Hey guys, I've a couple of these shares @60, but the drama has been disappointing so far...

Hear the results were announced today. Any links?

EPS is up from 3.18 to 3.31.

That loan loss provision doesn't look good. But it's worth keeping. I got in at 31.75 in January as defensive stock. It still has a strong-hold in instalment and trade finance.

@Muganda. Not good at all.

The market expected much more than just 4.6% PBT growth based on their own H1 results.

The 138% loan loss provision growth from previous year is a indictment of their allegedly conservative lending policy. Even equity who have the most liberal policy on lending only registered 2% increase

I like the idea of 1:10 bonus shares which they have now done for the third year in a row, basically meaning they believe in the business and intend to plough back the bulk of the profits rather than pay out dividends..

The higher the Loan Loss Provisions.. the better... sort of...

Banks that take LLPs are saying, we screwed up... but we will provide for them (they go against Profits) so the problem is taken care of...

@gathinga - Careful... Equity might NOT be providing enough for their Loans... I do not know how good/poor Equity's policies are for NPLs but I have been in the market for many years...

KCB used to 'show' great results... lakini they were fake! When the crap hit the fan, the losses (due to LLPs & write-offs) were enormous!

It took a Rights Issue to re-capitalize the bank. And a lot of patience & 'massaging' of the books to keep it 'solvent'.

Same for NBK... actually, even worse!

Loan book '000 provision '000 % of lbook
BBK 101,485 1,282 1%
NIC 32,511 463 1%
Equity 63,378 1,035 2%

for better view
It appears everyone was providing to make it 1-2% of loan book.

Are these provisions tax deductible expenses? This may explain the behavior of some banks in the area of provisions

Huh? How does a bonus change their capital structure from a scenario where they did not?

Vvs-that was exact pt, the bonus share issue has been done in lieu of the low dividend. A more intelligent move would have been to do a rights issue.

@vvs, loan provisions are taxable only if they are specific provisions. General provisions, which I suspect these are, are not tax deductable. Also, when soecific provisions are finally recovered, the tax earlier relieved becomes payable.