ABC; assets up 16%, deposits 17 and loan 7%, income is up 12% but expenses up 17% with no growth in 2008. Too early to tell about kisima at this indigenous bank>
Bank of Africa : deposits up 20% and loan 34%, income 51% with expenses up 41% but NPA also up 59%. French bank, quiet style, but making more marketing efforts to shore up size.
Barclays: assets up 22%, profit 21%, deposits 22% and loans up 30%. Income is up 35% from a year ago but expenses up 45%. In 2008, deposits are up 18% but loans up 1% – change of direction? Did not actively participate in Safaricom, and this big bank everyone (unfairly) watches to see how they react to Equity Bank
Baroda: profit up 31% deposits 9%, and loans up (staggering for them) 57%, in 2008, both income and expenses are up 29%, and though deposits are flat, loans are up 25% – no longer playing safe
Chase: asset up 76% deposits 58% and loan 88%. Income is up 48% but expenses up 75% and NPA 86%. in 08 loans up 29% and deposits up 51% at this fast growing local bank which has now ventured into stockbrokerage as Gencap
Citibank: assets up 65% and profit up 74%. 2008 looking even better as income is up 49% compared to just 7% in expenses, and remains immune (and insignificant) to parent turmoil
City Finance: assets up 2% , deposits up 12% strategy shifting with shifting bank with loans down 59% government securities and placements up by higher margin from a year ago. Just 8 million in staff costs in six months?
Commercial Bank of Africa: (CBA) assets and profit up 21% loans up 52%, and income up 23% compared to expenses 26%. Increased lending in 08 with 36% loan growth since December. Blue chip bank adjusting to the times, quietly did Safaricom IPO and dabbles in insurance
Consolidated: assets up 6% deposits 24% and loans 36% – with income and exp up 10%. Up for sale, can’t list so likely to be sold privately, and hopefully without controversy
Cooperative (Co-op) : asset up 23% profit 51% loan 44%, and NPA down 54% but insider lending up 40% from a year ago. IPO set for October 20 this year – but has it cleaned up enough legacy bad debt?
Credit: asset up 23% profit up 36% deposits up 25% and loans 44%
Development bank of Kenya (DBK) – assets up 33% deposits up 41% and loans 53%. The
Development financier is up for sale by the Government (ICDC)
Diamond Trust: asset up 40% deposits 37% loan 34%, income up 45% but expense up 64% as bank continues its expansion in Kenya, Uganda Tanzania and Burundi (every other bank says Rwanda)
Dubai Bank asset up 5% deposits 8% income 18% expenses up 13%, somehow translating to profit rise of 85%
Ecobank (formerly EABS) assets and deposits up 4%. Income up 34% and expenses up 10%. The parent Ecobank is currently raising $2.5 billion, (equivalent to Barclays Kenya assets) – showing how far Kenyans banks have to go in the big leagues
Equatorial: assets up 26% deposits 29% , income 21% but expenses up 31%, with no growth in 08
Equity 100% growth in assets loans and profits, and 78% in loans. Income up 140%, with expenses up 106% from a year ago. How long can this exponential growth go on?
Family bank : assets up 39% deposits 23% loan 52%, but income has tripled as have expenses at ‘Equity Blue’
Fidelity: asset up 29% deposits 36% loans 40%
Fina: Assets up 13%, deposits 14% and loan 32%. Income up 26% but expenses up 47% leading to a 24% lower profit. Many banks encroaching on the turf they created in Rwanda
Giro: assets up 1%, , deposits flat but loans up 10% , income up 26% with expenses up 10% – also leading to a surprising 86% profit surge
Guardian: assets and deposits up 11%. Income up 37% with expenses up just 26% leading to a profit surge of 76%
Habib AG Zurich: assets up 10% profit 22% deposits 13% and loans 31%
Habib Bank: assets up 4% from year ago, but no growth in 2008
Housing finance: asset up 34% deposits up 15% and loans up 27%. But profit down 20% (income up 1% while expense up 5%). in 08 deposits are up 5% and loans up 15%. Raised new funds from shareholders and will expect a boost from Equity Bank as anchor shareholder
Imperial; assets up 16%, deposits and loans up 22%. One bank reputed to have the fewest customers, but massive profits from them
(Bank of) India: asset and loans up 15%, with profit up 35%
I&M: asset and loans up 33%, income up 25% as expenses up 16%. Shareholders funds up 60% from new investors and the bank is opening new urban branches
KCB: assets up 66%, and deposits up 20%. Profits are up 77% (income up 50% with expenses up 38%) from a year ago. New funds raised, going regional in eastern Africa and will be cross-listed as well.
K-Rep: assets up 13%, deposits 15 % loans 10%. Income up 12% but expenses up 33% leading to a sharp drop in profit
Middle East: income up 15% and expenses up 33%
National Bank of Kenya assets up 3%, deposits and loans virtually unchanged, but income up 16% as expenses up just 4% leading to a surge in profit of 46% . government shareholding is up for sale
NIC: asset up 37% deposits 31% and loans 39%. Profits are up 38%, as income is up 26% with expenses up 17%. Expanding their stockbrokerage operation, and also opening new branches,
Oriental: assts up 12% deposits up 32% and loans 16%
Paramount Universal: assets up 13% with deposits and loans up 17% at one of the smallest banks
Prime Bank: super growth, with asset up 59%, deposits 57%, loans 66%. Income up 56% with expenses up 30% leading to a surge in profit up 98%
Southern Credit; assets up 9%, deposits and loans up 10% – but income is up 14% with expenses up 31%
Standard Chartered; sleeping giant – assets up 2% profit 1% deposits down 2%, but loan up 15%. Income up 6% but expenses up 10% from a year ago
Transnational: assets up 19% profits 16% deposits 23% and loans 19%
Victoria: flat, assets down 2%. Deposits are down 34% as loan up 18% – and income is up 18% but expenses are up 58%
Category Archives: Kenya privatization
Bank for sale
The Government intends to sell a portion of Development Bank of Kenya (DBK) to a strategic investor.
The goverment, through ICDC owns 90% of the Bank which was almost merged with Housing Finance in 2005.
DBK is Kenya’s 34th largest bank with assets of Kshs. 3.9 billion ($55 million)
Kenya Railways (now RVR)
Besides planes, I am to a lesser extent a train buff who took many trips by train from Nairobi to Mombasa as a kid. During school holidays the overnight train ride was one of my greatest treats. It used to take 12 hours going through the dark countryside, waving at people, counting train cars, and memorizing stations. Later we’d have a good dinner and go sleep when it got boring to wake up in the morning, glad to have put the man eating lions of Tsavo behind us. A full breakfast in the dining car would then set the mood for more watching – looking out for for the first coconut tree, smell the ocean (and then Changamwe) before finally getting to the Mombasa station where my uncle would be there waiting to take us to Kwale for the rest of the holidays.
Needles to say Kenya Railways corporation became a run-down shell that is another story in itself. I’ve read enough stories of passengers stuck in the bush when trains break down or derail. Anyway you will probably hear about another trip one day, so when the Institute of Economic Affairs invited Mr. Roy Puffet, the MD of Rift Valley Railways I was briefly there to hear what was said.
Some snippets (I was late to the event)
New start: RVR is a 25-year concession between a consortium of companies and the governments so Kenya and Uganda.
RVR got off to a start in November 2006 and suffered 61 derailments that month. They have since slowed down all their trains as a measure to contain such incidents. They now average 10 – 12 incidents a month – from a combination of equipment, railway and human failures (including sabotage)
Financial & investment: So far the consortium has invested about $18 million The shareholding is 70% foreign (Sheltam, and an Australian company) and 30% local (Transcentury – 20%, ICDCI – 10%) and some financing was sourced from the IFC.
Some attendees later asked why Kenyans were not given a chance to invest in the company (like the Kengen IPO) to which the MD replied that there were not a lot of investors rushing to build railways in Africa (only 2 groups bid for the concession).
Equipment: RVR inherited 174 locomotives from Kenya (55 were working) and 44 from Uganda (25 operational) . also 46% of the 7,000 wagons were usable.
They have focused on getting a working fleet going. This has entailed reducing the fleet to contain only trains in good condition and they also got back 5 locomotives from Magadi soda. Fleet repair is slow as the company faces a lead time of 8 months for locomotive spares.
Their workshops were run down, with no tools or equipment, and many of the sheds had long been taken over by other businesses. The remaining sheds had leaking roofs, and when it rained they had to stop maintenance work for fear of electrocution.
Railway: Demand from China for steel has driven steel prices through the roof. There are few companies making railway parts (and African countries have a different railway size) so it takes about 8 months to deliver (they have to order 4,000 tons at a go) which is expensive. One engineer (from the UK) at the talk said that such a railway would be shut down with all the incidents if it was in Europe – the MD replied probably true but this was the state of things. He added that new rails were being laid on the Mombasa – Nairobi line after which the older ones will be taken out and used for other upcountry lines.
They will also close some stations (there are 50+ stations between Nairobi and Mombasa) and have installed communication’s and tracking systems on all trains and stations
Operations RVR have done quite well since they took over in November 2006 and move about 200,000 tons per month. While this has not changed much in volume from before the concession, they are achieving this with two differences (i) they are using a smaller fleet (ii) and they are collecting more revenue (from increased efficiency & reduced corruption in revenue collection) – about $6m a month. Their volumes dipped in December and April following flooding from the rains. The MD mentioned that they now take between 4 – 7 days to move cargo from Mombasa to Kampala – from 20+ days before, though some members of the Kenya Shippers Association disputed that there.
Other stakeholders
Employees those not retrenched by the company are all being retrained in safety and modern railway processes
Customers While there have been complaints about the slow movement from the Mombasa port (including by the Kenya Ports Authority) , the MD said that 50% of the 14,000 containers at the Mombasa port don’t have proper documentation.
He added that business people were contributors to this i.e. as a result of the past railway inefficiency, companies had taken to using railway train wagons at Mombasa as extra storage facilities. But when the railway movement improved, and cargo was now moved upcountry, the same businessmen took their time to offload goods, creating more congestion.
They have tried to contain prices and their charges ($0.05 per ton per km) compare well with , truck who have taken advantage of rail inefficiency to jack up prices.
Passengers & commuters: they will run commuter train services (in Nairobi) for 5 years, but this is one thing none of the bidders for the concession wanted to continue running – as it is a loss maker.
Kenya Railways: The corporation still exists and will oversee the concession on behalf of the government of Kenya, while also maintaining a register of railway assets. The corporation still has a great burden from the past – illustrated by Kshs 31 billion of debts (about $600 million). Including a 12 billion pension deficit. They hope to use land sales to pay off their employee (and perhaps supplier) obligations while also talking with the governments to waive some debt. They have also received 1 billion shillings form the world bank to resettle some residents in Kibera who live/work too close to the railway line (but this plan/financing is already 1/ ½ years behind schedule)
Summary: The MD mentioned that there was a lot of expectations about the now concessioned railways – some of which were not close to being realistic. He also added that they had fewer customers as a result of the slow uptake by the concession, but added that RVR had no regrets and that the governments of Kenya and Uganda were very supportive.
So, a rough but promising start by the company who now say they have enough locomotives working to achieve their 5-year targets. Will they be a celebrated success like Safaricom? We’ll know in a few years.
10 shilling shares
The recent surge of share splits was unjustified based on the overall trading history of the companies. So it’s only a matter of time before some of these shares dip to their pre-split / hype prices. Any share that was trading for less than 100 shillings in the last 18 months is a candidate for a correction – to the below 10 shillings mark and that includes CMC, ICDCI, and Sasini.
IPO’s
Now that a few IPO’s have passed, but not their euphoria, it is apparent that investment advisors of future IPO’s will have to rework their calculations to satisfy institutional and seasoned retail investors. While government divestment offers will be geared to the mwananchi, smaller private companies will have to ask themselves if by offering IPO shares at about 10/= each, they want to be like Eveready or Scangroup and end up with up with 100,000 shareholders who own 100 – 200 shares each.
Rising shareholder costs
– Kengen told us their 2006 annual general meeting (AGM) – after the IPO would 80 million shillings and another post IPO company Firestone will have their AGM in Nakuru on March 22 (where fewer shareholders can attend).
– With over 175,000 new shareholders, the cost to Eveready of even inviting all their new owners to the AGM is quite prohibitive – mailing out accounts & AGM notices would cost about 4 million shillings ($63,500) [i.e. 175,000 letters X 25 shillings postage per letter]. So Firestone shareholders will also be asked to approve a change in company articles to allow such notices to be sent by e-mail or fax.
– The same postage costs will apply when Eveready mail out their dividend cheques. Since most shareholders have the minimum 100 shares, they will receive payment cheques of Kshs 60. which is hardly justified when you factor in bank & postage charges
– Also to cut costs, the company has sent out slimmed down accounts that are about the size of the president’s speech on Jamhuri day.
– On a positive note, Kengen have made an arrangement with (their bankers) KCB so that shareholders can cash their Kengen dividend cheques at any KCB branch at no cost.
Alternative investments
KTN had a story on Friday about the Central Bank (CBK) crackdown on pyramid schemes – and it was followed by a poll on whether they should be banned. The result was 16% YES, 84% NO (i.e. they should not be banned.) Though unscientific, you sense from the poll that these schemes have become lifelines/shortcuts to riches for a diverse variety of Kenyans.
In fact many of these schemes have been shut down at the urging of commercial banks – who have had to deal with swelling crowds in their banking halls – either depositing or receiving cash in the merry go rounds. Some of these investors blame jealousy from banks (who want to hold their money and give out as loans) and the Nairobi stock exchange for putting pressure on the CBK to act (since they have been selling shares to re-invest in these quick cash back avenues with guaranteed returns.
Politicians stalls bank reform process
According to Jaindi Kisero, the East African editor, the donor-funded restructuring of Kenyan government banks has ground to a halt and the consultants hired to advise the process remain idle.
Government influence and investment was supposed to be reduced/removed at four state-influenced commercial banks, namely, the National Bank of Kenya, the Kenya Commercial Bank, Consolidated Bank of Kenya and the Industrial Development Bank in the exercise which began in 2003.
The sticking point is that directors of these banks were to be drawn from the private sector and not be political appointees as was the case in the past. He also argues that any donor projects that conflict with interests of the Kenyan political class are doomed to fail.