifts is one way to cut down on attendance, Snacks were offered after the meeting, but patience is not a virtue among shareholders – those at the back of the line found all the samosas and snacks in the hands of those who were first to get served – kind of like the 2005 Total AGM. They probably added more food later but I had to bounce – don’t think I’ll be back next year cheap mo fo’s. At least the press got a one-page handout from a PR firm explaining the bank’s profitability and regional expansion plans.

Flat fee Banking

Flat fee bank accounts are the closest thing to free-checking accounts here. NIC was the first with MOVE (launched in November 2003) and since then other Bank’s have tried to imitate the MOVE concept whose main feature was an offer of a variety of bank transactions – all for a flat monthly fee. A comparison of the offers in order of rank;

1. Diamond Trust Open Plan:(490/= shillings per month)
Diamond Trust Open Plan includes ATM card, one chequebook each year inward salary processing, unlimited deposits & withdrawals from ATM and quarterly statement internal transfers. The Bank also has Open Air: (For 690/=) which comes with spouse ATM card, free internet banking, 2 chequebooks a year, and monthly statement) and Open Sky: (For 790/=) which offers one a designated relationship manager, 3 chequebooks a year, 1 free bankers cheque per month and unlimited standing orders inclusive of loan instalments to other banks. DTB currently has 11 ATM locations (9 in Nairobi).

2. NIC Move (800/= month)
MOVE includes a free ATM Card, 50-leaf cheque book, incoming salary transfers, monthly Standing orders & direct debits, one free Bankers’ cheque per month, internet banking, monthly statement, SMS Banking and MOVE Zone Locations have loan/account representatives and self-help PC available from 8 a.m. to 8 p.m. MOVE has 13 (11 in Nairobi) ATM locations.

3. Standard Chartered All-in-One (750/= per month)
Stanchart includes ATM card, chequebooks, standing orders, local/foreign telegraphic transfer, traveller’s cheques, local ATM withdrawals, free foreign currency purchase/sale, free DEBIT card and one free banker’s cheque per month. Has the largest ATM network (58) out of the four banks.

4. CFC (Saturday only)
CFC Bank has some transactions free on Saturdays only including interim statements, chequebooks, banker’s cheques/drafts, and traveller’s cheques. (All are subject to minimum balance of 10,000 maintained throughout the month, otherwise a fee of Kshs. 500 per month applies)