Kenya banks' sector-wide profit before tax (PBT) grew 68% yoy in Q3 21, according to the latest data from Central Bank of Kenya. On a cumulative 9M 21 basis, PBT increased 63% yoy. Of our covered banks that have released results, KCB Group leads the pack with a 131% yoy jump in 9M 21 PAT, Equity Group comes in second with a 78% yoy increase and Co-op Bank comes in third with a 19% yoy rise. Some key trends in Q3 21 earnings performance include: 1. Improved asset quality with industry NPL rati...
The Central Bank of Kenya (CBK) has released a new study on small and medium-sized enterprises (SMEs), already an important sector for Kenyan banks but one with a great deal of growth potential. Our key takeaways on what the report means for the banks we cover: 1. SME SEGMENT ACCOUNTS FOR 20% OF INDUSTRY LOANS, BUT THERE IS UNTAPPED POTENTIAL The management teams of the Kenyan banks we cover argue that the SME sector is the next growth frontier. In our view, though, the majority of their loan...
We reiterate our Buy recommendation on KCB Group with an unchanged target price of KES54.0 KCB released 9M 21 results posting a 131% yoy jump in PAT, which we see as positive results. As expected, the 53% yoy decline in loan loss provision charge boosted performance. Revenue performance was poorer than expected, with fee and commission income failing to deliver the expected growth to make up for shrinking net interest margins. On the positive side, there was an improvement in asset quality,...
Equity Group released 9M 21 results with EPS increasing 78% yoy to KES7.0. Despite a weak net interest margin, the bank's top-line performance was robust with total income growing 25% yoy, rising on strong non-interest revenue and balance sheet growth. Loan loss provision charge also declined 68%, with the bank recording notable asset quality improvement and higher coverage levels. WE RETAIN OUR HOLD RECOMMENDATION WITH A TP OF KES46.00 Strong non-interest revenue performance driven by non-vo...
Fundamental Research Corp has issued a report entitled “Equity Metals Corporation (TSXV: EQTY / OTCQB: EQMEF) - Bonanza-Grade Silver Intercepts in B.C. – Initiating Coverage” and dated September 21, 2021. The full report is now at
The value of Safaricom’s Fuliza (an M-Pesa overdraft facility) borrowings increased 25% yoy in H1 21, according to media reports. WHAT IS FULIZA? In partnership with Kenya lenders, NCBA and KCB Bank, Safaricom operates an overdraft facility dubbed ‘Fuliza’, a product that enables customers to access an unsecured line of credit by overdrawing on M-PESA to cover short-term cash-flow shortfalls, subject to an applicable pre-determined limit. Fuliza is underwritten by Kenyan lenders, NCBA and KC...
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