reports
- Faith Mwangi
Kenya Banks: Sector Q3 21 PBT jumps 68% yoy, and outlook for Q4 is pos...
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...
- Faith Mwangi
Kenya banks: Lucrative SME potential undercut by low yields and asset ...
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...
- Faith Mwangi
Safaricom, KCB and NCBA earnings to be boosted by strong H1 21 Fuliza ...
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...
- Faith Mwangi
Kenya banks: Profit before tax up 97% yoy in first two months of Q2
According to the latest data from Central Bank of Kenya, the country's banks recorded a 97% yoy increase in profit before tax (PBT) for the first two months of Q2 21 (April and May). In the first five months of 2021, PBT increased 42% yoy, which is still a strong performance for the banks. We believe the performance was mainly on the back of three factors: 1. Lower provision charges given that Q2 20 saw banks accelerate their cost of risk to counter the asset quality weakness related to Covi...
- Faith Mwangi
Kenya Tier 1 banks benefit from agency banking surge; Equity Group lea...
According to new Central Bank of Kenya (CBK) data, total agency banking transaction value in H1 21 grew by 52% yoy to KES3.3bn. This was on the back of a 10% yoy rise in registered mobile money accounts to 67mn and a 23% yoy increase in overall agency transaction numbers. The growth in overall transaction values tallies with the continued shift to digital transactions that the pandemic has accelerated. The value per transaction increased by 11% yoy to KES3,029, boosted by clients increasingly...
- Faith Mwangi
Kenya banks: Four ways M&A could transform the sector
In the final report of our series on mergers and acquisitions in Kenya banks – we previously traced its history and concluded that the country is overbanked relative to African peers – we examine the banks we believe would be targets for M&A deals going forward.
- Faith Mwangi
The fourth wave of Kenyan M&A: Lessons from Nigeria and Ghana
Recently, we looked at the history of mergers and acquisitions in the Kenyan banking sector and the coming "fourth wave"; in this report, we examine what the processes of consolidation in Nigeria and Ghana can tell investors about what to expect in Kenya. Relative to other major economies in Africa, Kenya is over-banked, which supports our view that consolidation activity is likely and desirable. By our estimates, if Kenya is to match its peers in the list of the biggest 10 African economies,...
- Faith Mwangi
The complete history of M&A in Kenya banks – the fourth wave is here
In this new series of reports, we consider the theme of mergers and acquisitions in the Kenyan banking sector. In the past decade, there has been a notable increase in consolidation and in this first report in the series, we trace the history of mergers and acquisitions in Kenya banks and identify the drivers of future consolidation activity. Kenya has been through three significant phases of mergers and acquisitions, which were mainly prompted by bank failures. We believe we are now in the f...
- Faith Mwangi
NCBA Group: Q2 20 – Surprise increase in margins but earnings still ...
NCBA Group, the new entity formed after the merger between NIC Group and CBA Group in 2019, released Q2 20 results. As the merger happened in Q4 20 the YoY numbers are not comparable, hence we compare performance QoQ. NCBA EPS declined 39% qoq, mainly on poor non-interest revenue performance following the waiver on mobile banking fees, higher operational costs due to integration costs and higher loan loss provisions as a result of the weakening economic environment. NCBA Group is trading at ...
- Gerald Muriuki
NIC Group Plc (NSE: NIC) 3Q18 Earnings Note
NIC Group Plc (NSE: NIC) released 3Q18 financial results reporting a 4.1% y/y decline in Profit after Tax (PAT) to KES 3.2Bn. The decline was primarily attributed to Net Interest Income (NII) which decreased 5.9% y/y, following a 22.2% y/y rise in interest expense which outpaced the 5.5% y/y growth in interest income. Non-interest Revenue (NIR) grew 7.2% y/y to KES 3.4Bn compared to KES 3.2Bn in 3Q17. Total operating expenses remained muted, declining 2.1% y/y, attributed to a 25.4% decrease in ...
- Gerald Muriuki
- Patrick Mumu
Kenya Banking Sector Report 1H18 – Weakened but Resilient
EXECUTIVE SUMMARY In this report, we assess the recent developments in the Banking sector, the direction going forward and provide a valuation update on the trading counters in our coverage. Valuation Update We update our coverage of the banking sector to capture performance under a new reporting environment (IFRS 9), given the release of 1H18 results and provide an update on emerging sector issues since our last coverage. We maintain our HOLD recommendation on the banking sector. We note th...
- Patrick Mumu
NIC Group Plc 1H18 Earnings Update
NIC Group Plc (NSE: NIC) released 1H18 financial results reporting a 2.1% decline in Profit after Tax (PAT) to KES 1.99Bn from KES 2.03Bn in 1H17. The decline was primarily attributed to Net Interest Income (NII) which decreased 4.9% y/y to KES 5.1Bn, following a 30.0% y/y rise in interest expense which outpaced the 8.6% y/y growth in interest income. Non-interest Revenue (NIR) grew 7.0% y/y to KES 2.15Bn compared to KES 2.01Bn in 1H17. Total operating expenses remained muted, declining 1.2% y/y...
Ford Equity International Rating and Forecast Report
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
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