Category Archives: KCB

Kenya’s Top Banks in 2022

Spire (38th in assets), the smallest bank in the country, had been up for sale, and Mwalimu Sacco announced that they would not be putting in any more capital in the Kshs 3.5 billion asset bank to bury a bad investment made in 2015, but still faces resistance from some stakeholders. Equity Group (2) agreed to buy Spire‘s assets in September 2022.

Access, the largest bank group in West Africa, bought Transnational, the 33rd largest bank in Kenya in 2019 and renamed it. Then in June 2022, Access announced that they would take over Sidian Bank (20) with Kshs 43 billion of assets, by buying a majority stake from Centum for Kshs 4.3 billion. 

President William Ruto announced at the Nairobi Securities Exchange in October that Credit Bank (27) along with Bio Foods were on a path to floating their shares at the NSE. He encouraged the private sector to join the new government in working to revitalise the NSE and promised 5 to 10 public listings – and where Development Bank (29) may also feature. 

First Community Bank (26) overcame a mini-run in October and assured panicked depositors that their funds were safe.

Top 10, by assets in June 2022.

10. Bank of Kigali, which is cross-listed in Nairobi. 

9. I&M.

8. Stanbic Bank. 

7. Diamond Trust. 

6. Standard Chartered. 

5. Absa Bank Kenya.

4. NCBA briefly edged ahead of Co-op for 3rd in the assets race this year.

3. Co-operative Bank. 

2. Equity Bank have a slight edge in group assets over KCB Group (both at Kshs 1.26 trillion) after buying two banks in DRC.

1. KCB Kshs 887 billion assets and Kshs 23.8 billion profit as of June 2022 and then bought into DRC before the end of the year. 

$1 = Kshs 118 in June 2022.

KCB buys DRC’s TMB

KCB Group Plc has completed the acquisition of DRC-based Trust Merchant Bank (TMB) and now owns an 85% stake in the bank that is estimated to have an 11% share of the Democratic Republic of Congo banking sector, after obtaining all regulatory approvals.

KCB will offer banking, insurance and trade finance services using TMB’s brand, 109 branches and customer relationships built over its 18 years. In 2021, the Banker named (Trust Merchant Bank) as the “Bank of the Year” in the DRC.

Bank of the Year Awards 2021

The Banker magazine is announcing its “Bank of the Year” awards for 2021 today. The awards are grouped by different zones of winners for the Americas, Europe, Middle East & Africa, Asia and overall global.

For Africa, the winners for best bank in different countries were: Algeria (Citi), Angola (Banco BAI), Botswana (FNB), Cabo Verde (Banco Interatlântico), Comoros (Exim Bank), Democratic Republic of Congo (Trust Merchant Bank), Djibouti (CAC International), Egypt (Banque Misr) and Guinea Bissau (Orabank).

Kenya’s bank of the year was KCB, then Mauritius had SBM, Morocco (Bank of Africa), Mozambique (Millennium BIM), Namibia (Windhoek), South Africa (Nedbank), and Sudan (Omdurman National).

Multiple award winners include Ecobank (best in Equatorial Guinea, Gambia, Togo), Equity Bank (for Rwanda, South Sudan, Uganda) and Stanbic (for Ghana, Tanzania, Zimbabwe)

Finally, the United Bank of Africa (UBA) won best bank in thirteen countries across the continent – Benin, Burkina Faso, Cameroon, Chad, Congo, Cote d’Ivoire, Gabon, Guinea, Liberia, Nigeria, Senegal, Sierra Leone and Zambia. The UBA Group also won the overall “bank of the year 2021” for the Africa region.

KCB 1923 AGM: Optimism amid political disturbances

In May 1923, the East African Standard published a report from a bank AGM.

Mr. Robert Williamson, the deputy chairman of the National Bank of India addressing shareholders at the annual meeting yesterday, made a brief reference to the position in East Africa today and in the course of his remarks, suggested considerable improvement in the prospects for both trade and agriculture.

Mr. Williamson said the export trade of the country was more active and its products such as maize, coffee, and hides had found a ready market. The Uganda cotton crop, although it would not realize the original estimate of about 100,000 bales, would be fairly large and should assist in the off-take of imported goods through the buying power produced from its sale.

“The repeal of the Kenya income tax and revision of customs duty should also improve matters. There are,” he added, “certain political disturbances locally almost inseparable from the growth of a young country with a mixed population such as Kenya has, which we all trust are capable of adjustment. The outlook in this direction is promising as deputations from the districts are coming to London to interview the Secretary of State for the Colonies.”

A dividend for the six months ended December 31st, last at the rate of 20% per annum was agreed to.

More:

The National Bank of India was the top bank in colonial Kenya. It is the oldest bank in the country and is today known as KCB. 

Which way the bank branch?

This month saw Family Bank open a branch in Eastleigh, its 92nd in the country. Family is one of the pioneers of paperless branches and had opened another branch in December near the large Wangige market to serve traders. Eastleigh is an important cog of Kenyan supply chains and is estimated to have the second-highest density of traders, second only to the Nairobi CBD. Despite advances in mobile transfers, small traders are still heavy users of cash for transactions.

Then today Diamond Trust announced the consolidation of six branches that are adjacent to each other: Oval and 9 West (both to Westgate), Eastleigh to Madina Mall, Garden City to TRM mall, Jamhuri Street (to Malindi) and Kago Street (to Eldoret). The bank asked customers to continue using alternative channels while staff will be redeployed to other branches and business units.

We can probably expect to see more branch consolidations or closures as two groups KCB-NBK and NCBA (CBA & NIC) continue to refine their new operating structures. CBA and NIC did some closures last year.

When KCB announced their third-quarter 2020 results, they shared some interesting details about branches and the march to digital. KCB branches did 2% of transactions in Q3 2020 compared to 5% the previous year. Also, there was a 16% decline in transactions done per day by branch tellers from 60 to 50, while customers did 43% fewer transactions (5.8 million compared to 10.2 million) than in the previous year. KCB customers did 77% of their financial transactions on mobile phones, 17% at agents / internet / point of sale (cards), and 4% at ATM’s. More ATM’s now accept cheque deposits, not just cash, and also act as 24-hour M-Pesa agents.

The Central Bank of Kenya’s Supervision Report for 2019 shows KCB with 203 branches, followed by Equity with 171 (and 12 sub-branches), Co-op Bank 152, Absa 107, Family had 92 in 2019, NBK 78, and Diamond Trust 70. Between 2018 and 2019 there was a drop of 16 branches from 1,505 to 1,490 with 7 of them in Nairobi that ended 2019 with 593.  NCBA has 37 branches but serves the largest number of bank customers in Kenya by far, 31 million thanks to M-Shwari, its partnership with Safaricom.

Outside the country, there is growth as Kenyan banks operate 316 branches in the region, up from 207. They are led by Equity that has 44 in DRC and 39 in Uganda,  Equity has a total of 116, followed by Diamond Trust with 68 (36 in Uganda, 28 in Tanzania, 4 in Burundi)  and KCB with 60.

During Covid-19, foot traffic has reduced at malls, offices shopping centres and bank branches. This has also been due to the growth of online shopping that has taken off exponentially, and many facilities now have dedicated desk and parking spaces for motorcycle delivery riders.

No sign yet of banks moving to share branch spaces with each other but there is less need for banks to be on the ground floor of buildings, which is usually more costly. Also, shopping malls tend to have a banking floor (top of Garden City mall) or ATM corner where several bank services are grouped.