From what the MD said the 15 billion is meant to raise KCB's ability to take in more deposits and advance higher amounts to single borrowers. The focus going forward is likely to be big projects and big accounts plus with the staff cuts it's not going to be the bank for small savers.

@selah - KCB still suffers from the 'civil service' mentality. It needs to up the game or Equity & Co-op will eat their lunch!

I’m quite impressed with KCB and Equity's performance and loan book growth compared to Barclays’s top-line growth over the past two years. The fact is Equity and KCB have recognized the human cost and is replacing them with technology…they've seen the high expansion costs and downsizing…but what’s important is top-line growth. I got a friend to send me the q-o-q changes in Barclays net loan book.

Qtr : Net Loan Book (% Growth)
Q4 ’07 : 105,436 mn (12%)
Q1 ’08 : 101,313 mn (-4%)
Q2 ’08 : 106,691 mn (5%)
Q3 ’08 : 106,658 mn (0%)
Q4 ’08 : 108,086 mn (1%)
Q1 ’09 : 101,313 mn (-7%)
Q2 ’09 : 98,390 mn (-3%)
Q3 ’09 : 96,268 mn (-2%)
Q4 ’09 : 93,543 mn (-3%)

The highlights of their performance: negative/zero loan book growth for 6 of the past 9 qtrs…high liquidity risk in 2008…4 straight quarters of negative growth in 2009 with MD saying that repayments were rising faster than new loans (that's what every bank tries to tackle)…high interest rate risk on massive govt securities portfolio if cbk suddenly changes its policy…but they see no problem with this as their loan provision gain by a 60% reduction…bank lending in ’09 was not reserve constrained in as CBK juiced up the market with liquidity

Barclays MD claimed issues with maturity mismatch between bank assets and liabilities…short term window, CBR, being irrelevant; banks not having adequate long term funds to fund longer term projects…but Barclays has been one of the few banks that has been able to source long term funds…they got 3.078 bn from fixed and floating rate medium term notes in late 2007 and early 2008 then an additional 1.251 bn in late 2008 in the form of 10 year loan capital issued by Barclays Bank Plc (subordinated debt) to enhance its capital base. This bank is just full of excuses, for not loaning to the private sector.

I wonder just how much the local management is responsible for and how much of this performance can be attributed to their Absa overlords?

Why are you guys so much on the case of KCB?However, what I still do not understand why the need of the additional 15b when they had a rights issue recently?
Is it a case of blatant inefficiency and the obviously below average customer service hidden by beautiful adverts all over?

@scubidu - Barclays Kenya not related to ABSA (except thru Barclays PLC)... ABSA has no say or shares in BBK...

BTW, if CBK/GoK does reduce interest rates (seems like it is doing so)... the value of Treasuries will bump up BUT I agree... where is the growth in the loan book?

On the other hand... BBK & SCBK could look at larger deals as infrastructure in Kenya expands:
- KPLC & KETRACO (New transmission lines from Ethiopia-Central)
- KPC (pipeline not oil stocks!) KShs 10-15bn
- Toll roads
- KP Refinery (which needs $500mn!)
- Mumias (water plant, ethanol plant, Tana Delta)
- KAA/JKIA expansion

Lower margins vs personal loans but less drama (human resources)...

I might be a sceptic of Barclays' lending policies BUT you cant argue with their CONSISTENT success over the past 20 years!