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KCB 2018 and Beyond
Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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heri wrote:Ericsson wrote:https://kenyanwallstreet.com/ea-portland-to-sell-idle-land-to-settle-debts/
East African Portland Cement Company seeks to sell part of its idle land to raise working capital pending approval of an extraordinary general meeting to be held on September 27, 2019.
Board chairman in a memo asked the shareholders to consider disposing of two parcels 745 acres and 1329.95 acres in the Mavoko sub-county in Machakos.
The sale he says will enable the troubled firm to clear all loan obligations, raise funds of operational, and plant refurbishment.
However, the EAPCC will need to evict squatters before declaring the land ready for sale. Part of the cash raised in the current sail will service an Sh5.38 billion KCB loan. while KCB and other banks shares may look enticing as investments, are the loan books not scary? Pocket change for KCB
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Rank: Elder Joined: 7/21/2010 Posts: 6,194 Location: nairobi
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Horton wrote:heri wrote:Ericsson wrote:https://kenyanwallstreet.com/ea-portland-to-sell-idle-land-to-settle-debts/
East African Portland Cement Company seeks to sell part of its idle land to raise working capital pending approval of an extraordinary general meeting to be held on September 27, 2019.
Board chairman in a memo asked the shareholders to consider disposing of two parcels 745 acres and 1329.95 acres in the Mavoko sub-county in Machakos.
The sale he says will enable the troubled firm to clear all loan obligations, raise funds of operational, and plant refurbishment.
However, the EAPCC will need to evict squatters before declaring the land ready for sale. Part of the cash raised in the current sail will service an Sh5.38 billion KCB loan. while KCB and other banks shares may look enticing as investments, are the loan books not scary? Pocket change for KCB the same land government wanted to take and build affordable houses,can government buy or take?hope kcb has a good collateral for it's stake here. "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 12/4/2009 Posts: 10,808 Location: NAIROBI
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NBK acquisition will weaken KCB Group’s financials in the short term – Moody’sMoody’s Investors Service says that the acquisition of the National Bank of Kenya (NBK) would be an immediate credit negative for KCB Group but profitability and funding will strengthen over the next 2-3 years, outweighing these short term effects. Short term weakened financialIn the short term, the acquisition weakens KCB because NBK has a high stock of problem loans making NBK less solvent than KCB Group. KCB Group will handle the bad loans through write-offs and increase provisioning to reduce risks. In addition, NBK’s low capitalization will lead to a slight deterioration of KCB Group’s capital adequacy albeit above regulatory requirements and that of global peers. In this case, KCB Group shareholders’ pro forma equity to total asset ratio will decline to 15.0% from 15.9% as of 31 December 2018. Long-term profitability and fundingHowever, KCB Group will experience gradually stronger profitability and funding over the next two to three years. First, KCB will integrate Sh58 billion government deposits on NBK’s balance sheet thus the combined entity will hold around 62% of Kenya’s government deposits. Government deposits are cheaper thus will reduce KCB Group’s overall funding costs. Moreover, the deposits have high net interest margins thus will improve profitability. Furthermore, KCB Group will diversify its revenue base by generating additional transactional revenue by leveraging on NBK’s large government-related business flows. There is an expectation of greater operational efficiency once the merged entity integrates and rationalizes the various operating channels. A gain for Kenyan banking sector
Finally, the banking sector is set to gain from the acquisition by removing a distressed bank through consolidation leading to stability in an overbanked system. KCB Group assets will grow to around KSh830 billion from the Ksh622 billion at year-end 2018. This will consolidate KCB’s leading position in the banking sector with an asset-based combined market share of more than 16%, from 14% as of December 2018. https://kenyanwallstreet...n-the-short-term-moodys/Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 12/4/2009 Posts: 10,808 Location: NAIROBI
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Throwback Thursday https://www.businessdail...988962-xttukx/index.htmlWealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Must have been his worst bet Sept 2013 - Sold Safaricom at 7 bought KCB at 45 2019 Safaricom at 26 KCB at 40 "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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CK must have already sold in 2015 at Kes 60+ 
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Rank: Chief Joined: 1/3/2007 Posts: 18,347 Location: Nairobi
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Ericsson wrote:NBK acquisition will weaken KCB Group’s financials in the short term – Moody’sMoody’s Investors Service says that the acquisition of the National Bank of Kenya (NBK) would be an immediate credit negative for KCB Group but profitability and funding will strengthen over the next 2-3 years, outweighing these short term effects. Short term weakened financialIn the short term, the acquisition weakens KCB because NBK has a high stock of problem loans making NBK less solvent than KCB Group. KCB Group will handle the bad loans through write-offs and increase provisioning to reduce risks. In addition, NBK’s low capitalization will lead to a slight deterioration of KCB Group’s capital adequacy albeit above regulatory requirements and that of global peers. In this case, KCB Group shareholders’ pro forma equity to total asset ratio will decline to 15.0% from 15.9% as of 31 December 2018. Long-term profitability and fundingHowever, KCB Group will experience gradually stronger profitability and funding over the next two to three years. First, KCB will integrate Sh58 billion government deposits on NBK’s balance sheet thus the combined entity will hold around 62% of Kenya’s government deposits. Government deposits are cheaper thus will reduce KCB Group’s overall funding costs. Moreover, the deposits have high net interest margins thus will improve profitability. Furthermore, KCB Group will diversify its revenue base by generating additional transactional revenue by leveraging on NBK’s large government-related business flows. There is an expectation of greater operational efficiency once the merged entity integrates and rationalizes the various operating channels. A gain for Kenyan banking sector
Finally, the banking sector is set to gain from the acquisition by removing a distressed bank through consolidation leading to stability in an overbanked system. KCB Group assets will grow to around KSh830 billion from the Ksh622 billion at year-end 2018. This will consolidate KCB’s leading position in the banking sector with an asset-based combined market share of more than 16%, from 14% as of December 2018. https://kenyanwallstreet...-the-short-term-moodys/ GoK should move most of its deposits to CBK. Why borrow using T-Bills and leave the cash with banks? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 6/23/2009 Posts: 14,220 Location: nairobi
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VituVingiSana wrote:Ericsson wrote:NBK acquisition will weaken KCB Group’s financials in the short term – Moody’sMoody’s Investors Service says that the acquisition of the National Bank of Kenya (NBK) would be an immediate credit negative for KCB Group but profitability and funding will strengthen over the next 2-3 years, outweighing these short term effects. Short term weakened financialIn the short term, the acquisition weakens KCB because NBK has a high stock of problem loans making NBK less solvent than KCB Group. KCB Group will handle the bad loans through write-offs and increase provisioning to reduce risks. In addition, NBK’s low capitalization will lead to a slight deterioration of KCB Group’s capital adequacy albeit above regulatory requirements and that of global peers. In this case, KCB Group shareholders’ pro forma equity to total asset ratio will decline to 15.0% from 15.9% as of 31 December 2018. Long-term profitability and fundingHowever, KCB Group will experience gradually stronger profitability and funding over the next two to three years. First, KCB will integrate Sh58 billion government deposits on NBK’s balance sheet thus the combined entity will hold around 62% of Kenya’s government deposits. Government deposits are cheaper thus will reduce KCB Group’s overall funding costs. Moreover, the deposits have high net interest margins thus will improve profitability. Furthermore, KCB Group will diversify its revenue base by generating additional transactional revenue by leveraging on NBK’s large government-related business flows. There is an expectation of greater operational efficiency once the merged entity integrates and rationalizes the various operating channels. A gain for Kenyan banking sector
Finally, the banking sector is set to gain from the acquisition by removing a distressed bank through consolidation leading to stability in an overbanked system. KCB Group assets will grow to around KSh830 billion from the Ksh622 billion at year-end 2018. This will consolidate KCB’s leading position in the banking sector with an asset-based combined market share of more than 16%, from 14% as of December 2018. https://kenyanwallstreet...-the-short-term-moodys/ GoK should move most of its deposits to CBK. Why borrow using T-Bills and leave the cash with banks? You expect, for example, a road project by KENHA in Loitoktok to be administered via a CBK account and not a commercial bank? Contractors certificate based payment to be done by CBK minus KENHA mandated signatories on the ground? What would such a scenario imply on the liquidity ratio of most Kenyan banks?
KQ ABP 4.26
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Rank: Elder Joined: 12/4/2009 Posts: 10,808 Location: NAIROBI
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obiero wrote:VituVingiSana wrote:Ericsson wrote:NBK acquisition will weaken KCB Group’s financials in the short term – Moody’sMoody’s Investors Service says that the acquisition of the National Bank of Kenya (NBK) would be an immediate credit negative for KCB Group but profitability and funding will strengthen over the next 2-3 years, outweighing these short term effects. Short term weakened financialIn the short term, the acquisition weakens KCB because NBK has a high stock of problem loans making NBK less solvent than KCB Group. KCB Group will handle the bad loans through write-offs and increase provisioning to reduce risks. In addition, NBK’s low capitalization will lead to a slight deterioration of KCB Group’s capital adequacy albeit above regulatory requirements and that of global peers. In this case, KCB Group shareholders’ pro forma equity to total asset ratio will decline to 15.0% from 15.9% as of 31 December 2018. Long-term profitability and fundingHowever, KCB Group will experience gradually stronger profitability and funding over the next two to three years. First, KCB will integrate Sh58 billion government deposits on NBK’s balance sheet thus the combined entity will hold around 62% of Kenya’s government deposits. Government deposits are cheaper thus will reduce KCB Group’s overall funding costs. Moreover, the deposits have high net interest margins thus will improve profitability. Furthermore, KCB Group will diversify its revenue base by generating additional transactional revenue by leveraging on NBK’s large government-related business flows. There is an expectation of greater operational efficiency once the merged entity integrates and rationalizes the various operating channels. A gain for Kenyan banking sector
Finally, the banking sector is set to gain from the acquisition by removing a distressed bank through consolidation leading to stability in an overbanked system. KCB Group assets will grow to around KSh830 billion from the Ksh622 billion at year-end 2018. This will consolidate KCB’s leading position in the banking sector with an asset-based combined market share of more than 16%, from 14% as of December 2018. https://kenyanwallstreet...-the-short-term-moodys/ GoK should move most of its deposits to CBK. Why borrow using T-Bills and leave the cash with banks? You expect, for example, a road project by KENHA in Loitoktok to be administered via a CBK account and not a commercial bank? Contractors certificate based payment to be done by CBK minus KENHA mandated signatories on the ground? What would such a scenario imply on the liquidity ratio of most Kenyan banks? Forgive him coz he doesn't know what he's talking about Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 1/3/2007 Posts: 18,347 Location: Nairobi
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obiero wrote:VituVingiSana wrote:Ericsson wrote:NBK acquisition will weaken KCB Group’s financials in the short term – Moody’sMoody’s Investors Service says that the acquisition of the National Bank of Kenya (NBK) would be an immediate credit negative for KCB Group but profitability and funding will strengthen over the next 2-3 years, outweighing these short term effects. Short term weakened financialIn the short term, the acquisition weakens KCB because NBK has a high stock of problem loans making NBK less solvent than KCB Group. KCB Group will handle the bad loans through write-offs and increase provisioning to reduce risks. In addition, NBK’s low capitalization will lead to a slight deterioration of KCB Group’s capital adequacy albeit above regulatory requirements and that of global peers. In this case, KCB Group shareholders’ pro forma equity to total asset ratio will decline to 15.0% from 15.9% as of 31 December 2018. Long-term profitability and fundingHowever, KCB Group will experience gradually stronger profitability and funding over the next two to three years. First, KCB will integrate Sh58 billion government deposits on NBK’s balance sheet thus the combined entity will hold around 62% of Kenya’s government deposits. Government deposits are cheaper thus will reduce KCB Group’s overall funding costs. Moreover, the deposits have high net interest margins thus will improve profitability. Furthermore, KCB Group will diversify its revenue base by generating additional transactional revenue by leveraging on NBK’s large government-related business flows. There is an expectation of greater operational efficiency once the merged entity integrates and rationalizes the various operating channels. A gain for Kenyan banking sector
Finally, the banking sector is set to gain from the acquisition by removing a distressed bank through consolidation leading to stability in an overbanked system. KCB Group assets will grow to around KSh830 billion from the Ksh622 billion at year-end 2018. This will consolidate KCB’s leading position in the banking sector with an asset-based combined market share of more than 16%, from 14% as of December 2018. https://kenyanwallstreet...-the-short-term-moodys/ GoK should move most of its deposits to CBK. Why borrow using T-Bills and leave the cash with banks? You expect, for example, a road project by KENHA in Loitoktok to be administered via a CBK account and not a commercial bank? Contractors certificate based payment to be done by CBK minus KENHA mandated signatories on the ground? What would such a scenario imply on the liquidity ratio of most Kenyan banks? A commercial bank can do all you say, with KenHa approving the payment, and then submit a "debit note" to CBK for payment/credit in the Clearing House. CBK then credits the bank eg KCB for the amount of the debit note AFTER the bank eg KCB and KENHA have completed their approvals and paid the contractor. The bank/KCB can charge a fee for the service to KENHA. So far CBK gas not bounced cheques. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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