Bits and Pieces

Cheque Truncation
Just read a good piece by bankelele on cheque truncation that is set to significantly revolutionize the banking industry, ensure security of cheques, minimimze fraud and increase liquidity.. check it HERE...

Africap Offloads 15M Equity Shares after 5 Years

5 year period
The expiry of the 5 year lock in period where initial shareholders of the company (This was placed on ther principle shareholders of the company when the bank wenbt public in 2006).The principle shareholders were not to sell their shares until after August 2008 when the period would expire for Equity. The expiry of this period saw the opening of a window of opportunity for Africap to offload its shares though three months latter in December.

Shares
The firm sold the shares for Sh2.5 billion, reaping one of the highest returns from equity investment in Kenya over a five-year period. AfriCap was one of the seven large shareholders, who the Capital Markets Authority (CMA) had barred from selling Equity Bank shares before August, 2008.

Equity Shareholders
-Private Equity firm Helios EB held 24.23% of the bank’s shares by end of March 2008
-British American Investments-10.73%
-Dr. Mwangi-5.3%.
-Mr Nelson Njoroge 6%
-John Mwangi 4.58%
-Africap 4.02%
-Equity Bank’s Employee Share Ownership Plan (ESOPs)held 4.02 per cent.
-The rest of the shareholders in the bank had less than 2.93 per cent shares.

Benefits
Over the years Equity has split it shares, issued dividends and bonuses and continued to post strong profit margins alongside receiving major local as well as global awards in microfinance as well as innovative banking.

Expansion
In Kenya the Company continues to expand its customer base, branch network and ATM machines to serve a wider clientele Recently the company enterred into stock dealerships with the listing of Safaricom IPO alongside its insurance products and real estate development loans available to its clients. The company also acquired 24.9% of Housing Finance successfully enterring into the housing and property development market.
Equity Bank closed 2008 as the only stock at the NSE to post positive returns oscillating between Ksh 155 and 176 by end of December 2008.

Financial supermarket
Equity is endeavoring to become a financial supermarket of sorts with its diverse poducts lines and synergetic engagements but more still needs to be done to harnsaess these opportunities for the betterment of its services.

Parting shot!
Apart from long ATM queues amidst continually broken down ATM machines, hectic banking hall escapades, Overworked staff, and seemingly swelling cleintele base that may not be sufficiently served by the bank, Equity still rocks and its shares are set to go places in 2009!

M-PESA Revolutionize M-banking and threatens Banks

Innovations
When Safaricom-Vodafone launched the M-pesa revolution many did not imagine that this new innovation in the Mobile Telephony industry would emerge to become a force to reckon with in the mobile banking industry.

MPESA
M-PESA is a Safaricom service allowing you to transfer money using a mobile phone. Kenya is the first country in the world to use this service, which is offered in partnership between Safaricom and Vodafone. M-PESA is available to all members of the public, even if you do not have a bank account or a bankcard.

Millions
Today Mpesa is transacting hundreds of millions of shillings across the country enabling many Kenyans send and receive money in the most convenient of ways.

Unbanked
Infact this revolution has enable many unbanked kenyans who may have been averse to opening bank accounts maintain virtual accounts in the name of Mpesa accounts that ar also connected to their mobile numbers.

Profitability
The company has made unparalled substantial profits in recent years and this is set to even rise tio unprecedented levels come the next fiscal years.

Market Share
Though the Kenyan market is abuzz with the entrance of new players Orange and Econet alongside Zain network, Safaricom is still the giant with amazing innovative team and this company is set to go places. Recently it launched a bill payment service in partnership with some corporate players and customers can at the comfort of their living rooms pay their bills. What morwe do one need.

Banks are shaking with every new day of Safaricom innovation.

Stocks
Thought it shares have been doind badly at the bourse,this is partly due to the global financial crisis and partly due to oversupply of its shares at the market a miscalculation that was done by the transaction advisors during the listing process. However, the future of this company is bright and with foreign investors keen on investing in Kenya as an emerging market with alot of funds, This share is still a good long term bet. Trust me!

2007: My Twelve Reflections

As the year draws to a close with the upcoming general elections many especially in the business cycles are taking stock of their ups and downs during the year.

1. The stock market during the early part of the year was abuzz and on a crazy upswing mode and many investors did make a kill.
2. New entrants into the stock market exclusive leage-Renaissance capital is already making inroads into the equity market with plans to invest more in stocks come the next years.
3. New IPOs slated for the year were realized but the mother of all IPOs is still being awaited and investors are bracing themselves for a bruising battle come the release. Despite the dragging court cases the governement is still determined to sell this cashcow and seal the deficit hole in thw budget that is over Kshs100B.
4. The shilling realized significant gains and is now on new highs with strong inflows from:
-Shs 26B purchase of 51% stake in Telkom Kenya.
-Transcentury continues to spur investment area with its new ideas from the spindoctors therein. It is now selling its shares to the strategic investor.
-The prospects of the dollar on the global front is dwindling
-Foreign investors flock to the NSE to get a stake in some of the blue chips and Kenya is the new emerging market where foreign investors are diverting their investments.
5. Equity continues to surprise us despite fears of imminent collapse with new profitability feats and innovative product and now the sale of 24.9% stake to Helios-a strategic partner. What more can we say it is going from strenngth to strength and their stocks might be worth your pennies...
6. The banking sector was abuzz with profitability and more is yer to come.These stocks are good buys dont you think?
7. The emergence of the pyramid schemes that fleeced many investors their hard earned monies and left many crying remember Deci, CLIP, Sasanet and many others?
8.Many investors woke up to the realization of the stock market as an investment destination.
10. Tourism earnings and prospects are good and the earnings from this sector are set to rise exponentially come the next year.
11. The economy grew by over 6% and whether this translated to more money in our pockets is subject to discussion.
12. Business Process outsourcing (BPO) the new craze in town for kenya as an emerging market and this is expected steer our country to the leagues of India and other fast growing economies.

more to come.......

Equity Still Rocks Despite Controversy

Enviable feats:Against a backdrop of controversy sorrounding the shareholding of its Chief Executive, the company has realize such enviable feats in recent times that the players in the banking sector are yearning for.

Being Kenya’s largest retail bank, Equity, has posted an impressive growth that put its ahead of most companies in the banking league.

Growth: The company recorded a 107% growth in pretax profits to Sh1 billion for the half-year period ended June 30.

Operating Income: This increased by 83% to Sh2.6 billion from Sh1.4 billion in a similar period last year.

Customer Base: Its customer base rose by 300,000 in the 6 months since January to 1.3 million customers representing about 35 per cent of all bank accounts held in the 42 licensed banks in the country.

Customer deposits: This went up by Sh7.3 billion to Sh23.6 billion since January.

After Tax profit: The bank’s after tax profits increased by 137 per cent to Sh830 million up from Sh350 million in a similar period last year.

Interest Income: Net interest income for the period was Sh1.2 billion compared to a total non-interest income of Sh1.3 billion.

Overhead expenses: This increased by 70% from Sh903 million to Sh1.5 billion as the bank forged ahead with its branch and staff expansion.
Total assets: This went up by Sh9 billion to Sh29 billion.

Staff numbers: It grew by 600 to 1,919 in the period.

Awards: The bank recently won the global vision award in microfinance jointly with Grameen Bank of Bangladesh, during the annual G8 summit held last month in Germany.

Shares: The bank’s shares continued to maintain its stability and liquidity with sizeable investors still streaming in to buy a piece of the companies stake. This is after the shares fell to an all time low of around Ksh 80 just after the effecting of a bonus issue. However this was only shortlived as the the shares were priced at between Sh133 and Sh128 in yesterday’s trading at the stock market.

Housing Finance stake: The company has already signed a deal to buy 24% of the the stake in Housing Finance, the listed mortgage company, after successful boardroom negotiations with CDC to take up its shareholding in the company once the impending rights isue is effected.

Financial Supermarket: With the company in partnership with Britak in the Housing Finance deal, it appears theat the company might be headed towards the establishment of a financial supermarket with British American Insurance, British American Asset Managers, Dyer and Blair, Housing Finance and Equity Bank in the deal to provide a one stop shop for insurance, Capital markets Investments, Corporate Finance, Asset management, retail lending , mortgages etc

KCB Expansion Plan

35 New Branches:
Kenya Commercial Bank will open 35 New branches in Kenya over the next 12 months according to Susan Mudhune the group chairperson. This is in line with their elaborate expansion plan that will also see the bank open a subsidiary in Kampala after its successful expansion to Southern Sudan and Tanzania. The company also intends to increase its branches in Tanzania and Southern Sudan.
ATMs:
The bank will also install 35 new Automated Teller Machines (ATMs) to cater for the expanding customer base.
Core Banking System:
The bank would also implement the new core banking system-T24 from Temeons- in order to provide technology-driven products and enhance efficiency.
Dividends:
The bank yesterday paid KShs 314.1 million to the goverment as dividend payment for the year ended December 2006. The Government is the bank’s majority shareholder possessing 26.2 per cent.
Turnaround:
The company being the largest indigenous bank has come from a loss making entity to a pre-tax profit of Ksh 3.2 Billion in 2006 and its expansion plans attest to this fact and confirming that Banks's prospects in the future are good.