Wazua
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KCB 2018 and Beyond
Rank: Chief Joined: 1/3/2007 Posts: 18,347 Location: Nairobi
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Ericsson wrote:VituVingiSana wrote:Ericsson wrote:My 2 cents wrote:VituVingiSana wrote:Ericsson wrote:VituVingiSana wrote:watesh wrote:With that tiny payout ratio, I hope they are acquiring a major bank in DRC At 2x what Equity paid. Mwangi > Oigara Mwangi: Significant shareholder, salary is lower for the same performance, organic growth (not government supported), looks for bargains. Oigara: Token, 200-300mn, GoK favoritism, pays more. Your hatred towards KCB waah. Equity also got government support during the NARC and Grand coalition regime which propelled it's growth. How sure are you they will pay 2x what Equity paid. Meanwhile KCB shareholders continue to enjoy the consistent dividend,Equity is very mean when it comes to dividends and even took shareholders on a two year drought without dividend. FY2021 results not yet out,might be a third year. Most banks grew during the Kibaki 1 era. Equity did very well taking business from Barclays and Stanchart that abandoned Kenyans pale mashinani. I heard that Stanchart is closing the Kiambu branch which had been around for decades! Equity has NEVER had a Rights Issue since it listed - it only raised money once when it sold 25% to Helios. KCB has had multiple. KCB has only significantly (as a % of total assets) grown its balance sheet in KE. Very small business elsewhere (vs Equity) where it doesn't have GoK's support. Beware that KCB (like Safaricom) does not become one of your investing 'misses'. At least hedge your anti- KCB position by buying a few. @vvs prefers buying DTB I am a Value Investor. Equity is cheaper than KCB on a (future) growth basis. DTB needs to pull its socks up. If I had the cash I would rather buy Equity (low PER and higher growth), SCBK (high DPR, DY) and DTB (low PER/PB) over KCB. We can compare Total Returns for each in April 2027. Looking at cash returns KCB will give a better return in terms of dividend payout than Equity. DTB over KCB that is madness,KCB will beat DTB pants down 18 nil. Let's compare in 2027. April 2027 it is. Let's go with: [I am using current prices from myStocks 23 Mar 2022] My portfolio (KES 1mn): 33.33% SCBK 141/- cd (2,364 shares) 33.33% Equity 52/- cd (6,410 shares) 33.33% DTB 57/- cd (5,848 shares) [waiting for the announcement] Yours (1mn) all in KCB at 44 cd (22,727 shares) Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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KCB Group has become the eighth lender to get funds amounting to Sh1.8 billion for refinancing home loans under the state-backed plan which seeks to increase house ownership largely amongst workers earning less than Sh150,000 a month. https://www.businessdail...cheap-mortgages-3870196
The Kenya Mortgage Refinancing Company (KMRC) said it has disbursed the funds to the country’s largest home loans financier by market share after several months of due diligence on mortgages to be funded. “The KCB mortgage portfolio was very large [and], therefore, the security registration process took long,” KMRC said in an emailed response to Business Daily. The amount tapped by KCB from KMRC is the largest to a single financier for on-ward lending to homeowners and is 38.46 percent more than Sh1.34 billion advanced to seven lenders — three banks and four saccos — last year. Co-op Bank, which accounted for 5.6 percent of the residential mortgages market last year, tapped what was previously the highest amount from KMRC at Sh550 million, followed by HFC Ltd (Sh515 million). Others were Unaitas Sacco (Sh116 million), Stima Sacco (Sh69 million), Credit Bank (Sh52 million), Tower Sacco (Sh30 million) and Ukulima Sacco (Sh12 million). The KMRC funding covered 574 loans priced at an average interest of 9.5 percent, putting the average mortgage size at Sh2.34 million. KCB was amongst the first lenders to apply for funds from KMRC after it sought Sh2.1 billion early last year. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 6/2/2010 Posts: 1,089
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For KCB, 1.8B is chump change.
Total deposits is 837B - so them taking these monies is I suppose more for providing access to their customers who might want to tap into KMRC funding.
Very little addition to their bottom line - if they were to onward lend it at say 10%, the amount of profit is still lower than the bonus they pay the CEO.
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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My 2 cents wrote:For KCB, 1.8B is chump change.
Total deposits is 837B - so them taking these monies is I suppose more for providing access to their customers who might want to tap into KMRC funding.
Very little addition to their bottom line - if they were to onward lend it at say 10%, the amount of profit is still lower than the bonus they pay the CEO. Interest on KMRC loan to borrowers is capped at 9.5% Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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DRC acquisition and entry has gone quiet. Are they finding challenges or developed cold feet Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 6/23/2009 Posts: 14,217 Location: nairobi
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Ericsson wrote:DRC acquisition and entry has gone quiet.
Are they finding challenges or developed cold feet TMB inside. Additional USD 1.5B in new assets from TMB plus increase of 110 more branches, total branch count across the group to now stand at 462 across EAC
KQ ABP 4.26
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Rank: Veteran Joined: 6/2/2010 Posts: 1,089
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obiero wrote:Ericsson wrote:DRC acquisition and entry has gone quiet.
Are they finding challenges or developed cold feet TMB inside. Additional USD 1.5B in new assets from TMB plus increase of 110 more branches, total branch count across the group to now stand at 462 across EAC I mixed have feelings about this acquisition. Don't know whether it is just a money grab by insiders, whether the investment makes sense and whether it has been made at a competitive price. Share price is also not excited by the move.
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Rank: Veteran Joined: 8/10/2014 Posts: 992 Location: Kenya
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My 2 cents wrote:obiero wrote:Ericsson wrote:DRC acquisition and entry has gone quiet.
Are they finding challenges or developed cold feet TMB inside. Additional USD 1.5B in new assets from TMB plus increase of 110 more branches, total branch count across the group to now stand at 462 across EAC I have feelings about this acquisition. Don't know whether it is just a money grab by insiders, whether the investment makes sense and whether it has been made at a competitive price. Share price is also not excited by the move. In terms of price, they were always going to pay a premium as compared to what Equity paid. Equity had the benefit of the pandemic jitters sweetening the deal. TMB was the best they could get in that market, the only better option is Rawbank. TMB offers a good starting ground in terms of reach all over the country, good tech in place, solid mass market customer base of almost 3 million accounts (Equity BCDC 1.2m) and a 10% market share (3rd in the market). In the short term, it will be very expensive (acquisition + capital injection) but if things remain peaceful in DRC, there is proper money to be made.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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watesh wrote:My 2 cents wrote:obiero wrote:Ericsson wrote:DRC acquisition and entry has gone quiet.
Are they finding challenges or developed cold feet TMB inside. Additional USD 1.5B in new assets from TMB plus increase of 110 more branches, total branch count across the group to now stand at 462 across EAC I have feelings about this acquisition. Don't know whether it is just a money grab by insiders, whether the investment makes sense and whether it has been made at a competitive price. Share price is also not excited by the move. In terms of price, they were always going to pay a premium as compared to what Equity paid. Equity had the benefit of the pandemic jitters sweetening the deal. TMB was the best they could get in that market, the only better option is Rawbank. TMB offers a good starting ground in terms of reach all over the country, good tech in place, solid mass market customer base of almost 3 million accounts (Equity BCDC 1.2m) and a 10% market share (3rd in the market). In the short term, it will be very expensive (acquisition + capital injection) but if things remain peaceful in DRC, there is proper money to be made. Purchase at 1.49 of Book Value seems abit pricey when Kenyan banks are trading at 0.6 book value Life is short. Live passionately.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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watesh wrote:My 2 cents wrote:obiero wrote:Ericsson wrote:DRC acquisition and entry has gone quiet.
Are they finding challenges or developed cold feet TMB inside. Additional USD 1.5B in new assets from TMB plus increase of 110 more branches, total branch count across the group to now stand at 462 across EAC I have feelings about this acquisition. Don't know whether it is just a money grab by insiders, whether the investment makes sense and whether it has been made at a competitive price. Share price is also not excited by the move. In terms of price, they were always going to pay a premium as compared to what Equity paid. Equity had the benefit of the pandemic jitters sweetening the deal. TMB was the best they could get in that market, the only better option is Rawbank. TMB offers a good starting ground in terms of reach all over the country, good tech in place, solid mass market customer base of almost 3 million accounts (Equity BCDC 1.2m) and a 10% market share (3rd in the market). In the short term, it will be very expensive (acquisition + capital injection) but if things remain peaceful in DRC, there is proper money to be made. Purchase at 1.49 of Book Value seems abit pricey when Kenyan banks are trading at 0.6 book value. Life is short. Live passionately.
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Wazua
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