Still Barclays Country

Barclays remains as Kenya’s leading bank by a large margin, with only one month left in the year. The industry remains largely profitable, with only two banks likely to make losses – Bank of Africa (9m) and Oriental (4m) so far. Figures are in million of shillings and are as at the quarter ended September 2005.

total assets
Barclays 106,667 (i.e. 107 billion shillings)
Standard Chartered 71,077
Kenya Commercial 70,913
Cooperative 49,434
National Bank of Kenya 35,942
Citibank Kenya 31,751
Commercial Bank of Africa 29,201
NIC 19,952
CFC 18,617
Investment & Mortgages 17,413

customer deposits
Barclays 84,006
Standard Chartered 58,444
Kenya Commercial 57,619
Cooperative 40,941
National Bank of Kenyan 28,168
Commercial Bank of Africa 25,631
Citibank Kenya 23,576
NIC 16,339
CFC 14,591
Investment & Mortgages 14,307

net loans to customers
Barclays 63,847
Kenya Commercial 32,701
Cooperative 30,028
Standard Chartered 29,859
National Bank of Kenya 23,507
NIC 13,484
CFC 11,755
Commercial Bank of Africa 11,141
Citibank Kenya 10,888
Investment & Mortgages 10,462

profit before tax
Barclays 3,375 (3.375 billion shillings)
Standard Chartered 2,595
Kenya Commercial 1,225
Citibank Kenya 908
National Bank of Kenya 629
Cooperative 607
Commercial Bank of Africa 603
Equity 352
Investment & Mortgages 349
NIC 305

Return on Assets
Dubai 4.76%
Development Bank of Kenya 4.38%
Standard Chartered 3.65%
Equity 3.52%
Barclays 3.16%
Charterhouse 3.10%
Citibank Kenya 2.86%
Credit 2.55%
Transnational 2.53%
Equatorial 2.46%

Return on Equity
Commercial Bank of Africa 31.26%
Barclays 30.80%
Standard Chartered 30.79%
National Bank of Kenya 25.98%
Equity 25.09%
Habib AG 22.55%
Imperial 20.08%
Baroda 19.40%
Citibank Kenya 19.04%
Investment & Mortgages 19.01%

Raking in those charges
(While foreign banks are frequently criticized for exploiting Kenyans through high bank charges, it is local banks who are more dependent on such income – since foreign banks have bigger loan books and thus higher interest income).

Percentage of income from fees, commission and other sources:
Oriental (formerly Delphis) 85.26%
Consolidated 52.98%
Equity 52.16%
Kenya Commercial 49.51%
Cooperative 46.39%
Citibank Kenya 46.28%
Commercial Bank of Africa 46.00%
EABS 45.92%
Barclays 40.90%
Standard Chartered 39.73%

Easy Money
Ratio of bank investment in safe government securities versus riskier loans to customers.

Habib AG 253.58%
Bank of India 185.54%
Baroda 137.16%
Development Bank of Kenya 128.29%
Standard Chartered 80.14%
Citibank Kenya 72.44%
Commercial Bank of Africa 57.91%
ABC 57.25%
Fina 55.88%
Kenya Commercial 46.19%

Where the money is
Cash rich banks.

Citibank Kenya 8,867 (8.867 billion shillings)
Commercial Bank of Africa 6,742
Kenya Commercial 3,702
Imperial 2,148
Cooperative 2,114
Equity 2,056
Barclays 1,897
Diamond Trust 1,699
NIC 1,632
Housing Finance 1,531

Total Non Performing Assets
National Bank of Kenya 17,100
Kenya Commercial 12,641
Barclays 11,627
Cooperative 9,217
Housing Finance 3,388
Standard Chartered 1,672
Commercial Bank of Africa 1,192
EABS 1,142
Oriental (formerly Delphis) 1,004
Consolidated 742

Insider Loans
National Bank of Kenya 16,734
Kenya Commercial 3,340
Barclays 2,942
Commercial Bank of Africa 1,262
Cooperative 1,225
Standard Chartered 866
NIC 534
CFC 461
Transnational 451
Diamond Trust 296

Over/under value?
Standard Chartered and Kenya Commercial Bank, banks 2 and 3, are almost identical in most major categories (assets, deposits, loans, and income) while varying in profit before tax (SC 2.6b to KCB’s 1.2b) and insider loans & non performing (which are historical problems of KCB). Yet KCB’s share price has risen steadily to 104 this year while Standard Chartered has hovered at 130 – 140 during the same period.

Supporting women entrepreneurs

A joint report by the International Labour Organization and the African Development Bank titled Support for Growth-oriented Women Entrepreneurs in Kenya was released today.

46% of SME’s in Kenya are owned by women who face numerous constraints in establishing and running their business. The goal of the program is to transform women enterprises from being informal and micro-sized, located on inappropriate premises, operating in feminized sectors & and locally restricted markets, and which are under-capitalized, making minimal use of technology – all of which limit their potential for growth. This will be done through tailored financial and other solutions.

In terms of banking and finance, women enterprises are restricted to group savings and micro finance (which yield slow growth). Despite women having high demand for loans and credit, and even though they tend to be better savers and have better loan repayment rates than men, women entrepreneurs are unable to access commercial bank loans. The reasons for this include;
main problem facing women in Kenya is lack of collateral for borrowing (often is in husband’ name)
– Banks lack confidence in projects owned by women
– Men have bigger ideas and borrow bigger, while women are risk averse and take smaller loans, which are more costly for banks to administer
– Women lack the ability to approach financial intuitions (e.g. management skill, and in some cases education, technical skills or business records that banks require)

Among the recommendations of the report:
– In a pilot program to be implemented in Kenya, the ADB will guarantee up to 50%, loans advanced to women entrepreneurs by a small group of local banks
– Efforts will be made to link micro- finance loan clients to business development services
– A financial guide for women entrepreneurs will be published
– A women’s bank may be established in Kenya to be chaired by the First lady.

PDF’s of the report can be obtained from either the ADB or ILO sites.

Career guide

Un-scientific career pointer list for this era.

Some hot careers (5+)

  • Human resource/performance management consultant
  • tax adviser/lawyer
  • land developer
  • teacher
  • sales

Some cold careers (4-)

  • wheeler dealers /brief case contractor
  • NGO official
  • real estate agent
  • political party official

Help improve the business climate

You (the public) are invited to comment/recommend which of the 1,300+ licences required of businesses in Kenya should be deleted or simplified. E-mail your views to licenses@tradeandindustry.go.ke by December 2 and a complete list of licenses can be accessed on page 5 of this link.

PDF Roll

Start a Bank in Kenya
The Central Bank of Kenya has published an updated list of new prudential guidelines that cover the licensing of banks and which ensure that depositors funds are safeguarded.

Future banking trends
According to IBM, key trends that will drive global banking in the future will include;
– Customers taking control
– Specialized niche competitors
– A new workforce
– Regulated transparency
– Sharply focused technology

High flyer
Here’s a summary of a 2004 report which ranked Kenya Airways as the 7th most profitable airline in the world. An extensive report on KQ’s recent performance appeared (amid the referendum dust) in the Nation on Tuesday.

Cashing Out
Top shareholder are cashing in their gains at the Nairobi Stock Exchange including one Kapchorua’s top 3 – selling 480,000 shares at 170 shillings (81.6m) and one of Barclays top 10 shareholders – selling 600,000 at 265 shillings (159m).

New court
In an update to the residents lawsuit against the Nairobi City Council, a valuation court has now been set up to hear objections in about 8,500 cases raised by tax payers to the new rates. It was quietly gazetted by the Minister for Local Government in September, comprises 10 members (10 members – 3 lawyers, 4 valuers, 3 professionals) and will begin sitting from December 6th at City Hall, Nairobi.

jobs

Country manager at Africa Now (enterprising solutions) based in Kisumu. Apply by December 2 at info@africanow.org and check for further details at their site.

Paralegals – 13 positions at the Legal Resources Foundation Trust (LRF), to work at prisons in Nairobi, Thika, Kitale, Nakuru, Kisumu and Meru for 6 months beginning in January ‘06. Applicants should have certificate in paralegal/human rights training from a reputable institution, diploma in community development or social work and at least one year’s experience in community or social work, among others. Apply to info@lrfkenya.org by November 25.

A to Z Referendum

a
apathy Voter turnout was less than half of what was expected in most areas. Fatigue over the whole matter coupled with the cost of traveling hundreds of kilometers to vote, in an insignificant election, only a month before the expensive Christmas holidays, transport fare hikes, meant that if you couldn’t vote where you lived, you didn’t travel. Presidential elections are usually held in December, during the school holidays and just after Christmas.

b
boredom Cooped in the house for four straight days and TV was non-stop referendum news. See movies

c
clowns too many to mention but the roll includes; (i) the government spokesman who despite having nothing to say, couldn’t resist the opportunity provided by having the election media centre in his office building (KICC) (ii) at least two MP’s who showed up without ID or voter’s cards but demanded to vote.

d
duty Kenyans from all walks of life turned out to perform their civic duty. Turnout was low, but the result showed a true picture of the Kenyan electorate see gullible

e
emergency plans certain donor bodies (e.g. OXFAM) advised staff to avoid Kenya and even set up emergency chains of command and communication just in case things when wrong. Some international banks moved operations staff into hotels in downtown Nairobi so they could be near their office even if there was chaos around town. DT Dobie withdrew all Mercedes cars from their showroom window.

f
Fox News Kenya Royal Media’s Citizen has replaced the Kenya Broadcasting Corporation (KBC) as the pro-establishment media house of choice. They had round the clock coverage of the election coupled with patriotic songs (both on radio and TV) while their Leader, was the only newspaper to endorse an election position (For a strong Yes!, and even published their opinion poll predicting a slim Yes victory.

The songs played on Citizen are hypnotic and catchy choir melodies, with children singing the choruses, with phrases such as;

kenya kenya kenya
nchi yetu
yenye mafanikio
tupendane, tusaidiane
kenya kenya kenya
Nchi yetu
ukabila tuondoe
tushirikiane sote pamoja

g
gullible Voters in Central and Nyanza who repeatedly produced +97% votes favoring their leaders, and not on the merits of the draft itself.

h
hongera means praise in Kiswahili to all the citizens, and police of Kenya. (i) Citizens for voting peacefully and for putting up with voting hitches and delays. (ii) The Kenya Police force for maintaining peaceful elections around the country, and also for enabling the peaceful staging of two simultaneous political rallies, just hundreds of metres apart in Nairobi on Saturday.

i
incidences catchy word repeatedly used by endless radio hosts when they probably mean to use the words ‘incidents.’

k
Kenyan I now feel like one after voting for the first time ever (shareholder AGM’s don’t count). It’s a shame that I could not vote before when I was abroad

l
line: In Kenya, you should never ever join a line, unless you know where it is going to end. I have learnt this the hard way – at some banking halls, and offices e.g. of KPLC and Kenya Revenue Authority. On voting day, I stood in the first short line I found at the polling station for 30 minutes only to later realize that voters had been assigned to different lines (leading to different voting rooms) based on their names.

m
media the media gave some good coverage. However two incidents troubled me (i) the election was peaceful in most parts of the country, yet near the end of the long day, one TV station devoted over 15 minutes to some stone throwing at one Nairobi location. The media should not glorify sporadic acts which are likely to incite similar incidents. – it’s the reason sports broadcasts don’t show streakers or fans who run onto the pitch (ii) just because the government spokesman is in front of a microphone is no reason to let him talk non-stop – cut him off and do you own (more reliable) reporting. Blooper of the day yesterday was a morning radio host who at 7:30 a.m. asked an on-site reporter if there were any preliminary results!

movies
Watched very good ‘Hotel Rwanda’ and ‘Crash.’ Also watched Spanglish and some other forgettable DVD’s.

n
nite a late entry: as in the Carnivore, who threw a bash called the referendum ‘soul’ night. I Didn’t attend.

o
over as in we hope it’s all over, and can we move on to the economy, service delivery, infrastructure and growth

p
Patriotism see Fox News Kenya

q
queues see lines

r
Resign Like FEMA officials after hurricane Katrina, some people dropped the ball on voting day – and while its not a Kenyan thing to resign, some non- politicians need to resign including; (i) the attorney general and his team for the incoherent draft they produced (ii) all civil servants (identified by KNHRC) who openly defied the code of conduct for public officers and campaigned using their offices (iii) the entire constitution of Kenya review commission (CKRC) – for wasting millions in the name of non-existent civic education, and because their 15 billion shilling gravy train must come to an end after 8 years.

The electoral commission of Kenya gets a pass because overall the election was well carried out but they could have extended both the registration period for voters and hours for voting beyond 5 p.m.

s
smart most voters are smart enough to bring reading materials knowing they may line up for hours, but some (old KC’s) even brought folding stools with them.

t
trash over the last three years we have followed the debate on the draft, sometimes buying two or three newspapers a day just to keep up. Now old newspapers are garbage, which I’m told I can sell for only 20 shillings a kilo. I may have about 15 kilos to clear.

u
uncertainty three types I felt (i) would I be able to vote with a passport? (ii) Should we line up according to names indicated at polling station? (iii) Was my name really on the voter’s roll as it was my first ever vote?

v
violence see media

w
“who’s who’s” included in the voters at polling both around the country were all manner of leaders from the president, MP’s business leaders etc. At my polling station we had Joe Wanjui, Titus Mbathi, Bob Kioko, among others. Still, it’s not a place to network or you may get (violently) thrown out for trying to influence other voters.

x
a simple mark to check one of two boxes on ballot cards. Yet there were so many spoilt ballots because many (literate) villagers did not understand how to vote. See resign

y
yellow church leaders and (most) civil society organizations for failing to take a stand on a very complex document. It was too complicated for me and for many rural people who voted, and yet these ‘experts’ just folded their arms and let the dice roll.

z
zero internet access for most of the weekend. One disadvantage of a mobile phone, and not having a landline, is a dependence on having to use cyber cafés for internet usage – and most of these were closed for several days.