Kutwa Tuesday: Banking Brief’s (Jan 15)

CFC on hold?
Could the ongoing political crisis be giving Standard Bank of South Africa second thoughts about its approved merger with CFC? A decision by the Reserve Bank in SA to conclude the deal is also overdue.

Dangers of insular banking
Our banking history is littered with the remains of Daima Bank and other indigenous African and Asian banks. Most went down due to malpractices by directors and managers, but also in-lending to close circle or community companies who as a group could be potentially exposed to a singular risk.

The banks also engaged in subtle discriminatory practices like charging outsiders higher rates, frustrating their loan applications or facilities, or making them feel unwelcome – which ultimately proved to be counter productive as locking them out increased the risks that the banks faced by increasing their exposure and dependence on a core group or sector.

6 thoughts on “Kutwa Tuesday: Banking Brief’s (Jan 15)

  1. MainaT

    Banks, re the 2nd part of your post, was there a between the line message I missed? Are aware of any of the banks that are currently doing this? Especially the listed ones?

    CFC and Stanbic is I still think a done deal.

  2. Anonymous

    Any comment on the stock market? I thought it was a good buy time but now I wonder how long share prices will take to recover…

  3. coldtusker

    Banks: You may be mistaken about part 2.

    I have “heard” that Equity favours GEMA but I think Equity is smarter than that.

    I&M Bank has new shareholders who would not brook this nonsense. I&M is aggressively targeting customers who fit their “upmarket” profile no matter what “community”.

    The largest Kenyan banks are listed so they would not be “beholden” to any community.

    CFC+Stanbic: Small potatoes for Stanbic. BTW, S.Africa has exchange controls. Go figure!

  4. mudskippah

    Unrelated, but I’m catching vybes of an economic boycott by the ODM against businesses in support of the current govt (don’t all businesses support the status quo?). What do you think of that?

  5. bankelele

    MainaT: you hear stories from customers about certain ‘insular’ banks. CFC/Stanbic is overdue

    coldtusker: Even smart banks can make mistakes and should not beholden to any community

    Mambo Gani: siasa mbaya, maisha mbaya

    mudskippah: you broke the story here ahead of the news release! wewe ni nani?

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