• Kenya - 9 YEAR Treasury Bond
  • Issue No: IFB1/2020/9
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EABL CEO Andrew Cowan The East African Breweries Limited (EABL) has recorded a 9 per cent decline in net sales for the financial year ended 30 June 2020, as the first half growth of 10 per cent was offset by a 29 per cent decline in the second half. The company attributed the second half decline to the impact of the Covid-19 pandemic which saw containment measures implemented across East Africa from late March 2020. The pandemic impacted EABL’s business performance after three consecutive double-digit halves of growth, with profit for the year declining by 39 per cent to Sh7 billion from Sh11.5 billion in the previous year. “During this unwelcome pandemic, our top priority has been to safeguard the health and well-being of our people and support our communities, while taking necessary action to protect our business. Across the markets we have tracked changes in consumer behaviour and repurposed our execution plans in trade to continue serving our consumers where safe and possible to do so,” said EABL Group MD and CEO, Andrew Cowan. Cowan said EABL focussed on managing working capital tightly in the last quarter, reducing discretionary expenditure and reallocating resources such as advertising and promotion (A&P) spend to new and emerging channels to serve consumers safely. Given the pandemic’s impact on bar owners across East Africa, EABL is committing Shs 500 million to support the recovery of on-trade outlets in Nairobi, Kampala, and Dar es Salam as part of Diageo’s $100 million ‘Raising the Bar’ global fund. The funding will be used to support the implementation of hygiene measures, provision of practical equipment, and provision of free digital support and training to enable outlets to transform how consumers will be served when bars reopen. “Going forward, our market teams have put in place robust plans to help us emerge stronger from this crisis once the measures are eased across our markets. We will continue to execute with discipline and invest prudently to ensure we are strongly positioned for a recovery in consumer demand,” Mr. Cowan said. In recognition of the uncertainty in the external environment in the face of the Covid-19 pandemic and the need to conserve cash to support the business, the Board of Directors does not recommend a final dividend. Consequently, the interim dividend of Sh3 per share paid in April 2020 will be the full and final dividend for the year. Covid […]

Unit Trust Funds (UTF) assets recorded an annualized growth of 1.1 percent in Q1’2020, compared listed bank deposits which grew by 14.3 percent in Q1’2020.

Mutual Funds/UTFs to GDP ratio stood at 5.4 percent, which is still very low compared to global average of 61.8 percent.

UTFs are collective investment schemes that pool money together from many investors and are managed by professional Fund Managers, who invest the pooled funds in a portfolio of securities to achieve objectives of the trust.

In Kenya, Money Market Funds is the most popular Unit Trust Funds investment with a market share of 88.2 percent as of Q1’2020, an increase from 87.0 percent in 2019.

The overall Assets under Management (AUM) of the industry grew at a rate of 0.32 percent to Ksh76.3 billion in Q1’2020, from Ksh76.1 billion as at FY’2019.

In the last two-years, Assets under Management of the Unit Trust Funds have grown at a compounded annual growth rate of 17.0 percent to Ksh76.1 billion in 2019 from Ksh55.6 billion recorded in 2017.

According to the Capital Markets Authority, there are 24 approved collective investment schemes made up of 92 funds in Kenya as of Q1’2020. Out of the 24 however, only 19 are currently active while 5 are inactive.

CIC Asset Managers remains the largest overall Unit Trust Fund Manager with an AUM of Ksh29.8 billion in Q1’2020, from an AUM of Ksh29.7 billionn as at 2019 translating to a 0.9 percent annualized AUM growth.

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CIC Asset Managers remains the largest overall Unit Trust with a market share of 39.0 percent, an decline from 44.1 percent in 2019.

In terms of growth, Co-op Trust Investments recorded the strongest annualized growth of 424.5 percent, with its market share declining to 0.01 percent from 0.9 percent in 2019. Stanlib Kenya recorded the largest decline of 103.8 percent, with its market share declining to 1.9 percent from 2.5 percent in 2019.Cytonn Money Market Fund had the highest effective annual yield at 11.0 percent against the industrial average of 8.7 percent.This comes at a time most money markets funds have been pushing to have CMA expand eligibility of Trustees of Unit Trust Funds to include non-bank Trustees such as Corporate Trustees, since most banks have UTFs, hence refuse to be trustees of UTFs, which is a legal requirement.However, CMA has been adamant a move […]

– Equity Bank was ranked at position 754 out of 1,000 global banks jumping 90 places from 844th place in 2019

– The classification was done based on a range of metrics which included the size of the lender, financial soundness, profits on capital and return on assets

– The ranking came just a few days after the lender scooped three top awards at the 2020 Euromoney awards for excellence

Equity Bank has been ranked among the world’s best lenders in 2020 by the Financial Times Banker Magazine.

The financial institution was ranked at position 754 out of 1,000 banks globally, jumping 90 places from 844th place in 2019.

Equity Bank MD and group CEO James Mwangi speaking at a past event. Photo: Equity Bank.
Source: Facebook

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The group’s managing director and Group CEO James Mwangi said he was humbled by the feat. “We are humbled that despite being a regional bank operating in Africa, we have made it among the top 754 banks in the world,” he said. Equity Bank headquarters, Equity Centre, Upper Hill Nairobi. Photo: Equity Bank.
Source: Facebook

The classification was done based on a range of metrics which included the size of the lender, financial soundness, profits on capital and return on assets.

In terms of capital assets ratio and financial soundness, Equity was ranked at number 62, an improvement of 13 spots from 2019.The lender took an impressive position 20 overall on return on assets and was 55th on profit on capital.James Mwangi transformed Equity from a society in 1993 to one of the largest banks in East Africa. Photo: Equity Bank. Source: Facebook READ ALSO: Man United vs LASK: Lingard, Martial score as Man United reach Europa League quarters On continental level, the bank was placed at position 22 in Africa.The ranking came just a few days after Equity scooped three top awards at the 2020 Euromoney awards for excellence.It was awarded the best bank in Africa, excellence in leadership in Africa and for the second time in a row, Africa’s best digital bank.The lender recorded a 14% drop in profits to KSh 5.3 billion for the first quarter of 2020 compared to KSh 6.2 billion it registered in a similar period in 2019.The reduction in the lender’s net […]

Equity Bank managed to scoop three awards at this year’s Euromoney Awards for Excellence. They were awarded Best Bank in Africa, Excellence in Leadership in Africa and for the second time in a row, Africa’s Best Digital Bank.

Equity won the Africa Best Bank award category having demonstrated its strong financial performance, differentiated business model, ability to adapt to changing market and regulatory conditions, innovativeness, and a track record of delivering on its targets to shareholders and commitment to its clients. The bank has been deliberate with its innovative strategy towards democratizing access to financial services through non-branch banking and adoption of digital channels, 97% of Equity’s transactions are now taking place outside the branch with 79% taking place on mobile and internet banking platforms. Short term personal and microloans are now processed digitally, resulting in 93% of the Bank’s loan transactions taking place via mobile channels that include Equity’s Equitel USSD platform, EazzyBanking App, and EVA (Equity’s Virtual Assistant).

They also the Bank won Africa’s best digital bank award for the second time in a row validating its leadership role in digital offering, both in corporate and retail banking, leveraging technology to benefit both clients and the efficiency of the institution, placing digital at the heart of its business.

This year, Euromoney introduced The Excellence in Leadership award category that recognized the efforts made by banks in responding to the COVID-19 pandemic for its employees, clients, own business, societies and economies. Equity was recognized for its proactive involvement in initiatives that have benefited the community in which it operates, more so during the current COVID-19 pandemic. This was seen when Equity Group Foundation (EGF) with support from the Mastercard Foundation and the family of Dr James Mwangi, Equity committed Ksh 1.1 billion (USD $11 million) to provide Personal Protective Equipment (PPE) to frontline medical staff dealing with COVID-19 patients in public hospitals in Kenya and another USD 2M (one million each for Rwanda and DRC) to support Rwanda procure 22,250 testing kits and DRC to procure PPEs.

The Euromoney Awards for Excellence were established in 1992 and were the first of their kind in the global banking industry. This year, Euromoney received almost 1,000 submissions from banks in their regional and country awards programme that covers more than 50 regional awards and best bank awards in close to 100 countries.

Equity Group Managing Director and CEO, Dr. James Mwangi, had this to say, […]

World Bank Group member IFC has provided a $50 million loan to Equity Bank Kenya to help small and medium-sized enterprise (SME) clients facing COVID-19 challenges.

The loan, which will ultimately support hundreds of Kenyan businesses in the manufacturing, health, trade, transport, and consumer goods sectors, is part of IFC’s global USD 8 billion fast-track COVID-19 facility, announced in March 2020 and designed to help businesses maintain operations and jobs during—and after—the COVID-19 crisis.

The COVID-19 pandemic has disrupted trade and value chains in Kenya, across Africa, and around the world, affecting commodity prices, reducing foreign financing flows, and collapsing tourism revenues. Smaller businesses are essential to Kenya’s economy, accounting for about 81% of employment, according to the official press release.

Kenya Airways (KQ) paid more than Sh400 million to five expatriates in 13 months, documents show.

Documents seen by The Star indicate that the five foreign consultants hired to help revive the loss-making airline in 2017 earned between Sh3.6 million and Sh5.4 million a month.

Cumulatively, the five Polish nationals pocketed over Sh400.2 million in salaries in only 13 months.

The five consultants included Michal Smierciak, Grzegorz Malysz, Magdalena Serwach, and Piotr Piwowarczyk.

They were part of a team recruited by former CEO Sebastian Mikosz, also a Polish national, to turnaround the national carrier’s fortunes.

But despite drawing huge salaries and allowances, their strategy flopped as the airline company continued to post huge losses running into billions of shillings. Kenya Airways recorded a loss of Sh12.98 billion for the year 2019 and Sh7.56 billion in 2018.

Mikosz joined the cash-strapped national carrier on June 1st, 2017, and was tasked with turning around the airline’s fortunes.

His three-year contract was set to end in June 2020 but he left the company on December 31st, 2019, and was replaced by Allan Kilavuka, who previously served as Jambojet CEO.

Mikosz pocketed over Sh10 million in exit package from the airline. A KQ annual report said the amount was compensation to him for leaving the airline before the expiry of his contract.

“We are grateful to Sebastian for steering the airline through the headwinds and ensuring the airline continued to pursue its strategy. We wish him well in his future endeavors,” KQ chairman Michael Joseph said in the report.

In 2018, Mikosz earned a total of Sh62.89 million including Sh42 million salary, Sh16.43 million allowances, and non-cash benefits amounting to Sh4.44 million.Mikosz was paid Sh40.06 million in basic salary in 2019, Sh29.02 million allowances, and non-cash benefits totaling Sh10.98 million.In light of the Covid-19 pandemic, Kenya Airways plans to lay off hundreds of workers among them pilots and flight attendants in a bid to cut costs.

Kenya Airways announced (07-Aug-2020) it will not resume services from Nairobi to Bamako , Blantyre , Brazzaville, Djibouti , Khartoum , Luanda, Maputo and Mogadishu. The airline will continue to offer connections via Nairobi in cooperation with its partners. Kenya Airways stated: "Our short and medium-term projections indicate that we must inevitably reduce our operations before we begin to scale up again. With the suppressed demand for air transport, a large part of our fleet will remain grounded. We will also operate a reduced network as we gradually resume our services, as we anticipate that it will take some time before the industry starts to rebound". [ more – original PR ] Want More News Like This?

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Kenya Airways Boeing 787-8 Following the lifting of a ban on all scheduled passenger services, all major airlines in Kenya resumed limited domestic flights on July 15, 2020.

Flag carrier Kenya Airways (KQ, Nairobi Jomo Kenyatta ) restarted services from Nairobi Jomo Kenyatta to Mombasa (2x daily) and Kisumu (daily), while its regional low-cost subsidiary Jambojet (JM, Nairobi Jomo Kenyatta ) has also restarted services to Malindi , Ukunda , and Eldoret , on top of Mombasa and Kisumu.

Smaller regional specialists, Safarilink Aviation (F2, Nairobi Wilson ) and Fly540 (5H, Nairobi Jomo Kenyatta ), have also already restarted operations.

Skyward Express (OW, Nairobi Wilson ) and Freedom Airline Express (4F, Nairobi Wilson ) plan to restart scheduled operations on July 19, EastAfrican (B5, Nairobi Jomo Kenyatta ) – on July 24, and Airkenya (P2, Nairobi Wilson ) – on August 1, according to the carriers’ respective internet booking engines.

International scheduled flights to and from Kenya are scheduled to resume on August 1, 2020.

The Government of South Sudan reopened Juba airport and its airspace to scheduled international flights in early July, the BBC has reported.

"Our air space is now open. We have no restrictions on the airlines. But whoever is coming into the country from outside, whether he or she is a foreigner or a South Sudanese national, must provide a health certificate and must self-quarantine for 14 days," director-general of the airport Kur Kuol said on July 9, 2020.

Flightradar24 ADS-B data shows that Ethiopian Airlines (ET, Addis Ababa ) has been flying to Juba since July 5, while EgyptAir (MS, Cairo Int’l ) resumed operations to South Sudan already on July 3. flydubai (FZ, Dubai Int’l ) and Badr Airlines (J4, Khartoum ) have also restarted operations to Juba, while Kenya Airways (KQ, Nairobi Jomo Kenyatta ), RwandAir (WB, Kigali ), and Uganda Airlines (UR, Entebbe/Kampala ) have yet to do so.

Besides obligatory quarantine and testing, South Sudan requires all passengers to wear face masks and gloves throughout…

The government of Kenya has refused to commit itself to Kenya Airways ’ request for a KES7 billion shilling (USD65 million) emergency bailout as its already diminished finances sustain further damage during the coronavirus pandemic.

Ukur Yattani Kanacho, secretary of the National Treasury, said that the state needed a long-term solution to the carrier’s problems that was anchored in its planned nationalisation, the country’s Daily Nation newspaper reported on May 26.As previously reported, the […]

Kenya Airways Boeing 787 dreamliner at KQ headquarters in Nairobi on April 26, 2017. The Kenya Airways board has approved the downsizing of staff, networks, and assets citing the adverse effects of Covid-19 on its operations.

The airline formally notified the pilots association of its intention to shed off a large number of its workforce in a Friday notice. The management says the fall in revenue has undermined the airline’s ability to continue optimal operations.

KQ intends to carry out an organisation-wide restructuring, which it says would culminate in a reduction in its network, assets and staff.

Acting CEO Allan Kilavuka told the Kenya Airline Pilots Association (Kalpa) the redundancy process will commence immediately.

He assured the association the company shall adhere to the provisions of the labour laws, the comprehensive bargaining agreement (CBA), and any related court orders.

“The employees affected by this move will be accorded the respect and dignity that is required,” the letter to Kalpa CEO Captain Murithi Nyaga reads.

The KQ boss said an internal review of operations conducted in May revealed the operations would not be sustainable with the status quo.

Kilavuka held that KQ, as is the case with other airlines globally, has been severely hurt by the pandemic, with the limited flying schedule not promising sufficient revenues.

The airline says with the suppressed demand for air transport, a large part of its fleet will remain grounded.

“We will also keep operating a reduced network as it will take some time before the industry starts to rebound,” Kilavuka said.

He added that short- and medium-term projections indicated that KQ must reduce operations to withstand reduced customer demand and economic shocks.KQ on Friday suspended flights to eight destinations in Africa, citing operational challenges. They were flights to Bamako, Blantyre, Brazzaville, Djibouti, Luanda, Khartoum, Maputo and Mogadishu.Various governments have instituted travel restrictions to stem the spread of Covid-19, a situation that has taken its toll on the aviation sector.About 1,500 employees of the 3,734 at KQ as of last December stand to be discharged from their roles in the company-wide restructuring.About 33 per cent of the workforce are in-flight operations, while ground operations account for 24.9 per cent, technical (13.8 per cent), commercial (12.5 per cent), cargo (4.3 per cent), and other sections (11.3 per cent).The remuneration of the airline’s staff constitutes a significant cost of operations, accounting for about 20 per cent of total costs.Captains earn an average of Sh1.6 million per month; […]

Kenya airways staff checks in a pilot during the launch the resumption of the International flights at Jomo Kenyatta International Airport (JKIA) Nairobi on August 1, 2020. [Elvis Ogina, Standard] Kenya Airways (KQ) on Friday notified its pilots of a plan to lay off a number of them as it continues with a restructuring exercise expected to see a substantial number of the airline’s employees rendered jobless. The carrier had been in plans to reduce its size after Covid-19 broke and grounded nearly all its operations. It noted that even with the resumption of flights, it will still need another two to three years before the industry can normalise. “We did an extensive internal review of operations in May 2020 and are inevitably forced to carry out an organisation-wide restructuring. This will culminate with, among other things, a reduction in our network, our assets as well as our staff,” said KQ Chief Executive Allan Kilavuka in a letter to the Kenya Airline Pilots Association (Kalpa). “Therefore, we write to inform you that following a thorough review, the Kenya Airways board has approved the decision to carry out redundancy across the company network. This, therefore, is a formal notification that we will be commencing redundancy process across the business.” The airline plans to lay off 40 per cent of its employees in the restructuring. The carrier had a headcount of 3,734 employees as at December last year, which would mean sending home about 1,500 employees. KQ hopes the exercise will enable it save about Sh600 million a month currently paid as salaries, which is about half of what it pays its employees currently at Sh1.2 billion a month. In the letter, Mr Kilavuka noted that even with resumption of flights, the carrier is a long way from where it was before the pandemic hit. He said it would take some time before the aviation industry can resume normal operations. “Even with the resumption of domestic and international flights, our very limited flying schedule means that sufficient revenues are not coming into our business. With the suppressed demand, a larger part of our fleet will remain grounded,” he said. “We will also keep operating a reduced network as it will take some time before the industry starts to rebound." Kalpa had a week ago written an open letter to President Uhuru Kenyatta asking him to halt the layoffs at the airline, […]