Kutwa Tuesday

West to East: Following Bank of Africa (2004) and Ecobank (taking over EABS), West African’ leading bank, United Bank of Africa (UBA) is making an entry to East Africa starting with Uganda and have also applied for a license to bank in Kenya.

Venture Capital Fund: From the East African Development Bank (EADB) is now operational, with small and medium enterprises (SMEs) in East Africa are eligible for funding.

Uchumi’s turnaround : Uchumi have finally published their financial results of the receivership period from 2006 to 2008. The turnaround has been remarkable and in the half-year ending December 2007, they surpassed full-year sales from 2006 (year of collapse). The current ratio is still poor (less than 1), but that’s about three times better than it was when the company sunk.

The company lost 751 million in June 06, which improved the first year of receivership to a loss of 257m in 07 – and are on track to make a profit in 2008 – while operating fewer stores. It’s probably too soon to be re-listed (there would only be sellers, no buyers) and a dividend would not be likely for 5 years as the company still has an accumulated loss (negative reserves) of about 1 billion shillings ($15 million)

peeves two things irritate me though at Uchumi (i) their cashiers never have any shilling coins and insist on giving out sweets in lieu of change (ii) Cashiers’ who take advantage of my not having a u-card to top up their accounts with points I pay for.

Insurer collapses: Invesco assurance finaly goes under. The company which insured many matatu’s is now under statutory management and can’t make any policy payments or sign up new business. And when the history of the company is written, one paragraph must address why almost every insurance company (including Invesco) decided to put up an expensive office building in the Upper Hill area of Nairobi, far away from their core clientele.

Kenya Re profits: How much did Kenya Re earn in 2007? An interesting discussion at stockskenya.

Diaspora dollars: How much do Kenya’s abroad remit to the country (through official channels)? CBK reports $54 million in January 2008 and the country is on track for an increase from the $573 million sent in 2007.

Dollar launderer: A Nation report cites US concern about money laundering in Kenya which has weak laws regarding the crime. The State Department report notes the difficulty as Kenya is a hub that mixes regional trade with exports to East & Central Africa, donor aid & NGO’s (managing over U.S. $1 billion annually), remittances from expatriate Kenyans estimated at $680-780 million annually, and Eastleigh Estate which handles unofficial remittances by the Somalia Diaspora. Also, though banks maintain records of transactions over U.S. $100,000 and international transfers over U.S. $50,000 (and report them to the CBK) they fear customer reactions to such release of information – and this was hammered home by a November 2007 court award that ordered Barclays Bank to pay a customer 400,000 shillings ($5,700) for providing customer details to the British High Commission.

New boards
– The Kenya college of communication and technology (KCCT) board now has Michael Joseph, Nick Nesbitt, Naushad Merali and Paul Kukubo to guide some relevance in communications training.
– The Resettlement fund (for election victims) has retired archbishop Ndingi, former minister Akaranga, and retired athlete Kipchoge Keino on board.

10 thoughts on “Kutwa Tuesday

  1. jurist

    “was hammered home by a November 2007 court award that ordered Barclays Bank to pay a customer 400,000 shillings ($5,700) for providing customer details to the British High Commission.”

    I just wanted to clarify that the court in that dismissed the case on the ground that she had in fact given consent to the bank to release her information to High Commission once she applied for the visa and gave her bank details. As is the practice, the court assessed what damages would have been due had her claim been successful. BTW I conducted the defence on behalf of the bank.

    The Court of Appeal has discussed the issue of confidentiality in the case of Standard Chartered Bank Ltd vs Intercom Services ltd & Ors. It can be found at kenyalawreports.or.ke

  2. ka-investor

    It’s a good thing Uchumi is back to profitability and publishing their results, but I still think their future is bleak. Competition is getting stiffer by the day.

    BTW, i like the page roll advert on the right corner of your blog, but how do you sign in?

  3. Ken

    Pls do a bankelele analysis of kenya-re and its prospects. You’re a known proffessional and your analysis would be more reliable than anonymous posts on a forum.

  4. Uzimalife

    I was looking at Uchumi’s financials and wondered why they were not charged tax. Profit before taxation was Ksh 63m, then profit after tax was Ksh 63m. Can someone explain this……

  5. The Figure

    I like the new board at KCCT. We should see more of these institutions have such professionals run their boards. That way, Kenya is poised to challenge its position back as a strategic interest in Africa & indeed the world. I only hope we’d have the same with other sectors and moreso our politics !
    Also about Uchumi, there was rumour of some interested parties in the strategic partnership. This seems to have been groused over during the media briefing, any word on that ? I still believe in their brand & think it can rebound back big (like Adidas with the old kicks)
    Keep up the positives Banks !

  6. coldtusker

    I am glad Uchumi is doing better. The value of existing shares remains low until a strategic investor places a realistic bid.

    Existing stakes will be diluted. They should allow trading in the shares & let the chips fall where they will as log as Uchumi makes full disclosure.

  7. Anonymous

    uzimazlife….. they have negative reserves.. ie huge losses still on the boks somewhere to provision for, actually in the billions. technically although they made profit, after this is factored in they still have a loss, and u cant charge tax on that…. the profit is rather cosmetic in the overall picxture but real for the period under review

  8. Eff Dee Eye

    Always good to read something positive happenings with Uchumi the future looks better.

    I have noticed you use the word ‘Kutwa’ on your blog titles often… I hope I don’t sound stupid to ask what is that all about?


  9. bankelele

    Jurist: Thanks, will check it out. No chance that was different case referred to in the State Dept report? Am impressed by my commenters

    Ka-investor: Uchumi were very helpful in the post-election shopping period. But compe is tough with Tusky’s
    – Is that advert up, can’t see it myself – but it’s from adtoll.com

    Ken: I did one when Kenya Re listed. I don’t own shares, but am considering buying some soon

    Uzimalife: I believe they are entitled to recover their losses first. Also their year is only 1/2 way though

    The Figure: Nice board, relevant professionals

    Coldtusker: NSE can’t take any more bad news with Nyagah brokers in the dust this week, – so they will keep Uchumi off the block till it stabilizes. They should also push CMA to free up BOC and Carbacid shares that have been dormant for 3 years.

    Anon: thanks for confirming

    Eff Dee Eye: Oh sorry, “Kutwa” means “find/found” in Kiswahili. Kutwa columns are of ‘interesting’ stories I have found that wish to share here


    Some of Uchumi’s profits perhaps may be explained by the fact that they chose to remain open (when Nakumatt and others remained shut) during the post election violence. Uchumi must have made a killing! Collection House

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