2009 Kenya Bank Rankings Part I

Late in February 2009, the Central Bank of Kenya released their bank charges survey (PDF). The earlier comments after the last survey still apply mainly:

1 It’s a good read
2 Customer satisfaction/service should be measured (it’s not just about costs)
3 Savings accounts do attract charges (any pay very little interest)

Banking will probably get cheaper as banks adapt to competition from mobile companies –i.e. Safaricom M-Pesa and Zap from Zain which are becoming become mini e-wallets.

Also found was a recent article on avoidable bank charges - which were:

1 overdraft fees
2 ATM fees (that means avoid pesa point and Visa charges)
3 Minimum balance fees

I’m looking for a new transactional bank account for the year. Generally need to low cost, quick, pleasant service, forex, standing orders, cheque book, ATM network, probably an introduction credit card etc?

Which Kenyan bank has the best current account?
( surveys)

My top choices are Equity, Stanchart or Barclays. Indicate appropriate tariffs and put your comments/reasons below.

Thanks

Kenya Bank Charges

World Bank Africa Blog

2007 Kenya Bank Ranking Part III

It is now acknowledged that commercial banks have put the ghost of bad debts behind them and have moved on to new clean lending books. However a lot of the decline in non-performing assets can be attributed to an increase in the overall loan book (not really a decline)

Also, the future may not be without a repeat if you fast forward two years from now when a fraction of the unsecured loans being hawked at anyone with a pay slip now will likely have gone bad. With the passage of the in duplum rule banks have to cut their losses and begin collection efforts as soon as they realise a loan is in trouble.

But the courts are clogged and it is difficult to collect from unsecured loans as there are no assets to recover and where the amounts being pursued are not worth the legal cost in money and time.

Other recent happenings

- Diamond Trust (Kenya) to participate in rights issue of Diamond Trust Tanzanian where it owns 33%
- Equity bank growth getting super heated?
- Family Bank is Kenya’s newest bank
- Housing finance new product for first time homeowners
- Kenya Commercial Bank gets a new CEO
- Perennial loss maker Oriental bank (formerly Delphis) is on track for a profit this year following a restructuring deal at Miwani Sugar.

Standard Bank (of South Africa) operates as Stanbic in other parts of Africa.

Here’s a snapshot comparison of the 2006 financial results of Stanbic Kenya and Stanbic Uganda.

Stanbic Kenya is unlisted while several Kenyans participated in the 2006 Stanbic Uganda IPO which was relatively cheap owing to the exchange rate difference (25:1) between Kenya and Uganda. The Stanbic (UG) IPO was partly blamed for the performance of the Mumias (Kenya) rights issue whose uptake was judged to be average.

Merger talks between Stanbic (K) and CFC which is another locally listed Kenyan bank are at an advanced stage. So how do the bank’s compare?

Approximate figures in US$

Rank
Uganda Stanbic (1 in Uganda)
Kenya Stanbic (9 in Kenya)
CFC (10)

Assets
Uganda Stanbic $725 million
Kenya Stanbic 378 million
CFC 371 million

Deposits
Uganda Stanbic $513 million
Kenya Stanbic 289 million
CFC 271 million

Loans
Uganda Stanbic $195 million
Kenya Stanbic 166 million
CFC 220 million

Pre-tax Profits
Uganda Stanbic $32.3 million
Kenya Stanbic 13.4 million
CFC 9.9 million

You know it’s time to change your bank when you have to line up before the bank doors open and are stuck in a barely moving line for the next 30 minutes after it opens - as the tellers are too few and the processing system is slow.

But that’s what you get for cheap banking especially with their foreign exchange dealing and processing charges so low & attractive.