Category Archives: IMBank

Kenyan M&A

The Kenya Competition Authority recently approved for several corporate deals to be completed. Some of them were mere rubber stamping formalities, as the deals originated far away or had little in the way of local competition that would compel the authority to intervene. 

They covered a variety of sectors including: 

Agro-Processing
  • (The acquisition of) The flower growing business of Finlay’s Horticulture Kenya by Lamorna
  • (The acquisition of the) Residual business  of Agrifresh Kenya by Finlays
  • (The acquisition of)  Sarkish Flora Ltd by Africa Blooms Limited.
Oil & Mining
– Acquisition of 100% of Cove Energy Plc by Shell Exploration & Production (Thailand) 
– Acquisition of  100% of Dominion Petroleum by Ophir Energy Plc.
– Pacific Wildcat Resources Corporation acquiring 100% of Stirling Capital  (UK) and Cortec Pty (UK)
– Elsewhere, there are new (and controversial) that have been proposed that mandate for local shareholders to own 25% of petroleum companies and 35% of mining companies (read more) 
Money & Finance
  • Acquisition of 100% of Aureos Capital by Abraaj Capital
  • Acquisition of Grant Thornton Kenya by PKF & Associates (which continues to be in an expansion mode even after taking over DCDM)
  • (The acquisition of) Additional shares in Pan Africa Insurance Holdings by Hubris Holdings
  • Acquisition of Credit Reference Bureau (Holdings) Limited by Transunion Netherlands (part of the credit giant Transunion
  • 62.52% of Micro Africa by Letshego Holdings (of Botswana)
Tourism
  • (100%) of  Ol-Seki Ltd by Hemingways Holdings
Manufacturing & Engineering
  • The acquisition of selected assets of Raffia Bags Kenya by Polycem Bags
  •  The acquisition of 62% of Civicon Ltd by Transcentury Engineering & Contracting
Service
  • The acquisition of 75% of Nairobi Java House by Emerging Capital Partners Africa Fund III. The deal won the AI  deal of the year  award and last weekend was featured on the Citizen TV piece called Who owns Kenya  (video)

Others

  • Shoden Data Systems (Proprietary) by Hitachi Data Systems Europe (a sub-Saharan territory deal)
  • Kingfisher Properties by Mahesh Sanghrajka & Aasheet Sanghrajka.
  • Centro Suburb Ltd by  Westlands Triangle Properties

On-Going

Following on three earlier deals: 

  • Barclays & Absa are back in the news, six years later
  • The shareholders of three bottling companies in Kenya have agreed with a Coca Cola  plan to merge them under a single company Almasi, with one board of directors and CEO and cut other costly production redundancies
  • No word on Kenol. 

 

In the News

Other ongoing deals, yet to be concluded include: 

Money & Finance

  • Deloitte East Africa merging with Haile Solomon & Tekeste (Ethiopia)
  • The I&M Bank and City Trust deal
  • I&M Bank Limited buying 55% of Banque Commerciale du Rwanda
  • EcoBank Kenya pursuing an undisclosed local investment bank
  • UAP Holdings pursuing an undisclosed Tanzanian insurance company

Other

  • Australian firm Aviva Corporation (Australia) selling stakes of Kenyan subsidiary to Africa Barrick Gold (ABG)
  • Copy Cat buying 51% stake of Seal Africa
  • Low cost airline, FastJet which took over the routes of Fly540 in Kenya and Tanzania, also plans to take over the collapsed operations of South Africa’s 1-time airline for $0.12
  • The Woolworth – Deacons deal    

Kenya Bank Rankings 2010: Final Word

From the earlier estimates now there’s a complete list of the published accounts for all commercial banks as at December 31 2010.

1 (1) KCB: Assets of Kshs 223024 ($2.69 billion) [pre-tax profit of Kshs. 11.53 billion ($139 million)]
2 (2) Barclays
3 (4) Cooperative
4 (3) Standard Chartered
5 (6) Equity
6 (5) CFC Stanbic
7 (7) Commercial Bank of Africa needs to raise capital?
8 (14) Investment & Mortgages overhauls Citibank, National Bank, Diamond Trust and NIC
9 (9) Citibank
10 (8) National Bank of Kenya
11 (10) Diamond Trust
12 (11) NIC
13 (13) Prime Bank
14 (14) Baroda
15 (15) Housing Finance
16 (19) Ecobank
17 (16) Bank of Africa
18 (21) Chase
19 (20) Family Bank
20 (17) India
21 (18) Imperial
22 (–) Kenya Women Finance Trust (DTM) new deposit taking micro-financed [assets of Kshs 18.9 billion and pre tax profit of Kshs 464 million ]
23 (22) Fina Bank
24(24) Development Bank of Kenya
25 (29) Consolidated
26 (34) Equatorial (acquired Southern Credit)
27 (23) ABC
28 (28) Giro
29 (25) Gulf African (Kenya’s first Sharia bank breaks even in third year)
30 (31) Fidelity
31 (26) Habib AG Zurich
32 (30) Guardian
33 (27) K-Rep
34 (34) First Community Bank
35 (32) Victoria
36 (33) Habib Bank
37 (38) Transnational
38 (41) Oriental (boosted by other income)
39 (37) Credit
40 (40) Paramount
41 (36) Faulu Kenya: (new deposit taking micro-finance institution) [assets of 4.3.9 billion and pre tax loss of Kshs 164 million ]
42 (39) Middle East
43(43) UBA: slow start in Kenya, but finally started lending
44 (42) Dubai Bank
45 (44) Jamii Bora: formerly city finance bank, and was acquired by microfinance company Jamii)

Investor Choice: December 2010

December is traditionally a slow investment month in Kenya, but not so this year with so many investment offers from a variety of sectors

Recap

– Bralirwa IPO is ongoing for Rwanda’s largest beer company. Nairobi stockbrokers who are facilitating the cross-border deal include Dyer & Blair, Faida, African Alliance and CFC Stanbic

– Deacons set out to raise Kshs 800 million ($10 million) in November. They extended the deadline to early December, and came up slightly short at Kshs 700 million which is still commendable for a low marketed company in a competitive industry with no immediate listing plans

– I&M Bank had a private placement to raise about 2.4 billion ($30 million) and is said to be past the mark

– The Kenya Power & Lighting Company – KPLC Rights issue set out to raise almost Kshs 10 billion ($125 million) in a combination share split, tights issue, government shareholding restructuring. It runs till December 22, but for new shareholders deadline is December 15 and is 50% underwritten with Centum and Equity bank.

– A second tranche of the Kshs 12 billion Safaricom bond program which aimed to raise Kshs 4.5 billion ($56 million) closed yesterday, and announcement is to be done today – (PDF)

– Airline Investors – away from retail investors we have the rarefied world of institutional investors and buccaneers in the aviation space in Africa

– (Via Flight Africa Blog) Jetlink expanding flights to (Asmara) Eritrea while Fly540 is to soon launch operations in Angola and Ghana
– Kenya Airways resumes flights to (Rome) Italy on December 16 which is its fourth European destination
– Recently, Rwanda Air launched flights from Rwanda to Dubai via Mombasa.
– Yemenia resuming flights to Kenya.
– East African, (who may or may not be in business) are promoting flights from Nairobi to (Hargeisa) Somaliland for $620
– And helicopter leasing is getting popular in Kenya, even at rates of $2,000 per hour.

2010 Kenya Bank Rankings Part II

Comparing to last year’s Top 10 list.

I&M Bank: Sits, at number eleven, for the year, just outside the top 10, but made more profit than two of the top banks . I&M had an exciting year, with a November rights issue targeting to raise Kshs 2.4 billion ($30 million); they also launched an e-commerce platform, bought stakes in banks in Mauritius and Tanzania and got investment funding from Proparco & DEG.

10. Diamond Trust (2009 rank 10): Assets of Kshs 58.2 billion ($727 million) and nine month profits of Kshs 2.3 billion ($29 million) – had growth across the board of 30% compared to a year ago and with a good income outlook and very low NPA. Expanding to Burundi while other banks have headed to Rwanda, and Chairman stepped down to take up similar post at the revived Air Uganda.

9. Citibank Kenya (2009: 7): Assets of 63.9 billion ($798 million) and nine month profits of 2.15 billion ($27 million). A quiet year for the bank but ramped up in Q3 this year and that will impact year-end numbers, which were flat before that. MD Ade Ayeyemi moved on to other bank operations, and the bank has been unable to shake off local stockbroker allegations that they are holding Safaricom IPO refunds from investors since 2008

8. Commercial Bank of Africa (2009: 9): Assets of 65 billion ($813 million) and nine-month profits of 1.9 billion ($23.7 million) . A quiet year for the bank which has grown by about 40% since a year ago, but which will soon have to raise compliance capital from its shareholders.

7. National Bank of Kenya (2009: 8): Assets of 67.4 billion ($842 million) and nine month profits of 1.9 billion ($24.8 million). And has ramped up lending including mortgages and seen improved profits. The replacement of long serving CEO is up in the air are Government plans to privatize the bank with plans shifting toward private investor as opposed to offering more shares to the public

6. CFC-Stanbic (2009: 6): Assets of Kshs 104 billion ($1.3 billion) and nine month profits of 1.5 billion ($18.8 million). The sleeping giant created by the merger of two mid size banks is still treading, and though with improved profit, they are still the lowest of the top 10 banks.

5. Equity Bank(2009: 5): Assets of 129 billion ($1.61 billion) and profits of 6.8 billion ($84 million) . For the second year slightly reduced growth to 40 – 50% not the 100% of years past. The bank had a shift in direction towards an agency branch model using mobile phones to reach its 5 million plus customers, and after the rapid growth of m-kesho ( a partnership with Safaricom,), they have in the last two months also signed on with Orange and Essar, tying up 3 of the 4 Telco’s with mobile money.

Diversification has been a mixed bag, with good results from Sudan and M-kesho, but not so (yet) with Uganda, investment banking, and Housing Finance, which while initially unwelcome it appears that HF shareholders would now welcome a merger. Still, this could be the year they clinch the highest profit crown in the Kenya banking sector.

4. Standard Chartered (2009: 3): Assets of 134.6 billion ($1.68 billion) and profits of Kshs 6.1 billion ($77 million) in nine months. Had an over-subscribed rights issue and took over the custody business that Barclays sold in Africa. They make good money from corporate loans and from government securities – they have almost as much paper ($650 million) as they do in customer loans.

3. Cooperative Bank ( 2009: 4): Assets of 141.1 billion ($1.76 billion) and nine-month profits of 4.3 billion ($53.7 million) . overall growth of ~40% with group assets about the same, and diversification has included buying stake in CIC insurance, stock broking and have talked about going into South Sudan and other East Africa countries

2. Barclays(2009: 1): Assets of 177 billion (2.2 billion), with nine month profit of 7 billion ($87 million). This big bank has nowhere to go, with growth of 5% from a year ago, can they buy up some smaller banks? They shed their Africa custody business to standard chartered and got into an m-pesa banking partnership belatedly after pushing their own mobile money platform for two years.
Site of planned KCB new HQ building, opp Equity Bank Centre, Upper Hill Nairobi
1 KCB (2009: 2): Assets of Kshs 218.2 billion ($2.72 billion) and nine month profit of 6.39 billion ($80 million). Had a rights issue earlier in the year, that raised $156 million and they plan to put up a new headquarters in upper hill. But with total group assets of 244 billion, the bank was third in profit behind Barclays and Equity after Q3.

IM The Bank!

Kenya’s I&M Bank has made two bold moves in recent days:

1. The second was the purchase of a stake in a Tanznian Bank, after their venture last year into Mauritius. It will probably be similar to the bank buy by NIC in Tanzania that they (NIC) revealed to their shareholders. But expert analyst @coldtusker points out that it has taken six years for I&M’s foray to bear fruit in Tanzania.

Also, Ratio Magazine just published a timely Tanzania Country Brief which has this comment on the banking sector;

…Tanzania is already home to 25 banks – none of which have managed to bring down the country’s high interest rates (many banks charge up to 25%). There is much opportunity to court new customers, as only 10% of Tanzania’s 40 million people have access to formal banking services. But scarce human resources that have plagued other foreign entrants will also be a challenge…


From ABN Digital: On 27/01/10 CNBC Africa’s Alishia Seckam spoke to Suprio Sengupta from I & M Bank

2. The first was the was the partnership with partnership with VISA that may place I&M at the forefront of the e-commerce banking in Kenya, which though it still has a small debit and credit card base, these consumers now have the access and a platform to make online payments as well as for local merchants to sell their goods, and receive payments, online.