Ever since the NSE started to rally back, the financials seem to be abit hestant to jump onto the bandwagon. What could they be waiting for? Are they a safe bet?

@kizee - Why not KCB?
In 2008, they had the triton debacle... not so (I hope) in 2009.

And they might even recover their loans in Uchumi as it emerges from receivership...

I have a black spot on my portfolio in the name of CFC. Not a bad company fundamentally, but very sluggish since the Stanbic buy-out. I entered at 115, have reduced that to the low 70s so far, but the stock is trading in the low 40s.

I'm looking out for EQTY to touch 18.50 at which point I will take some 15% or so profit and put it into CFC.

I'm also taking other profits from KENRE and KENGEN [order is with the broker] and planting it into CFC.

If all goes to plan, I'm looking at averaging CFC down to below 65. This is assuming it doesn't suddenly start rising....

After that, I sit and wait for the de-merger of the banking and insurance businesses

agree with mufasa

too many write offs triton uchumi kpcu and the list goes on...bad customer service leading to drop in customer base, their admin costs are outrageously high leading one to question theyr effeiciency...subsidiaries are all in the red but south sudan..which cud blow up and day...kcb is way too inefficient a bank and the slowdown in 09 exposed them for waht they are

Triton was provisioned in 2008. KCB might even get something back as Triton's assets (including the building in Westlands) are sold off.

Uchumi is recovering & might be listed. I expect KCB will eventually get its money back. At least the Principal. I am not sure if this loan was provisioned.

KPCU - This does not look good coz it is under receivership... Who knows the loan KCB made to KPCU?

Statutorily, banks have upto march 31 of any year to release their prior year's full financials and publish them in the national dailies. Knowing the Kenyan peculiar habit of waiting till last minute, I expect most will release their results from mid March, with the laggards slyly preferring to publish theirs on odd dates and in papers with limited circulation (say on sunday in a paper like kenya times)to ensure as much of their underperformance as possible is swept under the carpet.

But the financial counter is invariably a good bet. Ponder that Kenyan banks were fairly well-insulated from the ravages of the financial crisis of 2008, so that while old and established Banks in the west were collapsing like dominoes, Kenyan banks were expanding and actually opening new branches at the time.
KCB is expanding, and although its new branches initially are cost centres churning out lots of red ink, overall the bank will be stronger in assets & liabilities once these branches start contributing to its balance sheet (say from 12 months from inception). So long term, kcb maybe good. Let's await the financials so that we get a comprehensive analysis of the sector and see where KCB falls. Or when its peers (Equity,StanChart, Barclays) release their results we can compare.

@VVS - KCB made a KShs 40m loan to KPCU in 1992. This has balloned to KShs 643m by 2010.

more details on
http://standardmedia.co....0000198&cid=159&

dude..634million! that cash can be used to set up a subsidiary! kcb has way too many skeletons in the closet...way too many...

relax guys, this amount must have been written off zamani from the books of the Bank, or at the very least is fully provided for.
Note even when a bank writes off a bad debt from its books it still rigorously pursues its monies (plus interest) until recovery is made. Such recoveries are then treated as income write back.

A bank cannot wait till the bad debt is this colossal to now just write off, the provisioning proper starts much early (nowadays as early as 30 days loan overdue when ur loan is classified 'WATCH'. By the time its a bad debt, its fully 100% provided for. But litigation still continues in courts to recover its monies.

Another thing, what KCB is really pursuing in this case is actually its interest (kawaida+penalty) income - newspaper article says they recovered about KShs 1.5b from KPCU already which is way above the principal amt of 40m borrowed. The amt is huge coz remember this was the time of Goldenberg and bank interest rates were > 50% high high in the stratosphere. U can imagine therefore if u were also being charged penalty interest as well on a principal of hundreds of millions...utaitana.