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KCB HY 2011 results are here!
Rank: Elder Joined: 6/20/2007 Posts: 2,048 Location: Lagos, Nigeria
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kenyainvestor wrote:young wrote:@kenyainvestor / other experts
Let me ask again, why does NSE reckon with PBT rather than PAT.? It is the only market I invest in that believes so much in PBT.
I think PAT is the key as it dictates the EPS.
Any thoughts or just the kenyan way ? Does KCB and Equity get taxed at the same rate? In 2005, the Kenya Government agreed to reduce the level of taxation to 20% for a period of 5 years for any company that chose to list. This was done to encourage listing at the NSE. Equity listed in 2006. Thus until next year, we cannot compare these two on Profit After Tax Thanks for the explanation, let me set out to read the analysis in your blog. The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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Rank: Member Joined: 7/12/2011 Posts: 194
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young wrote:kenyainvestor wrote:young wrote:@kenyainvestor / other experts
Let me ask again, why does NSE reckon with PBT rather than PAT.? It is the only market I invest in that believes so much in PBT.
I think PAT is the key as it dictates the EPS.
Any thoughts or just the kenyan way ? Does KCB and Equity get taxed at the same rate? In 2005, the Kenya Government agreed to reduce the level of taxation to 20% for a period of 5 years for any company that chose to list. This was done to encourage listing at the NSE. Equity listed in 2006. Thus until next year, we cannot compare these two on Profit After Tax Thanks for the explanation, let me set out to read the analysis in your blog. Thanks @young. Though I would feel better if I am backed up by other Wazuans on my observation 
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Sluggish numbers from KCB, on a straight line, if KCB maintains this performance throughout the year, Full Year 2011 profits will hit Sh8 Billion versus Sh7.1 Billion for 2010 which is like a 12.5% improvement over the last year, I’m also disappointed at the rate at which operating costs keep climbing, cost to income ratio now stands at 66%, it seems the much talked about restructuring is yet to have an impact on costs, contribution of non interest income to total operating income now stands at 37% versus 20% in 1H 2010 while Net interest income was up 20%, going forward I expect lending to slowdown due to inflation but I believe KCB is well positioned regionally to maintain this performance. Read more here http://www.contrarianinv...1-earnings-analysis.html
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Rank: Elder Joined: 6/20/2007 Posts: 2,048 Location: Lagos, Nigeria
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the deal wrote: it seems the much talked about restructuring is yet to have an impact on costs, It is too early to expect a remarkable impact on costs , bank re-structuring is a process and often times the earliest time to feel th impact on the bottom line per se is 12 to 18 months. Be on the watch post 2012 elections / 2013 for the re-structuring impact of KCB. The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Staff lay offs, and in KCB's case, costs lots of money but it's one-off expense for H1. Cost to income ratio has improved from 70% to 66%. See U in Q3.
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Rank: Elder Joined: 6/20/2007 Posts: 2,048 Location: Lagos, Nigeria
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@Kenyainvestor, I have fully digested your H1 KCB results analysis. I fully agree with you in most areas in principles. But looking forward on the flat board I expect Equity to outperform KCB at FY 2011, though the absolute profit margin difference will almost thin out. I predict the table will turn to the advantage of KCB in FY 2012. On the dividend yield which is of much interest to me, for FY 2011 I expect a 1.50 dividend from KCB (20% above 2010) and 1.20 (50% above 2010) dividend from Equity. The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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Rank: Chief Joined: 1/3/2007 Posts: 18,223 Location: Nairobi
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young wrote:FUNKY wrote:@ Young - How can you say that KCB will outperform Equity due to cost saving measures because like KCB even Equity restructured it top management and retired several senior staff voluntarily. KCB has far bigger balance sheet than Equity. There more costs to cut in the oversized KCB and MOO is looking in that direction. Factor in the new funds injected by last years rights issue. While KCB is cutting costs, Equity is expanding its Balance Sheet & Profits! Equity will open branches in Rwanda & Tanzania in 2011. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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KCB: FY2011 eps-3.5, dps-1.75. My 2cts
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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EBL is moving into what KCB is moving out of..that is establishing physical presence in EAC and related expenses. The difference in tongues at Equity & KCB are "we are going to do..." & "we are already doing..." respectively. Business cycles 101.
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Rank: Elder Joined: 6/2/2008 Posts: 1,438
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Although not mindblowing, KCB's H1 performance in my view is somewhat better than expected. This is especially when compared to Q1's outturn. Q2 PAT accelerated by 28.7% vis-a-vis Q1 which is an increase of 509 million.
Of course, KCB has to reckon with last year's increase in the number of shares meaning that KCB's EPS for the year will just about remain the same or increase slightly.
I have also noted that KCB's liquidity ratio in the Kenyan operation has dropped to just above the statutory minimum. This implies there is limited room to grow the loan book unless deposits can be mobilized at a faster rate.
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Rank: Elder Joined: 6/20/2007 Posts: 2,048 Location: Lagos, Nigeria
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Cde Monomotapa wrote:KCB: FY2011 eps-3.5, dps-1.75. My 2cts @Cde you seem to be a strong believer in the lion The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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young wrote:Cde Monomotapa wrote:KCB: FY2011 eps-3.5, dps-1.75. My 2cts @Cde you seem to be a strong believer in the lion Indeed and what i've been looking for is un-folding. The capital is fully invested, time is all I have left
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Rank: Elder Joined: 6/20/2007 Posts: 2,048 Location: Lagos, Nigeria
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Cde Monomotapa wrote:young wrote:Cde Monomotapa wrote:KCB: FY2011 eps-3.5, dps-1.75. My 2cts @Cde you seem to be a strong believer in the lion Indeed and what i've been looking for is un-folding. The capital is fully invested, time is all I have left Hakuna Matata. What you need do is p p p. Patience patience patience or buy some more cira 20 bob to have a good smile in 2013 !!! The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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Rank: Chief Joined: 1/3/2007 Posts: 18,223 Location: Nairobi
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If KCB is the Lion, then Equity is the Masai Moran ;-) The Eagle is flying much higher than the Lion so Equity will take longer to catch up with the Eagle... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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young wrote:Cde Monomotapa wrote:young wrote:Cde Monomotapa wrote:KCB: FY2011 eps-3.5, dps-1.75. My 2cts @Cde you seem to be a strong believer in the lion Indeed and what i've been looking for is un-folding. The capital is fully invested, time is all I have left Hakuna Matata. What you need do is p p p. Patience patience patience or buy some more cira 20 bob to have a good smile in 2013 !!! hehehe
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Rank: Elder Joined: 6/20/2007 Posts: 2,048 Location: Lagos, Nigeria
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That brings me back to good memory, you know I am a young old man. The first KCB I bought in 2004 was 51 bob, it is like 5.1 bob of nowadays as it was before the 10:1 split in 2006. Talk of history, but a sweet one. I know in years ahead KCB will give 5.1 bob dividend. You know very well I am a dividend man, otherwise I sale off and position in a better dividend yielding banking stock just as I left ARM to embrace BAMBURI early this year My own is after I invest how much bob does it return to me relative to the purchase price ??? The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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@young got a lot to learn from U.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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NB: While investing in KCB I did not need it to perform as good as Equity in terms of metrics like Cost to income, RoE, RoC. But now that I am done, I expect it to do so and surely the improvements are beginning to show. Moral of my story? 1.Invest in weakness 2.Grow in strength 3.Divest toward peak - A winning investment formula.
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Rank: Elder Joined: 6/20/2007 Posts: 2,048 Location: Lagos, Nigeria
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Cde Monomotapa wrote:NB: While investing in KCB I did not need it to perform as good as Equity in terms of metrics like Cost to income, RoE, RoC. But now that I am done, I expect it to do so and surely the improvements are beginning to show. Moral of my story? 1.Invest in weakness 2.Grow in strength 3.Divest toward peak - A winning investment formula. That is right. Karibu Sana !
in addition :-Continue to stay with a winning stock without sentiments, divorce (sell off) immediately it underperforms as per your investment objectives / targets. The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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Rank: Elder Joined: 2/10/2007 Posts: 1,587
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young wrote:@Kenyainvestor,
I have fully digested your H1 KCB results analysis. I fully agree with you in most areas in principles.
But looking forward on the flat board I expect Equity to outperform KCB at FY 2011, though the absolute profit margin difference will almost thin out. I predict the table will turn to the advantage of KCB in FY 2012.
On the dividend yield which is of much interest to me, for FY 2011 I expect a 1.50 dividend from KCB (20% above 2010) and 1.20 (50% above 2010) dividend from Equity. Mzee Young, I concur with your observations. I will be surprised if Equity Bank pays 50% higher dividends than last year.
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