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NAIROBI, Kenya, May 22 – Kenyan’s biggest bank by assets Kenya Commercial Bank (KCB) has restructured loans worth over Sh115.1 billion, to beat Equity Bank, which has reviewed Sh92 billion since the coronavirus pandemic swept into the country and destabilized businesses and lives of ordinary Kenyans.

In a statement, the bank says the debt-relief measures, which were proposed by the Kenyatta-led administration to cushion Kenyans against the impact of the pandemic, have seen customers apply for their loans to be restructured, credit lines expanded and loan tenures extended to keep them financially afloat.

Since mid-March, the Bank has approved the restructuring of Sh91.3 billion worth of corporate loans and an additional Sh20.4 billion in loans to mortgage customers. A further Sh3.4 billion for retail customers has also been approved.

KCB Group CEO and MD Joshua Oigara said customers can still seek deferment of loan payments on their personal, business, corporate and housing loans for disruptions caused directly by the COVID-19 pandemic.

“We made a promise after the pandemic that we would walk the difficult journey ahead hand in hand with our customers. We are therefore offering relief to our customers, upon application so that they are able to weather this storm that was unforeseen the world over. We believe this will not only cushion businesses but create a multiplier effect that will ultimately help to save jobs,” said Oigara.

“We know that the pandemic has affected everyone and we are offering extended financial assistance to provide additional relief to our customers to meet their needs and ambitions. We believe this will go a long way in helping them navigate through their most urgent and challenging situations.”

The relief accommodation is being extended to distressed customers upon request and on a case-by-case basis, based on their circumstances arising directly from the pandemic.

For personal check-off loans and scheme loans, upon request by the individual borrower and the employer (corporate) respectively, the customers can enjoy an extended moratorium benefit for a period by 3 months.

Residential and commercial mortgages customers are getting a moratorium on the principal or both principal and interest for 3-6 months with interest being capitalized monthly as it falls due. However, the Bank could still extend the moratorium for a maximum of 12 months, depending on the severity of the COVID-19 effects on the customer’s business.

On the other hand, micro, small and medium-sized enterprises (MSMEs) can opt for repayment moratorium of 3 months; waived […]

The Kenya Commercial Bank has cracked a whip on 13 of its staff members who were accused of fraud in 2019 as lender tightens grip on staff conduct.

KCB said the number of staff fired in 2019 was slightly high than those fired in 2018 where 10 staff members were sent packing over fraud accusations.

The detection of the staff’s fraudulent acts was made possible by a mandatory check of operations the bank had put in place to minimize losses by identifying unusual behavior in the system. A committee is also put in place to discipline those who have been accused of fraud.

“We built in mandatory checks into our processes/operations as fraud prevention measures,” said the bank. “There is also a management level disciplinary committee, which decides on the consequences for cases depending on their severity.”

KCB said the number of staff being sent home has reduced significantly where it sacked 34 employees accused of fraud and professional negligence in 2017, 31 in 2016, 33 staff in 2015, and about 90 employees in 2014.

Most of the bankers sent home were accused of stealing money, conning customers, or going against the professional conduct stipulated by the Lender.

Fraud attempts have also declined rapidly with KCB saying 639 failed in 2019 as compared to 319 that were reported in 2018.

KCB Group is the biggest bank in Kenya in terms of assets and in the recent rankings by a South African firm, the lender emerged at position 92 in Africa.

KCB came in fourth after Safaricom which was ranked at position ten in Africa, Equity Bank at 82, and EABL at position 90. The four Kenyan firms in the top 100 are also the best in Kenya accounting for more than 80 percent of firms’ valuation at the Nairobi Securities Exchange (NSE). More Articles From This Author

Kenya Commercial Bank Group, the biggest lender in the country has posted a net profit of Ksh. 6.3 Billion for the period ended 31 st March 2020. This represents an 8% rise in profitability from the Ksh. 5.8 Billion posted in a similar period last year.

At the same time, National Bank of Kenya (NBK) saw its profit after tax for the quarter under review rise to Ksh. 155 Million which represents a 134 per cent from a similar period last year. This was attributed to a growth in the loan book and cost management initiatives.

The rise in profitability was largely due to a 20.4 percent rise in interest income to Ksh. 20.2 Billion and a 30.5 percenta rise in transaction-based revenue to Ksh. 7.8 Billion driven by digital banking, improved foreign exchange earnings and additional income from NBK. This saw the total operating income rise by 22% to Ksh. 22.95 Billion.

During the period, customer deposits rose 34 per cent to Ksh.740.4 billion on the back of NBK’s acquisition and onboarding of new customers.

The loan book recorded a 19 per cent growth, expanding to Ksh. 553.9 Billion up from Ksh. 464.3 billion. However, NBK brought on board Ksh. 25 billion in Non-performing Loans (NPLs), which saw the stock of NPLs increased to Sh66.2 billion, up from Sh38.8 billion in 2019. This resulted in loan loss provision increasing to Ksh. 2.8 Billion.

Operating expenses surged 36.7 percent to Sh14 billion on what the lender attributed to the buyout of NBK and salary increments in the first quarter.

A man shops for maize flour at a supermarket in Nyeri, County. Most supermarkets have recorded low numbers of customers, a trend they blame for their failure to pay suppliers. PHOTO | FILE | NATION MEDIA GROUP The Competition Authority of Kenya wants to protect businesses, especially small enterprises, from collapse due to constrained cash flow.

The law stipulates that retailers found to be withholding suppliers’ pay without a good reason will pay a hefty fine.

The Competition Authority of Kenya (CAK) has started investigating delays by some retailers in paying suppliers.

The agency wants to protect businesses, especially small enterprises, from collapse due to constrained cash flow.

In March, CAK asked retailers and suppliers to furnish it with documents showing the payment status for deliveries made by 25 major retailers. The watchdog told the Sunday Nation that its investigations are informed by information received in April that some supermarkets may have missed payment deadlines without valid reasons.

PAYMENT SCHEDULES

CAK will look at the money owed for products and quantities supplied based on specific dates. The retail chains are required to provide an inventory of payment schedules for deliveries received by the end of May 14.

The law stipulates that retailers found to be withholding suppliers’ pay without a good reason will pay a hefty fine. The penalty for abuse of buyer power is a five-year prison sentence or a fine of Sh10 million or both. CAK may also impose an administrative penalty of up to 10 per cent of the undertaking’s turnover for the preceding year.

CAK’s communications and external relations manager Mugambi Mutegi said they had received retailer and supplier statements on payment status and demands that were being scrutinised.

“The authority is in the final stages of analysing the information and will, in the next two weeks, communicate the next course of action to the specific supermarkets that may have contravened the law and further engage the affected suppliers,” he said in an interview.

CAK was still receiving supplier demand statements that will enable it to determine the gravity of the problem, he said.Sources in retail chains blame the Covid-19 pandemic for the delayed payments. This, the retailers said, is due to reduced customer visits.But some suppliers are of the view that failure to conduct feasibility studies before embarking on expansion has led retailers to open loss-making branches that have hurt their profits, forcing them to use suppliers’ money to meet […]

Business
He, however, couldn’t disclose the amounts owed to suppliers at the moment. The competition watchdog has started investigating supermarkets over delayed payments to suppliers without justification. In a notice yesterday, Competition Authority of Kenya (CAK) Director General Wang’ombe Kariuki requested local suppliers owed by supermarkets beyond a 90-day credit period to submit information to the watchdog as part of the investigations. Mr Kariuki claimed that supermarkets could be “abusing buyer power” hence contravening the Competition Act that is meant to protect suppliers. “The Authority has commenced investigations into possible contraventions of the Act in the retail sector through delays in payment of suppliers without justifiable reasons,” said Kariuki. “The authority is requesting local suppliers owed by major supermarkets beyond a credit period of 90 days from the date of supply to submit information to it.” Persons found abusing buyer power face, upon conviction, a jail term of not less than five years or a fine of at least Sh10 million. The investigations might also see supermarkets speed up processing of payments owed to suppliers. Kenya Association of Supplier Chief Executive Officer Ishmael Bett yesterday confirmed to The Standard that his lobby members had raised concerns over delayed payments by the retailers. He, however, couldn’t disclose the amounts owed to suppliers at the moment. He explained that his entity is in the process of collecting the data. “Delayed payments have been a problem and our members have been inquiring about them. We’ve also received the letter by CAK and have started submitting the information that has been requested,” said Mr Bett. He noted that the 90-day rule was put in place as a protective measure for suppliers. However, payment period limits for suppliers differ because of the various goods being supplied such as fresh produce. Bett further noted that the Government decided to put measures to protect retailers following the collapse of such giants as Nakumatt and Uchumi. Nakumatt, that fell with a Sh38 billion debt, owed suppliers Sh18 billion while Uchumi, that recently survived a liquidation vote, owes over Sh5 billion. “The issue of non payment is nowadays well monitored. There are methods to pursue payments,” he said. In 2018, CAK established a Buyer Power Department to address increased concerns over the negative impact on businesses caused by delayed payment of supplies. Due to low margins, supermarkets chose to expand often with money that is supposed to pay […]

Kenya’s Tusker Lager beer has made it into the the top 100 Most Admired African Brands 2020 ranking by Brand Africa. Tusker came in at number 69.

The rankings were announced in a novel global virtual event. American sports and fitness giant, Nike takes the top spot for the third year in a row. MTN and Dangote are the most admired African brands. Nigeria’s GT Bank returns to the top spot in financial services and the United Kingdom’s BBC retains its media category ranking as the most admired media brand in separate category sub-surveys of the most admired financial services and media brands in Africa. African brands only occupy 13 of the 100 entries, 7 less from last year.

The rankings are a consumer-led survey which seeks to establish brand preferences across Africa. The survey is conducted among a representative sample of respondents 18 years and older, in 27 countries which collectively represent 50% of the continent. The 2020 survey was conducted between February and April 2020 and yielded over 15,000 brand mentions and over 2,000 unique brands.

Out of the top 100 brands in 2010/11, only half still appear in this year’s list due to mergers, acquisitions and the obsolescence of many brands. The most prominent changes are in the technology category with the demise Blackberry (#32 in 2010/11), the consolidation of Vodafone (#54 in 2010/11 and now #13 in 2020) which acquired Vodacom in 2008 and rebranded in 2011, Etisalat (#40 in 2010/11) rebranding to 9 Mobile in 2017 and Motorola (#39) being acquired by Lenovo in 2014. Chinese brand, Tecno, has raced up the ranking from #33 to #5 in the rankings – a dominant performance for one of China’s premier global brands that’s not even sold in China.

Tusker Lager is a beer brand owned by East African Breweries (EABL). It is the largest African beer brand in the Diageo group, which owns majority shares in EABL.

It is sold in variants that include: Tusker Lager: sold in keg, widget cans and bottles: 4.2% ABV pale lager

Tusker Malt: 5.0% ABV premium lager

Tusker Lite: 4.0% ABV lite lager

Tusker Cider: 4.5% ABV Apple cider

Download the full report HERE .

Nairobi — Kenya’s listed telco Safaricom topped the region as the largest company by market capitalisation and net earnings yet again this year, even as the Covid-19 pandemic hit listed firms, wiping out shareholder earnings and pushing away foreign investors.

A survey on Africa’s top 250 companies by South Africa’s African Business Magazine had 17 East African companies valued at $20.2 billion (3.4 per cent of total market capitalisation of the companies surveyed). Last year, the list had 21 companies from the region, valued at $26.3 billion; four per cent of total market capitalisation.

According to the report released this week, Safaricom was ranked the most valuable company in the region, with a market capitalisation of $9.96 billion and a net income of $598 million. With $10 billion worth of market value, Safaricom was 10th position on the continent, up from 14th in last year’s ranking.

Next in the Africa ranking were Tanzania Breweries Ltd at position 75, Equity Group Holdings (82), and the East African Breweries Ltd (90), valued at $1.39 billion, $1.16 billion and $1.08 billion respectively. KCB takes the fifth position in the region with a market capitalisation of $999 million, and position 92 in the overall ranking.

Other listed firms ranked in the top 10 in the region include Vodacom Tanzania, valued at $827 million, Tanzania Cigarette Company ($738 million), Co-operative Bank of Kenya ($690 million), Standard Chartered Kenya ($592 million) and NMB Bank ($508 million).

Kenya had 11 companies in the top 250 companies on the continent, three less than last year, and with their combined market capitalisation dropping to $16 billion from $21 billion.

Tanzania lost one entry from last year and was down to four companies, with Uganda remaining the same at two entries.

According to an analysis by Tom Minney, the chief executive of Mauritius-based consultancy firm African Growth Partners Ltd, capital outflows from Africa’s frontier and emerging markets as a result of the Covid-19 pandemic have crushed market valuations for many of the listed top 250 companies.

"It is estimated that investors have pulled out over $90 billion from emerging markets since the beginning of the pandemic, the largest capital outflow on record," Mr Minney said.

Vodacom Tanzania rose to position 98 from 135 last year, and Tanzania Cigarette Company climbed to position 105 from 146.

South Africa dominates the market capitalisation of this year’s rankings as leading firms have expanded globally to grown their markets.

Equity Bank Group Managing Director and CEO James Mwangi at a past investors function . [File, Standard] Business
Surge in bad loans forces Equity, StanChart and NCBA to hold onto shareholders’ cash

Three top-tier banks have recalled their dividend to shareholders as the Covid-19 pandemic continues to roil the financial markets. Standard Chartered Bank is the third lender to withdraw dividend payment after Equity Bank and NCBA. Standard Chartered had set aside a dividend payout of Sh5.1 billion which was to be given to shareholders on April 27. But with the lender calling off its annual general meeting (AGM) after the government prohibited all kinds of public gathering in compliance with social distance rules, the lender said the payout would not be put before shareholders for approval. Equity yesterday also recalled Sh9 billion it had set aside as dividend for its shareholders, citing uncertainty over Covid-19 pandemic. Cash crunch Last week, NCBA Bank became the first lender to withdraw final dividend payment as banks prepare for a cash crunch with borrowers expected to struggle or fail to service their debts. Equity was to pay a final dividend of Sh2.50 for every ordinary share for the year ending December 31, 2019. However, following the adverse economic effects of the novel coronavirus, the second largest bank decided to withdraw from the plan. It said its board reached the decision after its assessment of risk, even as it took into consideration the need for prudent risk mitigation and management. “The Equity Group Holdings Board took a conservative approach that recognises the emerging unquantified risk of the pandemic and opted to preserve capital in the face of the prevailing uncertainty,” said Group Chief Executive James Mwangi. “A strong capital and liquidity position gives us the strength and capacity to cushion our business and accommodate and walk with our customers during these challenging times.” Monitoring impact Standard Chartered says it is monitoring the impact of the pandemic. “Consequently, the company will not be in a position to pay the dividend on May 28 as proposed and announced through the Nairobi Securities Exchange as it would not have been approved by shareholders at an AGM as required,” said company secretary Nancy Oginde. Most banks will be keen to hold on to as much liquidity as they can as they are expected to set aside billions as insurance for possible defaults. Equity Bank is yet to release […]

Business
The latest Brand Africa ranking also shows Kenya’s Equity Bank, KCB, Tusker and M-Pesa featuring in top spots Olympic Champion Eliud Kipchoge’s official sports partner Nike is the most admired brand in Africa. Other global brands Adidas, Samsung, Coca Cola, Techno, Apple, MTN, Puma, Gucci and Airtel dominated in that order in a list that saw only one African-owned brand, MTN, in the top 10. The latest Brand Africa ranking for 2020 also shows Kenya’s Equity Bank, KCB, Tusker and M-Pesa featuring in top spots. Equity Bank, this year’s Brand Africa Survey debutants, clinched position 11 in the most admired finance brands category in Africa, as the region’s businesses struggled fro prominence. KCB Bank dropped from position eight last year to 12 in the category of most admired finance brand. “The challenge is for African brands to grow their strategies to win new customers by showing care and high-quality innovation in brand experience especially by targeting the youth,” said Brand Africa Trustee Chris Diaz. In alcoholic beverages category, East African Breweries Limited’s most popular beer, Tusker Lager, secured position three behind Ireland’s Guinness and Nigeria’s Star beer. Tusker was the only Kenyan brand in the overall 100 most admired brands at position 73. The downward trajectory also saw Kenya’s money transfer platform M-Pesa take position 17 this year from 13 in 2019 in the same category. The most admired finance brand top position was secured by Nigeria’s GT Bank, which was making a comeback after it lost a top-five finish last year, with many respondents preferring Africa-owned banks over the international ones. Interestingly, most African brands did not make the top spot in their domestic market with many preferring international brands.

KQ flight at Moi Airport Mombasa High operation costs saw Kenya Airways (KQ) sink deeper into losses for the financial year ended December 31, 2019.

According to the company’s consolidated financial statement released today ahead of an investor briefing scheduled for tomorrow (May 27), the airline comprehensive loss widened to 8.85 billion from Sh5.94 billion in 2018, triggering a 49 per cent KQ, as it is known internationally reported a gross loss of 12.98 billion, a 71 per cent further drop compared to Sh7.55 billion loss the previous year.

The firm attributed the loss to an increase in operating costs that grew by 12.4 per cent to Sh129.1 billion compared to Sh114.8 billion.

Even so, the airline’s income grew to 128.3 billion from Sh114.1 billion in 2018.

The poor results saw shareholders incur Sh2.23 loss per share, almost doubling an Sh1.30 loss reported in the previous financial year.

The national carrier which is on the verge of being nationalised issued a profit warning in mid-December last year, saying its end-year loss will worsen by at least 25 per cent.

In a statement to investor KQ chairman Michael Joseph said although the airline has realised improved revenue, profitability was constrained by the increased competition in the airline area of operation, which has increased pressure on pricing in order to remain competitive.

This is the third year in a row the airline is posting losses despite conducting Sh200 billion debt restructuring in 2016 to keep it afloat.

The plan conducted in 2017 was meant to push the airline bank to its wheels after reporting the highest loss in Kenya’s corporate scene. It had reported a loss of Sh26 billion in the year ended March 31, 2016.

Investors will be keen to hear how the new chief executive Allan Kilavuka is planning to redeem the firm from losses to grow their dwindling returns.