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Portfolio Balancing: Avoid Over Exposure To Financial Sector
Ericsson
#281 Posted : Wednesday, September 26, 2018 6:58:11 PM
Rank: Elder


Joined: 12/4/2009
Posts: 6,874
Location: NAIROBI
mlennyma wrote:
winmak wrote:
I just received texts from the banks. It is 20% of the transaction charge not the transacted amount @mlenny

So is it not eating on the banks charge side?


No it is not eating on the banks charge side,that remains intact.
For example for an EFT transaction the bank charges 200 and you are receiving ksh.60k as salary
If the 20% excise tax is included the statement will be like below;
Bank charge---ksh.200
Excise tax--ksh.40
total cost to be borne by customer ksh.240
Amount credited in customers account ksh.59760
Angelica _ann
#282 Posted : Wednesday, September 26, 2018 11:06:52 PM
Rank: Elder


Joined: 12/7/2012
Posts: 10,556
Ericsson wrote:
mlennyma wrote:
winmak wrote:
I just received texts from the banks. It is 20% of the transaction charge not the transacted amount @mlenny

So is it not eating on the banks charge side?


No it is not eating on the banks charge side,that remains intact.
For example for an EFT transaction the bank charges 200 and you are receiving ksh.60k as salary
If the 20% excise tax is included the statement will be like below;
Bank charge---ksh.200
Excise tax--ksh.40
total cost to be borne by customer ksh.240
Amount credited in customers account ksh.59760


So the robinhood tax was withdrawn?
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
Ericsson
#283 Posted : Wednesday, September 26, 2018 11:17:05 PM
Rank: Elder


Joined: 12/4/2009
Posts: 6,874
Location: NAIROBI
Angelica _ann wrote:
Ericsson wrote:
mlennyma wrote:
winmak wrote:
I just received texts from the banks. It is 20% of the transaction charge not the transacted amount @mlenny

So is it not eating on the banks charge side?


No it is not eating on the banks charge side,that remains intact.
For example for an EFT transaction the bank charges 200 and you are receiving ksh.60k as salary
If the 20% excise tax is included the statement will be like below;
Bank charge---ksh.200
Excise tax--ksh.40
total cost to be borne by customer ksh.240
Amount credited in customers account ksh.59760


So the robinhood tax was withdrawn?


Yes
Ericsson
#284 Posted : Sunday, September 30, 2018 6:43:17 PM
Rank: Elder


Joined: 12/4/2009
Posts: 6,874
Location: NAIROBI
Equity bank has stopped paying interest on deposits after the floor on the interest rates cap law was removed
VituVingiSana
#285 Posted : Monday, October 01, 2018 12:19:28 AM
Rank: Chief


Joined: 1/3/2007
Posts: 16,044
Location: Nairobi
Ericsson wrote:
Equity bank has stopped paying interest on deposits after the floor on the interest rates cap law was removed

I have shares in Equity but this "profit grab" is not right. This is retrogressive.
Perhaps some form of tiered interest depending on balances?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Gatheuzi
#286 Posted : Monday, October 01, 2018 7:22:35 AM
Rank: Veteran


Joined: 8/16/2009
Posts: 979
VituVingiSana wrote:
Ericsson wrote:
Equity bank has stopped paying interest on deposits after the floor on the interest rates cap law was removed

I have shares in Equity but this "profit grab" is not right. This is retrogressive.
Perhaps some form of tiered interest depending on balances?

I concur. Equity should have some accounts as interest earning to help retain some clients. This can be even be lower than the initial 7% they were paying. Fight for deposits will be the next frontier in local banking.
Time is money, so money is time. Money saved is time gained in reverse!
Angelica _ann
#287 Posted : Monday, October 01, 2018 8:05:09 AM
Rank: Elder


Joined: 12/7/2012
Posts: 10,556
Gatheuzi wrote:
VituVingiSana wrote:
Ericsson wrote:
Equity bank has stopped paying interest on deposits after the floor on the interest rates cap law was removed

I have shares in Equity but this "profit grab" is not right. This is retrogressive.
Perhaps some form of tiered interest depending on balances?

I concur. Equity should have some accounts as interest earning to help retain some clients. This can be even be lower than the initial 7% they were paying. Fight for deposits will be the next frontier in local banking.


I believe Dr. JM has vast experience in this field and he knows what he is doing. Probably what he used to do prior to rate cap.

Wonder why thier mobile loans have not picked up like mshwari has?
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
Ericsson
#288 Posted : Monday, October 01, 2018 8:51:38 AM
Rank: Elder


Joined: 12/4/2009
Posts: 6,874
Location: NAIROBI
Angelica _ann wrote:
Gatheuzi wrote:
VituVingiSana wrote:
Ericsson wrote:
Equity bank has stopped paying interest on deposits after the floor on the interest rates cap law was removed

I have shares in Equity but this "profit grab" is not right. This is retrogressive.
Perhaps some form of tiered interest depending on balances?

I concur. Equity should have some accounts as interest earning to help retain some clients. This can be even be lower than the initial 7% they were paying. Fight for deposits will be the next frontier in local banking.


I believe Dr. JM has vast experience in this field and he knows what he is doing. Probably what he used to do prior to rate cap.

Wonder why thier mobile loans have not picked up like mshwari has?

Their mobile loan product was tailored well
Ericsson
#289 Posted : Monday, October 01, 2018 8:53:43 AM
Rank: Elder


Joined: 12/4/2009
Posts: 6,874
Location: NAIROBI
Gatheuzi wrote:
VituVingiSana wrote:
Ericsson wrote:
Equity bank has stopped paying interest on deposits after the floor on the interest rates cap law was removed

I have shares in Equity but this "profit grab" is not right. This is retrogressive.
Perhaps some form of tiered interest depending on balances?

I concur. Equity should have some accounts as interest earning to help retain some clients. This can be even be lower than the initial 7% they were paying. Fight for deposits will be the next frontier in local banking.


That is true on the next frontier for local banking
VituVingiSana
#290 Posted : Monday, October 01, 2018 9:55:01 AM
Rank: Chief


Joined: 1/3/2007
Posts: 16,044
Location: Nairobi
Gatheuzi wrote:
VituVingiSana wrote:
Ericsson wrote:
Equity bank has stopped paying interest on deposits after the floor on the interest rates cap law was removed

I have shares in Equity but this "profit grab" is not right. This is retrogressive.
Perhaps some form of tiered interest depending on balances?

I concur. Equity should have some accounts as interest earning to help retain some clients. This can be even be lower than the initial 7% they were paying. Fight for deposits will be the next frontier in local banking.

I find it morally wrong but that's my view. Perhaps PN did have a point when he asked banks to be "moral"
I hope customers move excess funds into savings accounts be it at Equity or other banks.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Ericsson
#291 Posted : Tuesday, April 09, 2019 11:35:04 AM
Rank: Elder


Joined: 12/4/2009
Posts: 6,874
Location: NAIROBI
Heavy losses wiped out Spire Bank’s capital in the year ended December 2018, making it the sole lender in the country operating with a negative asset base of Sh1 billion and exposing Sh6.6 billion worth of customer deposits to risk.

The bank, in which Mwalimu National Sacco owns a controlling 75 percent stake, is now caught in an urgent quest for new capital because its losses have seen it breach all the minimum capital adequacy ratios by large margins.

The Sacco bought majority shares in the institution in 2015, when the lender was known as Equatorial Commercial Bank.
Besides teachers who are members of Mwalimu Sacco, the other shareholder is businessman Naushad Merali, who is also the bank’s founder.

As a rule, all banks must maintain a statutory minimum of Sh1 billion as core capital.

However, Spire Bank’s core capital stands at negative Sh1.6 billion.

Additionally, only a small fraction of the bank’s deposits is insured as per the maximum deposit guarantee of Sh100,000 per customer exposing the bulk of Spire Bank’s deposits to risk from the capital depletion.

Spire Bank said it is in the process of arranging to raise fresh capital from an unnamed strategic investor who is set to acquire a stake in the lender.

The bank’s current shareholders are also ready to provide new capital should the deal with the strategic investor be completed.

The company further claimed that the Central Bank of Kenya (CBK) — which has in the past shut down lenders such as Dubai Bank and Chase Bank on the basis of liquidity crises - is well briefed about its plans to raise additional capital.

“The shareholders are fast-tracking an ongoing recapitalisation programme with a strategic investor already identified and the transaction is at an advanced stage,” Spire Bank managing director Norman Ambunya said.

“This process is subject to regulatory approval and is also subject to non-disclosure and confidentiality agreements in force. CBK is aware of ongoing recapitalisation initiatives and is currently reviewing the strategic investor transaction for approval.”

Central Bank did not respond to the Business Daily’s queries on Spire Bank’s financial position.

The fact that the institution continues to operate despite its lack of compliance has raised queries about the CBK’s inconsistency in its regulation of banks.

Analysts say the regulator’s tolerance in the case of Spire Bank should be seen from the context of the lender’s constituency and the recent bank failures.

Political consequences

“Spire Bank is owned by teachers through Mwalimu National Sacco and shutting it down will have political consequences. Closing another bank will also further shake confidence in the sector,” said a banking sector analyst who sought anonymity to speak candidly.

A substantial portion of the bank’s deposits ultimately represent teachers’ savings.

It is not clear how much the general public has deposited in Spire Bank.

The lender’s deteriorating performance underlines the losses that Mwalimu Sacco is booking from its controversial acquisition of the institution in 2015.

The sacco invested a total of Sh2.4 billion to take a 75 per cent stake in the lender in a transaction that also included buying shares from Mr Merali.

Spire Bank has, however, remained in losses that have whittled down its book value to negative Sh1 billion in the year ended December, erasing all of Mwalimu’s investment.

The bank’s net losses doubled to Sh2.2 billion in the review period compared with Sh1.1 billion the year before.

The bank has never paid a dividend since Mwalimu became a shareholder, adding to the weight of the losses suffered by teachers.

The buyout of the bank raised eyebrows when the information became public, with various government agencies suspending the deal before later approving it.

Due diligence

It emerged later that Mwalimu Sacco had agreed to make the acquisition without conducting a due diligence on the bank.

Former officials of the sacco were also accused of conflict of interest, with ex-CEO Robert Shibutse having worked for then Equatorial Commercial Bank and other companies associated with Mr Merali.

Ahead of the transaction, the lender transferred its office building from Equatorial Fidelity Centre in Nairobi’s Westlands area to its associate company, Fidelity Shield Insurance, in which it held a minority stake at the time.

Despite the lender’s historical losses, former officials of Mwalimu Sacco remained upbeat about the deal.

Mr Shibutse, for instance, argued that the transaction would save Mwalimu banking fees and stop its members from ditching the sacco for mainstream lenders.

https://www.businessdail...63150-npoystz/index.html
Angelica _ann
#292 Posted : Tuesday, April 09, 2019 4:27:20 PM
Rank: Elder


Joined: 12/7/2012
Posts: 10,556
Then there are guys with huge deposits in such banks and when it collapsed they start crying ati sirkal etc. Yet the red flags are all blinking bright at the moment.
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
murchr
#293 Posted : Tuesday, April 09, 2019 7:14:45 PM
Rank: Elder


Joined: 2/26/2012
Posts: 14,596
What is the "strategic investor" getting out of this? And didnt Waalimu auditors see this coming?
"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
.
Ericsson
#294 Posted : Wednesday, April 24, 2019 9:22:49 AM
Rank: Elder


Joined: 12/4/2009
Posts: 6,874
Location: NAIROBI
Seems KCB is the only kenyan bank that made a profit/good returns in Tanzania.
NIC,CBA and Equity Bank Tanzania were in the loss territory;

Equity’s Tanzanian unit recorded a pre-tax loss of Sh559 million last year, reversing a pre-tax profit of Sh352 million in 2017. It was the only unit to report a loss in the review period.

Its expenses, including impairment of financial assets, rose to Sh2.6 billion from Sh1.8 billion, underlining the impact of the new rules.

NIC’s Tanzanian subsidiary’s net losses also widened to Sh113.6 million from Sh107.2 million.

CBA Group also took a hit of more than Sh600 million from the new loan impairment rules last year.

https://www.businessdail...4752-u5vik5z/index.html

KCB Bank Tanzania profit before tax grew by 3989% from ksh.19mn to 777mn
sparkly
#295 Posted : Wednesday, April 24, 2019 11:01:59 AM
Rank: Elder


Joined: 9/23/2009
Posts: 7,046
Location: Enk are Nyirobi
Ericsson wrote:
Seems KCB is the only kenyan bank that made a profit/good returns in Tanzania.
NIC,CBA and Equity Bank Tanzania were in the loss territory;

Equity’s Tanzanian unit recorded a pre-tax loss of Sh559 million last year, reversing a pre-tax profit of Sh352 million in 2017. It was the only unit to report a loss in the review period.

Its expenses, including impairment of financial assets, rose to Sh2.6 billion from Sh1.8 billion, underlining the impact of the new rules.

NIC’s Tanzanian subsidiary’s net losses also widened to Sh113.6 million from Sh107.2 million.

CBA Group also took a hit of more than Sh600 million from the new loan impairment rules last year.

https://www.businessdail...4752-u5vik5z/index.html

KCB Bank Tanzania profit before tax grew by 3989% from ksh.19mn to 777mn


Tanzania is a very tough business environment to foreigners. Kenyan banks are in Tanzania, not because they expect to make a profit but to complete their regional footprint.
Life is short. Live passionately.
VituVingiSana
#296 Posted : Wednesday, April 24, 2019 2:18:37 PM
Rank: Chief


Joined: 1/3/2007
Posts: 16,044
Location: Nairobi
Ericsson wrote:
Seems KCB is the only kenyan bank that made a profit/good returns in Tanzania.
NIC,CBA and Equity Bank Tanzania were in the loss territory;

Equity’s Tanzanian unit recorded a pre-tax loss of Sh559 million last year, reversing a pre-tax profit of Sh352 million in 2017. It was the only unit to report a loss in the review period.

Its expenses, including impairment of financial assets, rose to Sh2.6 billion from Sh1.8 billion, underlining the impact of the new rules.

NIC’s Tanzanian subsidiary’s net losses also widened to Sh113.6 million from Sh107.2 million.

CBA Group also took a hit of more than Sh600 million from the new loan impairment rules last year.

https://www.businessdail...4752-u5vik5z/index.html

KCB Bank Tanzania profit before tax grew by 3989% from ksh.19mn to 777mn

I&M (TZ) PAT grew from from TZS 4.9 Bn (2017) to 6.2 Bn (2018) but the RoE in TZ is very poor compared to KE, RW and MU.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Ericsson
#297 Posted : Wednesday, April 24, 2019 2:34:42 PM
Rank: Elder


Joined: 12/4/2009
Posts: 6,874
Location: NAIROBI
VituVingiSana wrote:
Ericsson wrote:
Seems KCB is the only kenyan bank that made a profit/good returns in Tanzania.
NIC,CBA and Equity Bank Tanzania were in the loss territory;

Equity’s Tanzanian unit recorded a pre-tax loss of Sh559 million last year, reversing a pre-tax profit of Sh352 million in 2017. It was the only unit to report a loss in the review period.

Its expenses, including impairment of financial assets, rose to Sh2.6 billion from Sh1.8 billion, underlining the impact of the new rules.

NIC’s Tanzanian subsidiary’s net losses also widened to Sh113.6 million from Sh107.2 million.

CBA Group also took a hit of more than Sh600 million from the new loan impairment rules last year.

https://www.businessdail...4752-u5vik5z/index.html

KCB Bank Tanzania profit before tax grew by 3989% from ksh.19mn to 777mn

I&M (TZ) PAT grew from from TZS 4.9 Bn (2017) to 6.2 Bn (2018) but the RoE in TZ is very poor compared to KE, RW and MU.


TZs 4.9bn=ksh.216mn
TZs 6.2bn=ksh.273mn
VituVingiSana
#298 Posted : Wednesday, April 24, 2019 3:01:41 PM
Rank: Chief


Joined: 1/3/2007
Posts: 16,044
Location: Nairobi
Ericsson wrote:
VituVingiSana wrote:
Ericsson wrote:
Seems KCB is the only kenyan bank that made a profit/good returns in Tanzania.
NIC,CBA and Equity Bank Tanzania were in the loss territory;

Equity’s Tanzanian unit recorded a pre-tax loss of Sh559 million last year, reversing a pre-tax profit of Sh352 million in 2017. It was the only unit to report a loss in the review period.

Its expenses, including impairment of financial assets, rose to Sh2.6 billion from Sh1.8 billion, underlining the impact of the new rules.

NIC’s Tanzanian subsidiary’s net losses also widened to Sh113.6 million from Sh107.2 million.

CBA Group also took a hit of more than Sh600 million from the new loan impairment rules last year.

https://www.businessdail...4752-u5vik5z/index.html

KCB Bank Tanzania profit before tax grew by 3989% from ksh.19mn to 777mn

I&M (TZ) PAT grew from from TZS 4.9 Bn (2017) to 6.2 Bn (2018) but the RoE in TZ is very poor compared to KE, RW and MU.


TZs 4.9bn=ksh.216mn
TZs 6.2bn=ksh.273mn

PBT increased from TZS 7bn to 9bn. Poor ROI/ROE.
2019 may be better given 2018 had larger than expected write-offs but I expect TZ banks to increase lending to GoT (T-Bills and T-Bonds) instead of lending to the private sector.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Ericsson
#299 Posted : Wednesday, April 24, 2019 3:17:35 PM
Rank: Elder


Joined: 12/4/2009
Posts: 6,874
Location: NAIROBI
VituVingiSana wrote:
Ericsson wrote:
VituVingiSana wrote:
Ericsson wrote:
Seems KCB is the only kenyan bank that made a profit/good returns in Tanzania.
NIC,CBA and Equity Bank Tanzania were in the loss territory;

Equity’s Tanzanian unit recorded a pre-tax loss of Sh559 million last year, reversing a pre-tax profit of Sh352 million in 2017. It was the only unit to report a loss in the review period.

Its expenses, including impairment of financial assets, rose to Sh2.6 billion from Sh1.8 billion, underlining the impact of the new rules.

NIC’s Tanzanian subsidiary’s net losses also widened to Sh113.6 million from Sh107.2 million.

CBA Group also took a hit of more than Sh600 million from the new loan impairment rules last year.

https://www.businessdail...4752-u5vik5z/index.html

KCB Bank Tanzania profit before tax grew by 3989% from ksh.19mn to 777mn

I&M (TZ) PAT grew from from TZS 4.9 Bn (2017) to 6.2 Bn (2018) but the RoE in TZ is very poor compared to KE, RW and MU.


TZs 4.9bn=ksh.216mn
TZs 6.2bn=ksh.273mn

PBT increased from TZS 7bn to 9bn. Poor ROI/ROE.
2019 may be better given 2018 had larger than expected write-offs but I expect TZ banks to increase lending to GoT (T-Bills and T-Bonds) instead of lending to the private sector.


Put in ksh.
Use exchange rate of 1ksh=TZS 22.7
murchr
#300 Posted : Monday, May 20, 2019 4:20:43 PM
Rank: Elder


Joined: 2/26/2012
Posts: 14,596
NOTICE - STAWI mobile loan facility of 30 - 250K, payable within 1 -12 months at an interest of 9% per annum



"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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