@scubidu - Hence the use of ratios... Who cares about 'absolute' profits when the real issue as investors is RETURN on what we INVEST...

So we need to compare PE Ratio, P/B, ROI, etc...
Of course, we need to look at management, future, expansion but then we get subjective... but important!

IMHO, Equity & KCB will do well wit regional expansion. For Barclays Kenya... the only way Kenyan shareholders benefit is if BBK 'merges' its Uganda + Tanzania units into Kenya...

...

so usin ur example...i thot eqtys PBT was 5 bn yet KCB's was 6bn...??

KCB:
Growing loan book (28%), income by KES 4b - good
Strong tangible networth - 22.8b - good
higher operational overheads - reasonable, likely due to cost of
new branches
growing bad book by KES 4b- bad bad news, NPA: LOAN BOOK ratio high

They should begin harvesting the benefits of last years' expansion (higher market shares, more & low cost funds, larger loan book)this yr.

IMHO, their pace of expansion in 2010 should have been slower as they review what benefits (OFBS & ONBS)have accrued from last year's expansion. Such critical feedback to then inform & be incorporated into their 2010's expansion.

Am really cuious what proportions of debt and equity they will use for the kes 15n expansion

Intelligentsia: Well, KCB shud see some gains from writebacks in 2010 from Uchumi, Triton (2.2bn provision in 2009) & PanPaper if kibaki/uhuru go thru with stupid revival scheme using taxpayer funds!

Triton/ Uchumi/PanPaper - each of these are mega-million bucks deals gone sour (well, so far).What lessons should KCB draw from such fiascos?
That:
1)the best loan covenants/risk-control mechanisms can still fail ala Triton and disappearing fuel stocks,
2) today's well-capitalised corporate giant could be tomorrow's limping and under-capitalised co.,ala Uchumi, Pan Paper due to management adopting poor strategies,
3) even though KCB's capital strength allows them to take up such mega-deals single-handedly, they should in future consider financing such huge deals with a consortium of other commercial banks. Maybe a syndicated arrangement with them as lead bank.That way the default risk underlying the ledning is also shared around.

Good news for Kenyan corporates in financial difficulties is that bankrupty laws are due to be reviewed so that a company being placed under receivership is not in effect being sent to its death-bed. Like Chapter 11 in the U.S.