Abacus Wealth Management

Tuesday Brief – 3rd Feb

Mwalimu Sacco’s bid for ECB splits co-op movement

Banks defy new loan pricing tool to rake in Sh141bn

The latest statistics show there has been high interest rates and growth in lending which has helped Kenyan banks to raise their profits by Sh18 billion. The super profits are attributed to a 22.8 per cent extension of the loan book to Sh1.97 trillion and relative stability of interest rates, leading to the wildest growth in the past four years. Banks have been criticized publicly of choosing to protect their profits and being slow in transferring the benefits of an improved economic environment to investors through lower lending rates despite the latest KBRR rate being introduced to ease the interest rates […]

Kenya’s bank loan conditions among toughest in Africa

The IMF has ranked Kenyan banks as one of those having the stringent collateral requirements amongst six countries surveyed, namely, Philippines, Egypt, Mozambique, Uganda and Malaysia. Kenyan banks ask for a collateral which is 20 per cent higher than the value of the loan while Philippines had the worst rating with a collateral charge of more than twice the loan amount applied for. One of the reasons leading to high collateral requirements are lack of information on the borrower. Suggested remedies to high collateral by banks are acquisition of reliable registries for machines and vehicles, equipment, land and buildings, among other things and implementation of more low-fee accounts by banks and simplification of documentation requirements […]

Mwalimu Sacco’s bid for ECB splits co-op movement

The cooperative movement has been split down the middle with two independent cooperatives’ bodies, Kenya Union of Savings and Credit Co-operatives (Kuscco) and the Co-operative Alliance of Kenya (Cak) differing on whether to ratify the sale of Equatorial Commercial Bank (ECB) to Mwalimu National Sacco’s. Co-operative Alliance of Kenya (Cak) alleges that there is presence of serious corporate governance issues in the deal with ECB having participated in asset stripping ahead of sale to the Sacco. The rival lobby group, Kussco has criticized these concerns indicating that they were meant to derail the deal […]

Lenders shy away from oil explorers amid falling crude prices

Kenyan oil explorers are finding it difficult to access funds from lenders due a drop in the prices of international crude oil. This has further been aggravated by introduction of the capital gains tax (CGT) on sale of shareholding in Kenya and low demand for oil due to recession in several European countries and relatively low growth in China. On the other hand, the cost of operation for these firms is still high […]

Canadian explorer raises funds for Mandera oil block

Simba Energy, a Canadian oil and gas explorer, has raised Sh32.5 million,  to carry out further exploration on its Mandera block, through a private placement. Net proceeds will be used to fund their exploration commitments. Tullow Oil, ERHC and Taipan Resources are the other explorers who have that have confirmed that they will continue with exploration despite an unfavorable capital raising market […]

 

 

 

 

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