wa wa wa, CFC's under performance (no growth in loans)is a shocker! So how does it justify its whole Corporate and Retail Depts during the year?! They were merely a cost- and not profit-centre!! More so the Retail side because that was the principal reason informing Stanbic's decision to acquire CFC Bank...Or is it that post-merger they adopted a very conservative stance of investing more in govt paper (risk-free) than in relatively risky loans? I would really love to see a break-up of their asset-base to see what %ge of assets were in t-bills.
BTW, am curious who is Bankelele? I have cross-checked some of the stats above with the financials of the banks and found it accurate so that gives some comfort that Bankelele r serious.
Lets wait for the EOY 2009 performance which Banks are at this moment starting to compile. I hope it will contain a more rigorous analysis of the sector featuring key indicia that are gaining more and more prominence within the banking industry such as the cost-to-income ratio, Credit:Deposit (CD)Ratio, Non-Performing: Total Lending Portfolio ratios and so on. The latter ratio is particularly important in banks like KCB and NBK because of their legacy loans and if not fully provided for will erode the profits shown.Indeed for some Kenyan banks their bad book is a whooping >30% of their portfolio.Terrible if 3 out of every 10 loans you have are bad. In Japan,CEO's commit hara kiri for lesser failures than this!
Did you know that while having so many branches does raise a bank's strategic and commercial profile thereby netting it more retail and corporate deposits/ loans, it however does not always translate into a higher profit or asset base? Citibank is a moot point: a two-branch bank that appears in Bankelele's list as no. 7 in terms of asset base. Yet DTB,NBK & CBA have more branches each than Citi.
Citi is also the exact opposite of Equity - while Equity focuses on the low-to middle income bloke across your the street and will disburse loans way below <50k kenya money, Citi will repeatedly yawn at you if u r not seeking loans of at least USD 1m (KShs 8om) And remember, both are doing well in their respective niches, while the rest of the Banks operate between these 2 extremes.So it does pay to identify your niche and focus on it.
Oops, forgot to holla New Year to you guys! Hapi 2010!