'We are ... excited that our profits have increased from Ksh4.2bn to Ksh4.5bn' so Adan said. Does that mean BBK would ask for a national holiday if profits increased to Ksh4.8bn?

www.mjengakenya.blogspot.com

@Kularaha - Member have this time been unusually slow...trying to place their results in their proper context perhaps?

@Across...i conquer with you. The results are not that impressive.

Picture this...
1. Increase in Govt securities q/q...Kshs 10 Billion.
How were they able to fund this increase? Partly due to increase in Balances due to CBK,which increased q/q by Kshs 6.9 Billion.
In my opinion,and assuming that the balances due to CBK was a loan,then their balance sheet would not have grown.

2. Increase in PBT year on year ...Kshs 220 million.
Decline in loan loss provision year on year...Kshs 400 million.
In my opinion,the increase in PBT would majorly be attributable to the decline in loan loss provision.

@Mcreg...
I agree with you that the Loan book declined.

I noted that the decline in Loan loss provision is greater than the decline in Loan book . Could the decline in loan loss provision be a pointer to prudence in lending?

Gichini,most banks have been expanding the debt recovery departments probably resulting in less loan loss and this could be a reason the reduce the provision!!!!

The chief value of money lies in the fact that one lives in a world in which it is overestimated.

Just coz BBK's loans go up does not mean the loan loss provisions go up by the same factor. The general provision (1% or so) has to be increased NOT the specific provision. That 'loss' comes about later if the loan quality decreases. ____* BBK has always been more prudent. We saw that in the 1990s... unlike KCB or other banks that are 'newer'.

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB

@kausha - I agree that its the NPLs that will produce the worst losses... Got the results but this weekend is crunch time for me to review KCB & BBK. As for loan/default management... I think BBK is among the better banks. They have much more experience & systems to follow up on folks who are likely to default. The level of provisioning does seem suspect vs last year. On the other hand,BBK took some tough steps in 4Q 2008 thus reducing the need for provision.
____ * I did not say loans for BBK went up BUT a generally an increase in loans does NOT equate to an increase in provisions (excepting general provisions).

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB