KSH 3,500 USHS. 121,200 BANKING TSHS. 75,500 RWF. 28,400 SURVEY USD. 50 20182018
RECALIBERATING FOR NEW STANDARDS
INSIDE: l 2018 Q1 ANALYSIS l 2017 - 2013 RESULTS AND ANALYSIS l MARKET SHARE ANALYSIS 2017- 2013 l TARRIF SURVEY l CEO INTERVIEWS l INDIVIDUAL BANK ANALYSIS l 2018 CUSTOMER SATISFACTION INDEX l 2016- 2017 RANKINGS AND RATINGS l PERFORMANCE OF MFBs
BANKING SURVEY | 2018 1 WHEN YOU PERFORM AT YOUR BEST, WE KNOW WE PERFORM AT OURS.
We’re proud of these awards, which reflect our drive to help businesses across East Africa get the competitive edge they need to transact, invest, expand and grow.
Best Tier II Bank, Best Corporate Bank and Best Trade Finance Bank, Think Business Awards, Kenya.
Best Corporate Bank in Kenya, Uganda and Tanzania, Banker Africa Awards, East Africa.
citi.com/progress Tel: +254 763 063 000 Tel: +254 763 063 000 2 BANKING SURVEY | 2018 © 2018 Citigroup Inc. Citi and Citi with Arc Design are registered service marks of Citigroup Inc. Tel: +254 763 063 000 Tel: +254 763 063 000 CONTENTS Executive Summary...... 4 Recalibrating for new standards...... 6 IFRS 9: Coming to terms with reality...... 9 Structure of Kenya’s Banking Industry...... 11 BANKING INDUSTRY RESULTS Q1 2018...... 12 RESULTS AND ANALYSIS 2013 - 2017...... 28 Market Share Analysis 2013- 2017...... 47 BANKING TARIFF SURVEY 2018...... 81
CEO INTERVIEWS BANK OF INDIA KENYA...... 112 GULF AFRICAN BANK...... 113 SMEP...... 114 SUMAC...... 115 PRIME BANK...... 116 SIDIAN BANK...... 117 I&M BANK...... 118 KCB...... 119 MAYFAIR BANK...... 120 CONSOLIDATED BANK...... 122 EQUITY BANK...... 123 PARAMOUNT...... 125 BANK OF AFRICA...... 126 CITI BANK...... 127 BANK OF BARODA...... 128 KWFT...... 129 U&I ...... 130 FAULU...... 131 CRAFT SILICON ...... 132 KENYA BANKERS ASSOCIATION...... 133
THE CUSTOMER SATISFACTION INDEX FOR THE BANKING INDUSTRY (BANKTRAK)...... 134 Bank Perfomance Rankings...... 140 Bank Performance Ratings (BPR) 2016 - 2017...... 147
TBL MFB SURVEY 2018 – 2017 RESULTS AND ANALYSIS...... 158 INDIVIDUAL DATA - BANKS TIER I...... 181 TIER I – AGGREGATE...... 210
TIER II...... 203 TIER II – AGGREGATE...... 221
TIER III...... 223 TIER III – AGGREGATE...... 241
TIER IV...... 243 TIER IV – AGGREGATE...... 265
INDUSTRY AGGREGATE...... 267
INDIVIDUAL DATA – MFIs...... 269
BEST BANKS IN KENYA 2018 UNVEILED...... 282
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4 BANKING SURVEY | 2018 BANKING SURVEY | 2018 5 Executive Summary
Recalibrating for New Standards The theme for this year’s banking survey is “Recalibrating for New Standards”. This has been prompted by the IFRS 9 standard that came into effect in 2018 and is expected to change and improve financial reporting standards in the banking industry. An in depth article covering this new standard has been published elsewhere in the book. We at the Think Business believe in “thinking outside the box” however, so we have also published an article that explores new trends in the banking that are changing the face of the industry and have become EDITORIAL: standard practice for most of the key players in the banking fraternity. PUBLISHER & EDITOR IN CHIEF Ochieng Oloo The banking industry experienced moderate growth of 9% in total assets which however for the first time crossed the KSH 4 trillion mark, and 4.4% in loans and advances to customers. The effect of the interest rate WRITERS capping law that was passed in Sept 2016 can clearly be seen in the depressed earnings and low profitability Njeri Murigi Nelius Kanyingi that resulted in negative growth of -3.1% in total income and -7.7% in industry PBT for 2017. Rachael Kibe Jack Odhiambo Banking Survey 2018 Jeremiah Ombok
Tariff Survey 2018 GRAPHIC DESIGN Jeremiah Ombok The tariff survey this year includes a section on Mobile Money Transfer Services that has been informed by a study that was carried out by Infotrak on behalf of Think Business, with the support of FSD Kenya. Excerpts of LOGISTICS this study have been included in the survey. Frank Agutu
Banking Sector Reports CORPORATE: FOUNDER & CEO We will not be carrying out the Regional and Segmental Banking reports will also be missing from this year’s Ochieng Oloo survey as they are based on the banks’ annual reports which are yet to be published. All these reports will be however be available in PDF format at a later date and will also be posted on our website. FINANCE DIRECTOR Caleb Orwa Note: The Banking Tariff Survey 2018, Market Share Analysis 2013 – 17, Banking Survey First Quarter 2018 ACCOUNTANT Results and the Regional and Segmental Banking Reports will be posted on our website and are all available as Hamphrey Odongo separate publications in PDF form. COMMERCIAL MANAGER Key high-lights of the past year Purity Kongere
HEAD OF RESEARCH Banks in receivership Bede Nesbitt June 2017- The bidding results for Chase Bank were unveiled in an ongoing receivership exit process organized 0795 599 999 by the Central Bank of Kenya (CBK). The frontrunners who emerged top of the list of investors to acquire Chase RESEARCH ANALYST Bank and its subsidiary Rafiki Microfinance were France’s third-largest bank by assets, Societe Generale, and Dave Oricho Mauritius-based SBM Holdings. Jack Odhiambo
INTERNS June 2017-Dubai Bank (in liquidation); the bank’s depositors and creditors are called upon to show up and file Mirriam Pareyio claims by the Kenya Deposit Insurance Corporation. The bank’s bad debts stalled the court process however. Rachael Kibe
June 2017-Imperial Bank (under receivership) is granted a 90-day extension of the receivership by the court. MARKETING EXECUTIVES Joan Williams However, this doesn’t imply an endorsement of any of the ongoing discussions between shareholders of the bank. ADMIN Wendy Adhiambo Interest rates capping In accordance to the law passed in Sept 2016 that caps the rate commercial banks are permitted to charge DIGITAL MARKETING CO-ORDINATOR Daniel Ogeto on loans to 4 basis points above the CBK base rate, from March 2018 Kenyans have been paying 0.5% less in interest on all commercial loans following the lowering of the CBK base rate from 10% to 9.5%, meaning CINEMATOGRAPHER/PHOTOGRA- Kenyans are paying 13.5% interest on loans compared to 14 % that was previously being charged by the PHY/ VIDEO EDITOR banks. Anthony Juma
CONTACTS IFRS 9 Reporting Standard Think Business Limited, Jan 2018; The IFRS 9 comes into effect, replacing the IAS 39 financial reporting standard that has been in use 87 Rhapta Road, Westlands for the past 15 years. P.O. Box 12800 - 00100, GPO, Nairobi Your wallet You’re protected, You’re always Tel: +254 020 4453881/2 Stanbic Bank Kenya e-Biller Launch E: [email protected] Web: www.thinkbusinessafrica.com Feb 2018; Stanbic Bank launched the e-Biller, an automated platform on which businesses can process will thank you! no matter what! sorted! invoices and generate payment instructions. The e-Biller is a first of its kind in Kenya and is suitable for businesses that handle huge volume of payments. Political violence & Barclays Bank launches the Timiza App Rate from 3.75% Provides excess protector March 2018; Barclays Bank launched its new mobile app, Timiza, which provides their customers with access terrorism cover to instant micro-loans from their phones. Underwritten by 6 BANKING SURVEY | 2018 Jubilee Insurance Company and Saham Assurance BANKING SURVEY | 2018 7 COVER STORY COVER STORY of their homes, at the office or on the ago while commuting USB Evidence Lab estimates that the number of mobile to and from their place of work. banking users will hit 1.8bn by 2020, representing a quarter of the world’s population. The report also contains some Digital Banking is rapidly becoming the new frontier in interesting findings that illustrate the importance of mobile Recalibrating for new standards banking, replacing the old “brick and mortar” model of banking to the industry: By Bede Nesbitt disregard the basic life lesson that there are some risks maintaining a physical branch network and can in this light § The provision of mobile banking has become a key point in which are worth taking. These minimal capital requirements be considered to a banking standard for the future that no selecting a bank not only for potential customers, but for Are strict banking sector standards and close supervision reward “low risk” investments with additional cost saving serious player in the banking industry can bypass and remain existing bank customers considering moving to another of banks’ good for developing economies? benefits at the expense of “high risk” investments which competitive in the financial markets. service providers Most developing countries are striving to catch up with their limits the amount of financing available for venture capital § Large banks are buying up “tech start-ups” in their efforts more developed counterparts in putting in place appropriate and other investments that drive growth in a developing Banking standards suited to developing economies to keep up with rapid changes in technology and remain measures to regulate their fiscal economies. The regulation of economy. The credo that a stable banking sector is the competitive in the mobile banking sector § Banks that have strong and efficient mobile banking banks and their operations plays a big part in this regulation. panacea for long term economic growth does not take in to Mobile Banking – The New Normal platforms and properly executed strategies are in the best This need for closer scrutiny of the financial markets and consideration the stage at which the nation’s economy cycle Mobile banking is an innovation that has opened a new position to succeed in the new frontier of digital banking their operations can be traced to the financial crises of the is. Economies require different stimulus at certain stages in frontier in the provision of financial services, making it eighties and early nineties in, culminating in a conference their growth cycles. possible to offer fast, personalized banking services to the Results from the study indicate that mobile banking has that was held to discuss and recommend standards for average customer. This innovation has also made it possible become the biggest channel of operations for the majority the supervision of international banking groups and their Thinking outside the box to greatly increase financial services penetration in the of banks globally, particularly in the developing world where multinational operations in 1992 in Basle, Switzerland. The Moving away from the traditional banking standards such as developing world, reaching all corners of the population it has spread rapidly among the general population that had standards that were set as a result of this conference known the ones that were set by the 1992 Basle Committee, there and giving the previously unbanked an efficient and reliable little or no access to banking services under the old mode of as the 1992 Basle Committee standard for the supervision of are a number of recent innovations that have disrupted the access to banking services at an affordable cost. international banks with multinational operations helped banking sector and financial markets in general. These recent operation. calm their concerns about their businesses in developing developments have changed the face of banking particularly According to the Communication Authority of Kenya (CAK) The following table which is an extract from the report shows countries which were considered to be at risk without proper in the developing world. Technological developments have statistics, over 26m people and half a million businesses mobile banking penetration levels across a cross-section of national banking regulations and supervision. This kicked made it possible for bank customers to carry out most and corporates are currently using mobile banking in Kenya. countries worldwide: of the widespread banking sector reforms that began in the of their transactions from the comfort of their homes or Kenya Commercial Bank (KCB) was the first institution mid-nineties which have continued to date. wherever they may be located at a given point in time. Some to offer mobile banking services back in 2005 with their The table clearly shows that penetration levels of mobile of these innovations have greatly transformed banking in the product, KCB Connect which offered SMS based banking banking is much higher in developing countries compared to For developing economies, these banking sector and developing world and in the process have become an integral services followed by KCB Connect II in 2008 and KCB Mobi that in the more developed economies. financial markets reforms became crucial as they have part of how we carry out our banking needs, becoming the Bank in 2011. The bank was also the first institution in Kenya been directly tied to the nations’ access to the international “new normal”. If we were to think “outside the box”, these to offer virtual bank account opening using a mobile phone Taking into account the numbers and the rapid technological financial markets. The structural adjustment programs that innovations can be considered to be new standards that will with Mbenki which was launched in 2013. Today, almost all advancements in the provision of mobile banking services, were implemented in most developing economies during the shape the future of banking and the financial markets. of the commercial banks in the country offer mobile banking no financial institution can afford to be left out. Thinking nineties were as a result of these worldwide reforms in the services in the form of platforms that are easily downloaded “outside the box”, this can be considered a new banking financial markets. Here in Kenya as in the majority of African countries, banks and installed, enabling the bank customer to start using the standard that affects not only existing institutions, but all have had to move from traditional banking methods and facility almost immediately. Banks in developed economies avoid risk at all cost adapted to these new innovations to remain relevant and new entrants as well who have to offer the mobile banking services to remain relevant and compete effectively in the The end result of the banking sector reforms stemming from compete in what has become a very competitive industry The Global Mobile Banking Report published by KPMG and the Basle Committee standards has been to mitigate risk at with a dynamic demographic that expects their service financial services industry. any cost. These standards and regulations have excluded the providers to keep up with new technological advancements two major functions of banking that are crucial to developing in the sector. Some of the recent innovations that have economies, mainly to provide developmental capital that become the “new normal” are: spurs growth in the economy and open up new opportunities for aspiring entrepreneurs who are so instrumental in Digital Banking – The New Frontier developing a nation’s economy in its developing stage. The Digital Banking by definition is the transfer of all of a Basle Committee standards on banking and other financial bank’s activities on to an online platform that is accessible markets regulations are to a large extent adverse to risk from both personal computers and mobile devices. It must which is what drives the entrepreneur spirit and stimulates be differentiated from Online or Internet Banking which rapid growth in a developing economy. Strict banking sector is limited to banking activities that are related to account standards on capital requirements completely ignore the management, such as online deposits, money transfers fact in a developing economy, there are some risks that are and the payment of bills. Digital Banking on the other hand not only worth taking, but just might make the difference encompasses all of bank’s functions that would normally be between a rapidly growing economy and a stagnant one. transacted in the banking hall. It is essentially the transfer of all of the bank’s activities on to an online platform, Primary functions of banks in developing countries making physical visits to the bank by customers redundant. It has been speculated among economists that one of the The global banking industry has not entirely embraced this basic diving forces behind the rapid growth of the United innovation, many players across the divide still have faith States economy in its early stages was the existence of an in the traditional banking model of having banking halls aggressive banking sector which was willing to take risk, as and operating physical branches, their only concession it operated in a less regulated environment. A lot of banks to the digital age being the provision of online or internet failed as a result of this willingness to take risks, but even banking. For banks to survive in this digital age, they have those that folded after backing high risk ventures left to embrace digital banking or perish. Conservative estimates behind numerous developments and enterprising projects put the amount of transactions currently being conducted that spurred growth during this very important stage in the on a digital platform in the more developed economies at country’s economy. In the past few decades, the direction 30%, meaning that this amount of the bank’s revenue is taken in the banking sector of avoiding risk at all cost may being generated through digital banking. This percentage have actually slowed down growth in the economy for is constantly rising as more and more consumers discover many developed countries. Minimal capital requirements the ease and convenience of banking at one’s own terms and established by the Basle Committee standards entirely from anywhere that they choose, whether from the comfort Source: Global Mobile Banking Report by KPMG
8 BANKING SURVEY | 2018 BANKING SURVEY | 2018 9 COVER STORY IFRS
Agency Banking – a banking innovation from the South Africa and Uganda have also adopted the model. developing world IFRS 9: Coming to terms with reality Agency Banking by definition is the provision of limited Here in Kenya, Equity Bank owes a large part of its success banking and financial services to the underserved population from mobilizing deposits through its extensive agency by agents engaged under a valid agency agreement with network in the country, KCB and CO-OP Bank also have a bank. The owner of the outlet that has a valid agency extensive networks spread throughout the country. In the By Asif Chaudhry, Partner, PKF Kenya Whilst the analysis above may be oversimplifying the impact agreement carries out limited banking transactions on Far East, banks in Bangladesh have also embraced agency of IFRS 9, financial institutions are in fact facing a number of behalf of the bank. The Central Bank of Kenya (CBK) defines banking e.g. Bank Asia in January 2017 announced that it International Financial Reporting Standard 9 on Financial challenges with this. The concept, whilst theoretically sound a Bank “Agent” as an entity that has been contracted by would increase its agency network by the addition of 2,000 Instruments (IFRS 9) is the culmination of several years and logical, is in reality much harder to translate into reliable an institution and approved by the CBK to provide certain bank agents to the existing 1,200. of work which commenced shortly after the 2008 global numbers for purposes of financial reporting. Financial services on behalf of the institution, which is usually a bank financial crises. Kenyan reporters will adopt IFRS 9 with effect institutions deal with a multitude of product types across or a deposit taking financial institution. The bank agent Banking on the future from 1 January 2018. Whilst it is widely understood that IFRS all sectors of the economy with individual loan portfolios is equipped with a certified Point of Sale (POS) terminal Agency Banking has the advantage of rewarding all the 9 will overcomplicate accounting for financial instruments, often running into the several thousand individual facilities. in which they process deposits and withdrawals after the participants in the model, the bank agent benefits in income the intention and indeed reality is that IFRS 9 replaces IAS Development of models is necessary, however keeping these bank customer have swiped their bank debit or credit cards. from the commissions earned in providing banking services 39 which was considered to be overly complex and difficult models simple to understand and robust is perhaps more The POS terminal is connected to a nearby bank branch by on behalf of the bank; the bank customer benefits from to understand and that simplifying the requirements of important. GPRS data connection using a telecommunications service the localized and easy access to banking services; the bank IAS 39 was one of the main objectives in developing IFRS 9. provider. benefits from wider customer deposit base and income IFRS 9 uses a more principle-based model to accounting for Reliable estimation of expected credit losses under IFRS is from fees and commissions on a larger number of banking financial instruments as compared to the rule-based model a ‘data hungry’ process and a practical challenge that most The agency banking model is being recognized in many transactions. The bank gains from an additional cost benefit, in IAS 39. financial institutions are dealing with as they work on Q1 countries as a secure, simple and fiscally viable tool in saving on the considerable expenses that it would have to 2018 numbers under IFRS 9 is the availability of sufficient increasing the penetration of banking services by providing incur in opening branches to provide the banking needs that The other primary objective in coming up with IFRS 9 was and reliable historical data. formal financial services in areas that the traditional banking are taken care of by its agents. For a developing country, to have a standard that dealt with the gap between when The interaction of an accounting model which reflects reality methods have failed to reach. Globally, the agency banking agency banking is a very useful tool for financial services institutions reported impairment losses compared to when of credit risk in real time in contrast to regulations such as model has proved a big success in Latin America where Brazil, inclusion of the population, with the contracted agents such losses had been anticipated, thereby introducing interest rate capping presents another significant challenge which is considered to be the pioneer of agency banking acting as proxies’ for the banks in the provision of banking the expected credit loss methodology. IAS 39 followed an because of the disparity between financial return from high worldwide, currently has 99% of its municipalities covered. services. incurred loss model which was criticized in the wake of the risk lending and the need for greater upfront expected credit Banks in Argentina, Columbia, Ecuador, Peru and Mexico 2008 global financial crisis for delaying the recognition and loss provisions on such lending. The unfortunate outcome of soon followed Brazil’s example and now have extensive The agency banking model is a win-win for all parties reporting of credit losses. this is that banks are shying away from high risk lending to agency banking networks. Further afield, Pakistan, India and involved and can therefore be considered to be banking avoid this accounting and reporting mismatch. the Philippines have also embraced the model and in Africa, standard of the future in the developing world. In Kenya, and indeed most parts of the world, we have been adopters of IAS 39 for well over 15 years. It is therefore no Another significant conflict area is in respect to tax surprise that the change is not immediately palatable. The treatment of expected credit loss provisions – under tax laws expected credit loss model for recognition and measurement in Kenya, provisions for impairment are only allowable for of impairment seeks to predict the future outcome of tax deductibility when specific conditions are met, which events, a concept that is perhaps a little alien to preparers usually happen long after losses have been incurred and of financial statements who are more used to the normal realized, let alone expected. Convergence in this area is a ‘looking back’ historical cost accounting approach. The necessity. need for considerable time and effort in understanding the parameters and probability factors in anticipating future In our experience, the financial institutions that have models, complexity around models that deal with this and successfully dealt with most of the challenges above are perhaps also unpreparedness by most financial institutions those that have embarked on this journey early, and have has made this a topic of discussion at virtually all banking had IFRS 9 prominently identified as a governance matter and financial sector forums. and not simply another “accounting issue”. The board needs to take charge of the significant judgements and estimates Whilst it is agreed that the expected credit loss model is a that are an essential part of the impairment provision new concept and one that accountants will find naturally calculation. difficult to deal with, it needs to be appreciated as a concept which is taking accounting for credit losses much closer Financial institutions locally and globally will be watching to the reality of the way in which financial institutions each other, and particularly the reported Q1 2018 results to evaluate, monitor and deal with credit risk. In brief, the benchmark their own IFRS 9 based provisions against the accounting requirement seeks to reflect the thought process competition and industry as a whole. It is almost certain that any credit evaluation department would go through in that models will be re-looked at, refined and somewhat determining whether to lend money to a potential borrower. redefined over the next 12 – 24 months before the end result All credit departments will appreciate and seek to quantify of consistent reliable financial reporting is achieved. It is the risk of default of a borrower before lending, and IFRS my view that the institutions that will continue to provide 9 seeks to recognize that risk in the financial statements. leadership from the board will be more successful at refining Likewise, all credit departments continuously monitor the their models and processes to provide financial reporting performance of their loan books and evaluate changing risks outcomes that are realistic to their business and credit of default – once again IFRS 9 recognizes this reality and portfolios. requires a continuous accounting change depending on how risk of default changes.
10 BANKING SURVEY | 2018 BANKING SURVEY | 2018 11 BANKING INDUSTRY
Structure of Kenya’s Banking Industry The banking framework as at 31st December 2017 comprised The commercial banks are grouped into tiers as shown below. of 56 financial institutions. 43 of these are banking As per the weighting by the Central Bank of Kenya, we have institutions and thirteen are micro finance banks (MFB’s) grouped the microfinance banks in to Tiers namely: large, with the Central Bank of Kenya (CBK) as the regulatory medium and small. The Tiering is based on the weighted authority. Dubai Bank, Chase Bank and Imperial bank has composite index comprising assets, deposits, capital, number been placed under receivership. And Fidelity Commercial of deposit accounts and loan accounts. A microfinance bank Bank was acquired by the SBM Group while Mayfair, DIB is classified large if it has a market share of 5 percent and Bank were given new linsence to operate as a bank in Kenya. above; medium if it has a market share between 1 percent and 5 percent and small if its market share is less than 1 percent.
Tier 1 >Ksh 150B Tier II Ksh 50>
Commercial Bank of Africa Housing Finance Sidian Bank Credit Bank SMEP CFC Stanbic Bank Prime Bank First Community Bank M Oriental Bank Limited REMU Diamond Trust Ecobank Consolidated Bank Middle East Bank Small I&M Bank Bank of India Guardian Bank UBA Kenya Ltd SUMAC NIC Bank Habib A.G. Zurich DIB Bank Kenya CENTURY Mayfair Bank UWEZO U & I DARAJA CHOICE CARITAS
BANKING SURVEY | 2018 13 BANKING INDUSTRY RESULTS Q1 2018
Banking Industry Results 31st March 2018
Selected Industry Results at a Glance KSh Billions % Change 31-Mar-18 31-Mar-17 Total Assets 6.2% 4,016,639 3,780,562 Customer Deposits 8.1% 2,919,602 2,700,147 Loans & Advances to Customers 1.5% 2,206,583 2,174,902 Profit Before Tax 9.8% 37,642 34,294 Total Interest Income 6.8% 93,222 87,275 Total Non-Interest Income 6.8% 28,650 26,818 Operating Income 5.8% 88,857 83,955 Operating Expenses 7.3% 45,009 41,947
Overall Industry Results (Selected) Balance Sheet - KSh Billions % Change 31-Mar-18 31-Mar-17 Total Assets 6.2% 4,016,639 3,780,562 Customer Deposits 8.1% 2,919,602 2,700,147 Loans & Advances to Customers 1.5% 2,206,583 2,174,902 Investments in Government Securities 25.7% 1,083,642 862,141 Income - KSh Billions Banking Industry Results Q1 2018 Interest on Loans & Advances 2.4% 64,626 63,118 Total Interest Income 6.8% 93,222 87,275 Income from Fees & Commissions 5.5% 18,217 17,274 Total Non-Interest Income 6.8% 28,650 26,818 Operating Income 5.8% 88,857 83,955 Banking Total Income 7.0% 122,042 114,094 Expenses - KSh Billions Survey 2018 Total Interest Expense 9.5% 33,000 30,139 Operating Expenses 7.3% 45,009 41,947 Losses on Loans & Advances -17.1% 6,392 7,715 Total Expenses 8.2% 78,009 72,086 Profit Before Tax 9.8% 37,642 34,294 Disclosures - KSh Billions Loan Loss Provision 32.2% 105,588 79,880 NPL (Net) 30.3% 135,573 104,027 NPL (Gross) 29.4% 287,664 222,366 Total Insider Loans -0.5% 100,302 100,809 Core Capital (Bank) 4.1% 534,656 513,798 Quick Assets 15.1% 1,467,302 1,275,316 Total Risk Weighted Assets 4.2% 3,295,528 3,164,186
BANKING SURVEY | 2018 15 BANKING INDUSTRY RESULTS Q1 2018 BANKING INDUSTRY RESULTS Q1 2018
2.0 Balance Sheet Results (Selected) 2.20 Top Ten Banks - Customer Deposits (KSh Billions) 2.30 Top Ten Banks – Loans and Advances to Customers 3.0 Profit and Loss Account Results (Selected) 2.10 Top Ten Banks - Total Assets (KSh Billions) Bank 31-Mar-18 31-Mar-17 (KSh Billions) 3.10 Top Ten Banks - Total Income Bank 31-Mar-18 31-Mar-17 Kenya Commercial Bank 438,711 397,873 Bank 31-Mar-18 31-Mar-17 (KSh Billions) Kenya Commercial Bank 560,904 520,536 Equity Bank 301,623 288,007 Kenya Commercial Bank 383,875 362,922 KSh Billions 31-Mar-18 31-Mar-17 Equity Bank 402,182 393,864 Co-operative Bank of Kenya 294,064 278,719 Co-operative Bank of Kenya 251,219 245,289 Kenya Commercial Bank 18,190 16,190 Co-operative Bank of Kenya 393,426 376,018 Standard Chartered Bank 231,986 205,017 Equity Bank 206,863 208,357 Equity Bank 14,040 13,352 Standard Chartered Bank 293,307 274,007 Diamond Trust 196,864 179,946 Barclays Bank of Kenya 165,541 168,702 Co-operative Bank of Kenya 13,426 12,581 Barclays Bank of Kenya 291,293 260,429 Barclays Bank of Kenya 193,579 181,804 Diamond Trust 149,101 137,695 Barclays Bank of Kenya 9,008 8,598 Diamond Trust 277,055 248,863 Commercial Bank of Africa 179,492 145,502 Stanbic Bank 128,497 115,365 Standard Chartered Bank 8,815 8,286 Stanbic Bank 248,986 212,633 Stanbic Bank 147,769 130,558 I&M Bank 121,557 113,579 Stanbic Bank 7,344 5,666 Commercial Bank of Africa 226,545 202,700 NIC Bank 136,085 110,051 Standard Chartered Bank 113,848 116,875 Diamond Trust 7,295 6,701 I&M Bank 189,088 181,582 I&M Bank 135,084 134,885 NIC Bank 108,633 108,913 Commercial Bank of Africa 6,549 6,237 NIC Bank 187,061 166,305 Commercial Bank of Africa 98,789 98,729 I&M Bank 5,830 5,363 2.21 Top Ten Banks – Growth in Customer Deposits NIC Bank 5,247 4,831 2.11 Top Ten Banks – Growth in Assets (KSh Billions) (KSh Billions) 2.31 Top Ten Banks – Growth in Loans and Advances to Customers (KSh Billions) 3.11 Top Ten Banks – Growth in Total Income Bank 31-Mar-18 Bank 31-Mar-18 Bank 31-Mar-18 (KSh Billions) Victoria Commercial Bank 19.4% UBA Kenya Ltd 43.4% Victoria Commercial Bank 30.3% Bank 31-Mar-18 Stanbic Bank 17.1% NIC Bank 23.7% Credit Bank 29.0% Stanbic Bank 29.6% Bank of Baroda 15.3% Victoria Commercial Bank 23.5% Diamond Trust 8.3% Victoria Commercial Bank 22.4% Credit Bank 14.8% Commercial Bank of Africa 23.4% UBA Kenya Ltd 8.1% Gulf African Bank 16.3% Gulf African Bank 14.6% Bank of Baroda 18.3% Development Bank of Kenya 7.6% Credit Bank 15.2% Prime Bank 13.6% Credit Bank 17.7% I&M Bank 7.0% UBA Kenya Ltd 14.0% UBA Kenya Ltd 12.8% Gulf African Bank 17.5% Bank of Baroda 6.9% Bank of Baroda 12.5% Habib A.G. Zurich 12.5% Bank of India 15.9% Kenya Commercial Bank 5.8% Kenya Commercial Bank 12.4% NIC Bank 12.5% Stanbic Bank 13.2% Trans-National Bank 4.0% Citibank 11.7% Barclays Bank of Kenya 11.9% Standard Chartered Bank 13.2% ABC Bank 3.7% Bank of India 11.1% Prime Bank 10.4% 2.13 Total Assets (KSh Billions) 2.22 Customer Deposits (KSh Billions) 2.32 Loans and Advances to Customers (KSh Billions) 3.12 Total Income (KSh Billions)
Loans and Advances to Customers Total Assets Customer Deposits The industry registered reduced growth of 1.5% in loans & Total Income The industry recorded a drop in performance, registering The industry registered a growth of 8.1% in customer deposits advances as compared to 3.9% in 2017. Loans & advances The industry registered growth of 7% in total income as a growth of 6.2% in total assets as compared to 7.3% as compared to 8.0% in 2017. Customer deposits as at 31st as at 31st March 2018 stood at KSh 2.21tn compared to KSh compared to a reduction of 10.4% in 2017. Total income as 2.17tn in 2017. Tier III banks achieved the highest rate of at 31st March 2018 stood at KSh 122bn compared to KSh growth in 2017. Total assets as at 31st March 2018 stood March 2018 stood at KSh 2.9tn compared to KSh 2.7tn in growth at 7.9% followed by Tier I banks which recorded a 114bn in 2017. Tier I banks achieved the highest rate of at KSh 4tn compared to KSh 3.78tn in 2017. Tier I banks 2017. Tier I banks achieved the highest rate of growth at growth of 3.1%. Tier II and Tier IV banks both registered drops growth at 9% followed by Tier III banks which recorded a of 8.2% and 0.7% respectively in loans & advances as at 31st growth of 5.9%. Tier II banks did not register growth, while achieved the highest rate of growth at 8.2% followed 9.9% followed by Tier III banks which recorded a growth of March 2018 when compared to 2017. Tier IV banks registered a drop in income of 9.3% as at 31st by Tier III banks which recorded a growth of 5.8% and 9.3% and Tier IV banks 6.3%. Tier II banks also registered March 2018 when compared to 2017. Tier IV banks 3.9%. Tier II banks registered a decrease of a marginal increase of 0.2% in customer deposits as at 31st 1.7% in the value of their total assets as at 31st March March 2018 when compared to 2017. 2018 when compared to 2017.
16 BANKING SURVEY | 2018 BANKING SURVEY | 2018 17 BANKING INDUSTRY RESULTS Q1 2018 BANKING INDUSTRY RESULTS Q1 2018
3.20 Top Ten Banks – Loan Interest Income 3.30 Top Ten Banks – Fees & Commission Income 3.40 Top Ten Banks – Profit before Tax 4.0 Ratios (Selected)= Bank 31-Mar-18 31-Mar-17 Bank 31-Mar-18 31-Mar-17 Bank 31-Mar-18 31-Mar-17 Loan Interest Income / Total Income Kenya Commercial Bank 11,421 10,249 Equity Bank 3,550 3,619 Kenya Commercial Bank 7,436 6,234 % Change 31-Mar-18 31-Mar-17 Tier 1 -4.3% 52.8% 55.2% Co-operative Bank of Kenya 8,273 7,647 Kenya Commercial Bank 2,665 2,314 Equity Bank 6,696 5,865 Co-operative Bank of Kenya 4,627 4,399 Tier 11 -5.5% 49.4% 52.3% Equity Bank 6,166 6,072 Co-operative Bank of Kenya 2,221 2,318 Stanbic Bank 2,797 1,503 Tier 111 -0.8% 61.7% 62.2% Barclays Bank of Kenya 5,225 5,086 Commercial Bank of Africa 1,811 1,828 Barclays Bank of Kenya 2,576 2,375 Tier V -2.3% 63.0% 64.4% Diamond Trust 4,168 3,987 Standard Chartered Bank 1,202 980 Standard Chartered Bank 2,547 2,861 Industry Aggregate -4.3% 53.0% 55.3% Standard Chartered Bank 3,426 3,644 Barclays Bank of Kenya 1,200 1,284 Diamond Trust 2,172 1,912 Loan interest income/ total income percentage reduced by 4.3% I&M Bank 1,952 1,965 Stanbic Bank 3,332 2,903 Stanbic Bank 1,042 825 to 53% as at 31st March 2018 compared to 55.3% as at 31st Commercial Bank of Africa 1,606 2,006 I&M Bank 3,312 3,310 I&M Bank 795 531 March 2017. Tier III banks recorded the lowest reduction of 0.8% NIC Bank 1,352 1,337 followed by the Tier IV banks with 2.3%, Tier I banks 4.3% and NIC Bank 2,807 3,106 NIC Bank 516 503 Tier II banks which recorded the highest reduction of 5.5%. Commercial Bank of Africa 2,421 2,456 Diamond Trust 514 446 3.41 Top Ten Banks – Growth in Profit before Tax Fees & Commission Income / Total Income Bank 31-Mar-18 % Change 31-Mar-18 31-Mar-17 3.21 Top Ten Banks – Growth in Loan Interest Income 3.31 Top Ten Banks – Growth in Fees & Commission National Bank of Kenya 390.0% Tier 1 -2.9% 16.2% 16.7% Bank 31-Mar-18 Income Paramount Universal Bank 262.1% Tier 11 -3.1% 8.7% 9.0% Victoria Commercial Bank 27.3% UBA Kenya Ltd 100.0% Bank 31-Mar-18 Tier 111 13.4% 13.2% 11.6% Stanbic Bank 86.1% Citibank 26.1% Stanbic Bank 11.4% Tier V 11.8% 14.2% 12.7% Development Bank of Kenya 59.1% Credit Bank 16.7% M Oriental Commercial Bank 9.4% Industry Aggregate -1.4% 14.9% 15.1% GT Bank Kenya 57.2% Stanbic Bank 14.8% Diamond Trust 8.3% Sidian Bank 48.7% Fees & commission income/ total income percentage reduced by ABC Bank 13.0% UBA Kenya Ltd 8.1% Jamii Bora Bank 40.9% 1.4% to 14.9% as at 31st March 2018 compared to 15.1% as Sidian Bank 12.6% Development Bank of Kenya 7.6% Kenya Commercial Bank 19.3% at 31st March 2017. Tier III and Tier IV banks recorded increases of 13.4% and 11.8% respectively, while Tier I and Tier II banks Kenya Commercial Bank 11.4% I&M Bank 7.0% Bank of Baroda 17.6% registered reductions of 2.9% and 3.1% respectively. Gulf African Bank 10.8% Bank of Baroda 6.9% UBA Kenya Ltd 8.7% Kenya Commercial Bank 5.8% 3.42 PBT/ (Loss) before Tax Gross NPL / Loans & Advances Bank of Baroda 8.6% Trans-National Bank 4.0% % Change 31-Mar-18 31-Mar-17 Tier 1 40.1% 10.5% 7.5% ABC Bank 3.7% Tier 11 12.6% 23.9% 21.2% 3.22 Loan Interest Income Tier 111 14.1% 16.6% 14.6% 3.32 Fees & Commission Income Tier V 36.0% 23.0% 16.9% Industry Aggregate 27.5% 13.0% 10.2%
Gross NPL / loans & advances percentage rose by 27.5% to 13% as at 31st March 2018 compared to 10.2% as at 31st March 2017. Tier I banks registered the highest increase at 40.1%, followed by Tier IV banks with 36% and Tier III banks which increased their percentage by 14.1%. Tier II banks registered the lowest increase at 12.6%.
Loan Loss Provisions / Gross NPL PBT/ (Loss) before Tax % Change 31-Mar-18 31-Mar-17 The industry registered growth of 9.8% in PBT as compared Tier 1 -11.5% 38.6% 43.7% to a reduction of 12% in 2017. PBT as at 31st March 2018 Tier 11 43.3% 35.3% 24.7% Loan Interest Income increased by 2.4% to KSh 65bn as at 31st stood at KSh 38bn compared to KSh 34bn in 2017. Tier Tier 111 1.3% 24.9% 24.6% Tier V -3.5% 34.5% 35.7% March 2018 compared to KSh 63bn as at 31st March 2017. Tier II banks achieved the highest rate of growth at 24.1% Industry Aggregate 2.2% 36.7% 35.9% III banks recorded the highest rate of growth at 5.1% followed Fees & commission Income increased by 5.5% to KSh 18bn as at followed by Tier I banks which recorded a growth of 10.8%. by the Tier I banks with 4.3%, Tier II and Tier IV banks both 31st March 2018 compared to KSh 17bn as at 31st March 2017. Tier Tier III banks registered a drop in PBT of 18.4% while Tier IV Loan loss provisions / Gross NPL percentage rose by 2.2% to 36.7% as at 31st March 2018 compared to 35.9% as at 31st March 2017. banks increased the overall loss to KSh 713million as at 31st registered drops of 5.5% and 11.3% respectively in loan interest III banks recorded the highest rate of growth at 20.1% followed by Tier II banks registered the highest increase at 43.3%, followed income as at 31st March 2018 when compared to 2017. the Tier I banks with 5.9% and Tier IV banks with 1.4% growth. March 2018 from KSh 129million in 2017. by Tier III banks with 1.3%. Tier I and Tier IV banks registered decreases of 11.5% and 3.5% respectively. Tier II banks registered a drop of 3.1% in fees & commission income as at 31st March 2018 when compared to 2017.
18 BANKING SURVEY | 2018 BANKING SURVEY | 2018 19 BANKING INDUSTRY RESULTS Q1 2018 BANKING INDUSTRY RESULTS Q1 2018
4.10 Loan Interest Income / Total Income 4.11 Fees & Commission Income / Total Income 4.12 Loan Loss Provision / Gross Non-Performing Loans & Advances 4.13 Gross Non-Performing Loans / Loans & Advances to Customers % Change 31-Mar-18 31-Mar-17 % Change 31-Mar-18 31-Mar-17 % Change 31-Mar-18 31-Mar-17 % Change 31-Mar-18 31-Mar-17 Tier 1 >KSh 150B Tier 1 >KSh 150B Tier 1 >KSh 150B Tier 1 >KSh 150B Kenya Commercial Bank -0.8% 62.8% 63.3% Kenya Commercial Bank 2.5% 14.7% 14.3% Kenya Commercial Bank -23.5% 46.7% 61.1% Kenya Commercial Bank 29.6% 10.7% 8.2% Equity Bank -3.4% 43.9% 45.5% Equity Bank -6.7% 25.3% 27.1% Equity Bank -10.4% 33.0% 36.8% Equity Bank -4.6% 7.0% 7.4% Co-operative Bank of Kenya 1.4% 61.6% 60.8% Co-operative Bank of Kenya -10.2% 16.5% 18.4% Co-operative Bank of Kenya -11.6% 27.8% 31.4% Co-operative Bank of Kenya 146.1% 11.3% 4.6% Standard Chartered Bank -11.6% 38.9% 44.0% Standard Chartered Bank 15.2% 13.6% 11.8% Standard Chartered Bank 17.3% 39.0% 33.3% Standard Chartered Bank 18.9% 15.6% 13.1% Barclays Bank of Kenya -1.9% 58.0% 59.1% Barclays Bank of Kenya -10.8% 13.3% 14.9% Barclays Bank of Kenya -1.4% 45.3% 45.9% Barclays Bank of Kenya 9.9% 7.6% 6.9% Diamond Trust -4.0% 57.1% 59.5% Diamond Trust 5.8% 7.0% 6.7% Diamond Trust -23.9% 56.0% 73.6% Diamond Trust 96.4% 8.6% 4.4% Stanbic Bank -11.4% 45.4% 51.2% Stanbic Bank -2.6% 14.2% 14.6% Stanbic Bank 35.3% 31.9% 23.6% Stanbic Bank 32.3% 8.1% 6.1% Commercial Bank of Africa -6.1% 37.0% 39.4% Commercial Bank of Africa -5.7% 27.6% 29.3% Commercial Bank of Africa 10.5% 53.4% 48.4% Commercial Bank of Africa 9.9% 9.2% 8.4% NIC Bank -8.0% 56.8% 61.7% NIC Bank 37.7% 13.6% 9.9% NIC Bank -28.3% 22.7% 31.7% NIC Bank 129.8% 16.7% 7.3% I&M Bank -16.8% 53.5% 64.3% I&M Bank -5.5% 9.8% 10.4% I&M Bank 13.6% 39.0% 34.3% I&M Bank 18.1% 14.1% 11.9% Aggregate -4.3% 52.8% 55.2% Aggregate -2.9% 16.2% 16.7% Aggregate -11.5% 38.6% 43.7% Aggregate 40.1% 10.5% 7.5% Tier II KSh 50> 20 BANKING SURVEY | 2018 BANKING SURVEY | 2018 21 BANKING INDUSTRY RESULTS Q1 2018 BANKING INDUSTRY RESULTS Q1 2018 4.14 Insider Loans / Loans and Advances to Customers 4.15 Insider Loans / Core Capital 5.10 Total Assets (KSh Billions) 5.11 Customer Deposits (KSh Billions) % Change 31-Mar-18 31-Mar-17 % Change 31-Mar-18 31-Mar-17 % Change 31-Mar-18 31-Mar-17 % Change 31-Mar-18 31-Mar-17 Tier 1 >KSh 150B Tier 1 >KSh 150B Tier 1 >KSh 150B Tier 1 >KSh 150B Kenya Commercial Bank -17.3% 3.3% 4.0% Kenya Commercial Bank -25.1% 17.1% 22.9% Kenya Commercial Bank 7.8% 560,904 520,536 Kenya Commercial Bank 10.3% 438,711 397,873 Equity Bank 5.2% 3.9% 3.7% Equity Bank 0.8% 14.7% 14.6% Equity Bank 2.1% 402,182 393,864 Equity Bank 4.7% 301,623 288,007 Co-operative Bank of Kenya -4.2% 3.8% 4.0% Co-operative Bank of Kenya -7.1% 17.0% 18.3% Co-operative Bank of Kenya 4.6% 393,426 376,018 Co-operative Bank of Kenya 5.5% 294,064 278,719 Standard Chartered Bank -0.9% 5.4% 5.4% Standard Chartered Bank 3.0% 18.0% 17.5% Standard Chartered Bank 7.0% 293,307 274,007 Standard Chartered Bank 13.2% 231,986 205,017 Barclays Bank of Kenya -10.8% 6.8% 7.6% Barclays Bank of Kenya -11.3% 29.7% 33.5% Barclays Bank of Kenya 11.9% 291,293 260,429 Diamond Trust 9.4% 196,864 179,946 Diamond Trust -32.9% 2.7% 4.0% Diamond Trust -38.7% 11.0% 18.0% Diamond Trust 11.3% 277,055 248,863 Barclays Bank of Kenya 6.5% 193,579 181,804 Stanbic Bank 35.8% 5.5% 4.0% Stanbic Bank 41.1% 22.5% 16.0% Stanbic Bank 17.1% 248,986 212,633 Commercial Bank of Africa 23.4% 179,492 145,502 Commercial Bank of Africa 15.7% 7.5% 6.5% Commercial Bank of Africa 6.4% 35.4% 33.3% Commercial Bank of Africa 11.8% 226,545 202,700 Stanbic Bank 13.2% 147,769 130,558 NIC Bank 46.4% 4.0% 2.8% NIC Bank 31.0% 16.1% 12.3% I&M Bank 4.1% 189,088 181,582 NIC Bank 23.7% 136,085 110,051 I&M Bank 29.3% 3.0% 2.3% I&M Bank 33.7% 12.9% 9.7% NIC Bank 12.5% 187,061 166,305 I&M Bank 0.1% 135,084 134,885 Aggregate -1.8% 4.3% 4.4% Aggregate -5.4% 18.5% 19.6% 8.2% 3,069,846 2,836,936 9.9% 2,255,257 2,052,362 Tier II KSh 50> 22 BANKING SURVEY | 2018 BANKING SURVEY | 2018 23 BANKING INDUSTRY RESULTS Q1 2018 BANKING INDUSTRY RESULTS Q1 2018 5.12 Loans and Advances to Customers (KSh Billions) 5.20 Profit / (Loss) before Tax (KSh Billions) 5.12 Loans and Advances to Customers (KSh Billions) 5.20 Profit / (Loss) before Tax (KSh Billions) % Change 31-Mar-18 31-Mar-17 % Change 31-Mar-18 31-Mar-17 % Change 31-Mar-18 31-Mar-17 % Change 31-Mar-18 31-Mar-17 Tier 1 >KSh 150B Tier 1 >KSh 150B Tier 1 >KSh 150B Tier 1 >KSh 150B Kenya Commercial Bank 5.8% 383,875 362,922 Kenya Commercial Bank 19.3% 7,436 6,234 Kenya Commercial Bank 5.8% 383,875 362,922 Kenya Commercial Bank 19.3% 7,436 6,234 Co-operative Bank of Kenya 2.4% 251,219 245,289 Equity Bank 14.2% 6,696 5,865 Co-operative Bank of Kenya 2.4% 251,219 245,289 Equity Bank 14.2% 6,696 5,865 Equity Bank -0.7% 206,863 208,357 Co-operative Bank of Kenya 5.2% 4,627 4,399 Equity Bank -0.7% 206,863 208,357 Co-operative Bank of Kenya 5.2% 4,627 4,399 Barclays Bank of Kenya -1.9% 165,541 168,702 Stanbic Bank 86.1% 2,797 1,503 Barclays Bank of Kenya -1.9% 165,541 168,702 Stanbic Bank 86.1% 2,797 1,503 Diamond Trust 8.3% 149,101 137,695 Barclays Bank of Kenya 8.5% 2,576 2,375 Diamond Trust 8.3% 149,101 137,695 Barclays Bank of Kenya 8.5% 2,576 2,375 Stanbic Bank 11.4% 128,497 115,365 Standard Chartered Bank -11.0% 2,547 2,861 Stanbic Bank 11.4% 128,497 115,365 Standard Chartered Bank -11.0% 2,547 2,861 I&M Bank 7.0% 121,557 113,579 Diamond Trust 13.6% 2,172 1,912 I&M Bank 7.0% 121,557 113,579 Diamond Trust 13.6% 2,172 1,912 Standard Chartered Bank -2.6% 113,848 116,875 I&M Bank -0.7% 1,952 1,965 Standard Chartered Bank -2.6% 113,848 116,875 I&M Bank -0.7% 1,952 1,965 NIC Bank -0.3% 108,633 108,913 Commercial Bank of Africa -19.9% 1,606 2,006 NIC Bank -0.3% 108,633 108,913 Commercial Bank of Africa -19.9% 1,606 2,006 Commercial Bank of Africa 0.1% 98,789 98,729 NIC Bank 1.1% 1,352 1,337 Commercial Bank of Africa 0.1% 98,789 98,729 NIC Bank 1.1% 1,352 1,337 3.1% 1,727,922 1,676,426 10.8% 33,758 30,455 3.1% 1,727,922 1,676,426 10.8% 33,758 30,455 Tier II KSh 50> 24 BANKING SURVEY | 2018 BANKING SURVEY | 2018 25 BANKING INDUSTRY RESULTS Q1 2018 BANKING INDUSTRY RESULTS Q1 2018 5.21 Total Income (KSh Billions) 5.22 Loan Interest Income 5.23 Fees & Commission Income (KSh Billions) 5.30 Gross Non-Performing Loans and Advances to Customers % Change 31-Mar-18 31-Mar-17 KSh Billions % Change 31-Mar-18 31-Mar-17 % Change 31-Mar-18 31-Mar-17 (KSh Billions) Tier 1 >KSh 150B Tier 1 >KSh 150B Tier 1 >KSh 150B % Change 31-Mar-18 31-Mar-17 Kenya Commercial Bank 12.4% 18,190 16,190 Kenya Commercial Bank 11.4% 11,421 10,249 Equity Bank -1.9% 3,550 3,619 Tier 1 >KSh 150B Equity Bank 5.2% 14,040 13,352 Co-operative Bank of Kenya 8.2% 8,273 7,647 Kenya Commercial Bank 15.2% 2,665 2,314 Kenya Commercial Bank 37.1% 40,894 29,830 Co-operative Bank of Kenya 6.7% 13,426 12,581 Equity Bank 1.5% 6,166 6,072 Co-operative Bank of Kenya -4.2% 2,221 2,318 Co-operative Bank of Kenya 152.0% 28,316 11,235 Barclays Bank of Kenya 4.8% 9,008 8,598 Barclays Bank of Kenya 2.7% 5,225 5,086 Commercial Bank of Africa -0.9% 1,811 1,828 NIC Bank 145.9% 20,266 8,240 Standard Chartered Bank 6.4% 8,815 8,286 Diamond Trust 4.5% 4,168 3,987 Standard Chartered Bank 22.6% 1,202 980 Standard Chartered Bank 15.8% 17,793 15,367 Stanbic Bank 29.6% 7,344 5,666 Standard Chartered Bank -6.0% 3,426 3,644 Barclays Bank of Kenya -6.6% 1,200 1,284 I&M Bank 17.8% 15,270 12,963 Diamond Trust 8.9% 7,295 6,701 Stanbic Bank 14.8% 3,332 2,903 Stanbic Bank 26.2% 1,042 825 Equity Bank -5.3% 14,549 15,355 Commercial Bank of Africa 5.0% 6,549 6,237 I&M Bank 0.1% 3,312 3,310 I&M Bank 49.7% 795 531 Diamond Trust 112.7% 12,760 6,000 I&M Bank 8.7% 5,830 5,363 NIC Bank -9.6% 2,807 3,106 NIC Bank 2.6% 516 503 Barclays Bank of Kenya 7.8% 12,629 11,713 NIC Bank 8.6% 5,247 4,831 Commercial Bank of Africa -1.4% 2,421 2,456 Diamond Trust 15.1% 514 446 Stanbic Bank 47.3% 10,392 7,054 9.0% 95,743 87,805 4.3% 50,551 48,460 5.9% 15,513 14,647 Commercial Bank of Africa 10.0% 9,079 8,257 Tier II KSh 50> 26 BANKING SURVEY | 2018 BANKING SURVEY | 2018 27 BANKING INDUSTRY RESULTS Q1 2018 BANKING INDUSTRY RESULTS Q1 2018 5.31 Loan Loss Provisions (KSh Billions) 5.32 Total Insider Loans (KSh Billions) 5.33 Core Capital (KSh Billions) % Change 31-Mar-18 31-Mar-17 % Change 31-Mar-18 31-Mar-17 % Change 31-Mar-18 31-Mar-17 Tier 1 >KSh 150B Tier 1 >KSh 150B Tier 1 >KSh 150B Kenya Commercial Bank 4.9% 19,108 18,221 Kenya Commercial Bank -12.5% 12,710 14,524 Kenya Commercial Bank 16.9% 74,255 63,529 Co-operative Bank of Kenya 122.9% 7,861 3,527 Barclays Bank of Kenya -12.5% 11,276 12,886 Co-operative Bank of Kenya 5.7% 56,533 53,500 Diamond Trust 61.8% 7,146 4,416 Co-operative Bank of Kenya -1.8% 9,598 9,779 Equity Bank 3.6% 55,227 53,301 Standard Chartered Bank 35.8% 6,946 5,116 Equity Bank 4.5% 8,131 7,782 Barclays Bank of Kenya -1.3% 37,929 38,447 I&M Bank 33.8% 5,955 4,451 Commercial Bank of Africa 15.8% 7,413 6,401 Diamond Trust 18.5% 35,960 30,345 Barclays Bank of Kenya 6.3% 5,718 5,377 Stanbic Bank 51.3% 7,016 4,638 Standard Chartered Bank -6.2% 34,100 36,366 Commercial Bank of Africa 21.5% 4,851 3,994 Standard Chartered Bank -3.5% 6,129 6,348 Stanbic Bank 7.2% 31,128 29,045 Equity Bank -15.1% 4,796 5,648 NIC Bank 56.7% 4,908 3,132 NIC Bank 19.7% 30,438 25,438 NIC Bank 76.2% 4,599 2,610 Diamond Trust -27.3% 3,968 5,461 I&M Bank -3.5% 24,950 25,848 Stanbic Bank 99.3% 3,314 1,663 I&M Bank 29.0% 3,219 2,495 Commercial Bank of Africa 8.9% 20,932 19,228 Aggregate 27.8% 70,293 55,022 Aggregate 1.3% 74,368 73,446 Aggregate 7.0% 401,452 375,047 Tier II KSh 50> 28 BANKING SURVEY | 2018 BANKING SURVEY | 2018 29 RESULTS AND ANALYSIS 2013 - 2017 BANKING SECTOR RESULTS AND ANALYSIS 2013 - 2017 Banking Industry Results 31st December 2017 % Selected Industry Results at a Glance Balance Sheet - KSh Billions Change 2017 2016 % Change 2017 2016 Total Assets 9.0% 4,003 3,674 Total Assets 9.0% 4,003 3,674 Customer Deposits 11.5% 2,896 2,598 Customer Deposits 11.5% 2,896 2,598 Loans & Advances to Customers 4.4% 2,266 2,170 Loans & Advances to Customers 4.4% 2,266 2,170 Investments in Government Securities 17.0% 1,003 857 Profit Before Tax -7.7% 133 144 Income - KSh Billions BANKING SECTOR Total Income -3.1% 486 502 Interest on Loans & Advances -11.6% 265 299 Total Interest Income -5.8% 374 397 Total Interest Income -5.8% 374 397 Total Non-Interest Income 7.0% 113 105 Income from Fees & Commissions 9.5% 71 65 RESULTS AND ANALYSIS 2013 - 2017 Operating Income -2.5% 358 367 Total Non-Interest Income 7.0% 113 105 Operating Expenses 3.0% 183 178 Operating Income -2.5% 358 367 Total Income -3.1% 486 502 Selected Industry Results at a Glance Expenses - KSh Billions § The overall industry performance for 2017 has improved from Total Interest Expense -4.9% 128 135 that in 2016 with Total Assets and Customer Deposits increasing Total Expenses -0.4% 311 313 Banking by 9% (2016: 1.6%) and 11.5% (2016: 1.5%) respectively. Operating Expenses 3.0% 183 178 Operating Income decreased by 2.5% in 2017 (10.8% up in Losses on Loans & Advances -7.1% 42 45 Survey 2016), PBT also decreased by 7.7% (10.9% up in 2016) Profit Before Tax -7.7% 133 144 2018 § Investments in Government Securities increased by 17% in 2017 Disclosures - KSh Billions (24% up in 2016) from KSh 857bn in 2016 to KSh 1tn in 2017. Loan Loss Provision 26.3% 146 115 This may be attributed to the banks’ reducing their lending Gross Non - Performing Loans & Advances 21.8% 265 218 to retail and corporate customers in favour of what they Total Insider Loans -1.8% 99 101 deem to be a safer investment in government securities Core Capital (Bank) 9.6% 548 500 § Industry Losses on Loans & Advances decreased by 7.1% which is Quick Assets 17.2% 1,396 1,191 Total Risk Weighted Assets 8.6% 3,326 3,061 a significant improvement from the increase of 22.7% registered in 2016. This positive trend can be seen in the industry’s Loan Loss Provisions which increased by 26.3% in 2017, compared to the 40.9% in 2016 § Gross NPL have increased to KSh 265bn in 2017 from KSh 218bn in 2016, representing a 21.8% rise which is lower than the 31.6% recorded in 2016 § Industry Insider Loans have reduced from KSh 101bn in 2016 to KSh 99bn in 2017. This may be as a result of the CBK’s continued tightening of regulation after the events of 2015 and 2016 that saw a number of banks placed under receivership Overall Industry Results (Selected) 30 BANKING SURVEY | 2018 BANKING SURVEY | 2018 31 RESULTS AND ANALYSIS 2013 - 2017 RESULTS AND ANALYSIS 2013 - 2017 Growth in Loans and Advances to Customers Profit before Tax The rate of growth in Loans & Advances has also been Industry PBT has been rising steadily, from KSh 118bn in 2013 to the current KSh 133bn in 2017 representing an overall increase Overall Industry Growth Results (Selected) on a steady decline over the past four years, dropping drastically Five Year Trends 2013 – 2017 (Selected Results) to 4.4% in 2016 from 16.5% in 2015 and 22.8% registered in in profit of 13% 2014. The growth rate for 2017 has remained at 4.4% Growth (Selected) Total Customer Loans & Total PBT Balance Sheet Results 2013 – 2017 (Selected) Growth in Profit before Tax Assets Deposits Advances Income Total Assets Kenya Commercial Bank 10.1% 13.9% 9.6% 3.3% -3.5% Equity Bank 7.0% 7.7% 0.3% -3.6% 1.4% Co-operative Bank of Kenya 9.4% 10.1% 6.8% -2.9% -8.4% Standard Chartered Bank 13.9% 15.0% 2.9% 1.6% -25.5% Barclays Bank of Kenya 4.7% 4.4% -0.1% -4.9% -4.2% Customer Deposits Diamond Trust 10.6% 12.3% 8.7% 3.3% -7.3% Total industry Customer Deposits have increased by 58.2% Growth in Profit before Tax from KSh 1.83tn in 2013 to KSh 2.9tn in 2017 Growth in PBT has fluctuated over the past four years however, Stanbic Bank 16.8% 25.4% 12.9% 0.7% -22.1% registering a drastic drop in 2015 to -0.8% from 14% for 2014, Commercial Bank of Africa 8.8% 12.0% 1.1% -2.9% -5.3% before recording an considerable improvement to 8.2% in 2016 NIC Bank 19.1% 25.3% 4.9% -1.8% -4.2% Total Assets followed by a steep dip to -7.7% in the current year 2017 I&M Bank 12.1% 13.5% 13.2% 0.1% -13.1% Total Assets which have for the first time crossed the Total Income Tier I Aggregate 10.5% 12.8% 6.1% -0.7% -7.6% KSh 4tn mark, increased by 56.4% from KSh 2.56tn in National Bank of Kenya -1.8% 0.7% -4.8% -17.1% 1159.1% 2013 to KSh 4tn in 2017. Citibank -4.9% 3.0% 35.5% 4.5% 5.6% The rate of growth in Customer Deposits has declined steadily Bank of Baroda 16.0% 12.5% 16.0% 12.7% 30.4% over the past four years, dropping drastically to 5.4% in 2016 from 14.9% in 2015 and 17.2% registered in 2014. The growth rate for Prime Bank 17.0% 16.7% -1.4% -2.2% -15.4% 2017 has improved significantly to 11.5% Family Bank -0.5% 14.4% -13.3% -30.2% -316.5% Total Income HF Bank -8.8% -3.3% -8.9% -17.3% -72.8% Total Income for the industry has risen 43% from KSh 358bn in 2013 to the current KSh 486bn in 2017 Bank of India 18.4% 17.1% 7.2% 17.4% 22.4% Bank of Africa -3.2% -8.4% -13.2% -28.9% 310.6% Growth in Total Income Ecobank 13.4% 35.5% -33.1% 23.4% 50.4% Growth in Total Assets Tier II Aggregate 3.7% 8.3% -3.0% -9.0% 5.7% The rate of growth in Total Assets has been on a steady Gulf African Bank 15.3% 19.9% 19.7% 9.5% -66.3% decline over the past four years, dropping drastically to Kenya Government Securities GT Bank Kenya -6.7% -8.6% 2.3% -18.3% -63.4% The banks’ investments in Kenya Government Securities has 6% in 2016 from 15.3% in 2015 and 17.5% registered Victoria Commercial Bank 16.0% 19.0% 23.4% 7.3% 6.6% been rising steadily, from KSh 541bn in 2013 to the current KSh in 2014. The growth rate for 2017 has improved to 9%. 1tn in 2017, representing an increase in investments of 85.4% ABC Bank 10.6% 22.5% 8.1% -5.8% -8.7% Interest on Loans and Advances Sidian Bank -7.5% -6.8% -15.9% -27.7% -1127.4% Loans and Advances to Customers Growth in Investments in Kenya Government Securities Loan Interest Income for the industry has risen 35% from KSh Habib A.G. Zurich 9.8% 6.4% 4.8% -6.2% -34.2% 195bn in 2013 to the current KSh 265bn in 2017 First Community Bank 16.0% 16.7% -11.1% -10.9% 619.9% Growth in Loan Interest Income Development Bank of Kenya -0.6% 8.0% 5.3% -15.9% -39.6% Guardian Bank 7.5% 6.5% 7.2% -18.1% -24.7% Tier III Aggregate 6.3% 10.1% 5.9% -10.0% -47.5% Credit Bank 18.5% 19.8% 22.8% 4.3% 13.3% Consolidated Bank -3.3% -8.9% -8.1% -12.4% -58.3% Jamii Bora Bank -18.3% -33.5% -11.2% -40.5% -55.2% Growth in Investments in Kenya Government Securities Loans and Advances to Customers SBM Bank (Fidelity) 18.6% -43.7% -9.7% -52.9% 84.1% Growth in Govt Investments has fluctuated over the past four Growth in Loan Interest Income Total Loans for the industry have increased by 56% Growth in Loan Interest Income has been steadily declining, from Spire Bank -19.2% -20.2% -29.5% -26.0% -62.8% years, registering a sharp drop in 2015 to 8.1% from a high of 17% in 2014 and 2015, before registering a sharp drop to 5% from KSh 1.45tn in 2013 to KSh 2.27tn in 2017. 17.4% for 2014, before recording a marked increase to 24.8% in M Oriental Commercial Bank 6.6% 7.6% 9.5% 3.5% 225.8% 2016 and a drop to 17% for the current year 2017 for 2016 and a drastic contraction of -12% in the current year Trans-National Bank -1.6% -1.6% 2.6% -14.3% -66.0% 2017 Growth in Loans and Advances to Customers Paramount Universal Bank 1.2% 0.8% 1.8% -18.4% -8.3% Profit & Loss Account Results 2013 – 2017 (Selected) Profit before Tax Fees and Commission Income UBA Kenya Ltd 16.1% 53.7% 6.9% -4.3% -72.3% Middle East Bank -2.1% -2.2% -23.4% -19.9% 59.0% Mayfair Bank - - - - - DIB Bank - - - - - Tier IV Aggregate 5.3% -1.5% -2.9% -19.3% 7.2% Industry Aggregate 9.0% 11.5% 4.4% -3.1% -7.7% 32 BANKING SURVEY | 2018 BANKING SURVEY | 2018 33 RESULTS AND ANALYSIS 2013 - 2017 RESULTS AND ANALYSIS 2013 - 2017 2.0 Balance Sheet Results (Selected) Fees and Commission Income The banking industry recorded improved performance, increasing Customer Deposits Fees and Commission Income for the industry has risen 37% total assets by 9% from KSh 3.67tn in 2016 to KSh 4tn in 2017. KSh Billions % 2017 2016 2015 2014 2013 Tier I Banks registered the highest increase of 10.5%, followed by from KSh 52bn in 2013 to the current KSh 71bn in 2017 2.10 Top Ten Banks - Total Assets Tier I 12.8% 2,209 1,959 1,777 1,514 1,307 KSh Billions 2017 2016 2015 2014 2013 Tier III Banks which increased their overall assets by 6.3%. Tier IV Tier II 8.3% 480 444 580 558 350 Tier III 10.1% 139 126 122 117 103 Kenya Commercial Bank 555,630 504,775 467,741 376,969 323,312 Banks came in third with an increase in overall assets of 5.3%, while Growth in Fees and Commission Income Tier IV -1.5% 68 69 79 86 71 Equity Bank 406,402 379,749 341,329 276,116 238,194 Tier II Banks increased their assets by 3.7% Industry Total 11.5% 2,896 2,598 2,559 2,275 1,831 Co-operative Bank of Kenya 382,830 349,998 339,550 282,689 228,874 Standard Chartered Bank 285,125 250,274 234,131 222,636 220,524 The banking industry recorded improved performance, Barclays Bank of Kenya 271,682 259,498 241,153 226,118 207,010 2.20 Top Ten Banks - Customer Deposits increasing customer deposits by 11.5% from KSh 2.6tn in 2016 to Diamond Trust 270,082 244,124 190,948 141,176 114,136 KSh Billions 2017 2016 2015 2014 2013 KSh 2.9tn in 2017. Tier I Banks registered the highest increase Stanbic Bank 239,408 204,895 198,578 171,347 170,726 Kenya Commercial Bank 440,164 386,611 347,702 276,750 237,213 Commercial Bank of Africa 229,525 210,877 198,484 175,809 124,882 Equity Bank 298,703 277,275 236,610 202,485 158,527 of 12.8%, followed by Tier III Banks which increased their NIC Bank 192,817 161,847 156,762 137,087 112,917 Co-operative Bank of Kenya 285,566 259,472 263,709 216,174 174,776 customer deposits by 10.1%. Tier II Banks also increased their Growth in Fees and Commission Income has been steadily I&M Bank 183,953 164,116 147,846 137,299 110,316 Standard Chartered Bank 213,349 185,598 172,036 154,067 154,720 deposits by 8.3%, while Tier IV Banks however registered an Diamond Trust 190,469 169,600 126,229 101,594 84,672 declining, from 17% in 2014 to 13% in 2015, before registering KCB has the highest asset base with KSh 556bn in total assets, followed overall decrease in deposits of 1.5% Barclays Bank of Kenya 186,245 178,448 165,359 164,779 151,122 a sharp drop to -5% for 2016 and an increase to 9 % in the by Equity with KSh 406bn and CO-OP which comes in third with KSh Commercial Bank of Africa 178,378 159,284 148,537 122,044 90,993 current year 2017 383bn in total assets Stanbic Bank 153,009 121,989 108,130 96,830 95,708 2.30 Top Ten Banks – Loans and Advances to 2.11 Top Ten Banks – Growth in Assets I&M Bank 132,801 116,979 103,741 86,621 74,594 Customers Disclosures 2013 - 2017( Selected) Bank 2017 NIC Bank 130,561 104,160 105,194 92,791 84,236 KShBillions 2017 2016 2015 2014 2013 NIC Bank 19.14% KCB has the most customer deposits with KSh 440bn, Gross Nonperforming Loans. KenyaCommercialBank 387,943 353,900 312,080 248,824 198,370 SBM Bank (Fidelity) 18.61% followed by Equity with KSh 299bn and CO-OP which comes Co-operativeBankofKenya 252,362 236,398 208,075 178,979 137,052 Credit Bank 18.55% in third with KSh 286bn in customer deposits EquityBank 214,485 213,806 225,037 187,976 152,029 Bank of India 18.44% BarclaysBankofKenya 168,397 168,510 145,379 125,423 118,362 Prime Bank 16.99% DiamondTrust 148,516 136,686 125,818 94,059 75,292 Stanbic Bank 16.84% 2.21 Top Ten Banks – Growth in Customer Deposits StanbicBank 130,536 115,587 101,576 88,347 69,133 UBA Kenya Ltd 16.13% Bank 2017 StandardCharteredBank 126,294 122,711 115,125 122,749 129,672 First Community Bank 16.03% UBA Kenya Ltd 53.71% I&MBank 120,657 106,586 102,188 89,866 73,370 NICBank 112,322 107,097 107,868 94,424 77,114 Victoria Commercial Bank 15.99% Ecobank 35.49% CommercialBankofAfrica 101,410 100,314 103,520 89,362 57,180 Bank of Baroda 15.95% Stanbic Bank 25.43% NIC Bank 25.35% Gross Non-Performing Loans KCB remains the biggest lender with KSh 388bn in loans ABC Bank 22.53% Gross Non-Performing Loans have risen three-fold, from KSh NIC Bank registered the highest rate of growth in total assets in 2017 & advances to customers, followed by CO-OP with KSh 252bn Gulf African Bank 19.85% 76bn in 2013 to the current KSh 265bn in 2017 at 19.14%, followed by SBM Bank which increased its asset base by Credit Bank 19.75% and Equity which comes in third with KSh 214bn 18.61% and Credit Bank came in a close third with a growth rate of Victoria Commercial Bank 18.99% Growth in Gross Non-Performing Loans 18.55% Bank of India 17.06% 2.31 Top Ten Banks – Growth in Loans and First Community Bank 16.74% Advances to Customers UBA Kenya registered the highest rate of growth in customer 2.12 Total Assets deposits in 2017 at 53.71%, followed by Ecobank which Bank 2017 Citibank 35.54% increased its deposits by 35.49% and Stanbic came in third Victoria Commercial Bank 23.39% with a growth rate of 25.43% Credit Bank 22.78% Gulf African Bank 19.71% Bank of Baroda 15.95% 2.22 Customer Deposits I&M Bank 13.20% Stanbic Bank 12.93% Kenya Commercial Bank 9.62% M Oriental Commercial Bank 9.49% Diamond Trust 8.65% Growth in Gross Non-Performing Loans Growth in Gross NPL has been on an overall decline over the past Citibank registered the highest rate of growth in loans & advances to customers in 2017 at 35.54%, followed by Victoria four years, rising to a high of 49% in 2016 from 44% in 2015 and Total Assets Bank which increased its loan portfolio by 23.39% and Credit 34% in 2014, before dropping to 22% in the current year 2017 KSh Billions % 2017 2016 2015 2014 2013 Bank came in third with a growth rate of 22.78% Tier I 10.5% 3,017 2,730 2,517 2,147 1,851 Tier II 3.7% 676 652 660 584 476 Tier III 6.3% 197 186 176 166 139 Tier IV 5.3% 112 106 114 109 94 Industry Total 9.0% 4,003 3,674 3,467 3,007 2,559 34 BANKING SURVEY | 2018 BANKING SURVEY | 2018 35 RESULTS AND ANALYSIS 2013 - 2017 RESULTS AND ANALYSIS 2013 - 2017 2.32 Loans and Advances to Customers Top Ten Banks – Growth in Profit before Tax 3.20 Top Ten Banks - Total Income Overall industry income decreased by 3.1% to KSh 486bn Bank 2017 in 2017 from KSh 502bn in 2016. All the tiers registered KSh Billions 2017 2016 2015 2014 2013 National Bank of Kenya 1159.10% reduction in overall income with Tier IV Banks recording the First Community Bank 619.89% Kenya Commercial Bank 73,830 71,439 63,761 57,074 47,373 highest drop in income of 19.3% followed by Tier III Banks Bank of Africa 310.56% Equity Bank 56,261 58,336 52,502 46,146 40,356 M Oriental Commercial Bank 225.82% Co-operative Bank of Kenya 52,188 53,738 47,593 39,449 33,361 with a 10% reduction. Tier II Banks recorded an overall drop Barclays Bank of Kenya 35,172 36,978 34,336 31,626 30,359 SBM Bank (Fidelity) 84.09% in income of 9.0% while Tier I Banks recorded the lowest Middle East Bank 59.02% Standard Chartered Bank 34,255 33,719 29,886 30,234 28,705 reduction of 0.7% Ecobank 50.36% Diamond Trust 28,799 27,881 20,652 16,377 14,085 Bank of Baroda 30.39% Commercial Bank of Africa 26,297 27,079 25,399 16,882 13,090 3.30 Top Ten Banks – Interest on Loans and Bank of India 22.41% Stanbic Bank 24,652 24,483 21,839 19,596 18,601 Credit Bank 13.32% I&M Bank 23,743 23,714 21,085 17,693 13,733 Advances NIC Bank 20,634 21,002 18,929 15,363 12,933 National Bank registered the highest rate of growth in KSh Billions 2017 2016 2015 2014 2013 KCB is the highest earner in 2017 with KSh 73.8bn in total Kenya Commercial Bank 46,157 46,485 41,040 31,928 28,311 PBT from KSh 59 million in 2016 to KSh 740 million in 2017, income, followed by Equity with KSh 56.3bn and CO-OP which Co-operative Bank of Kenya 31,724 33,261 29,846 24,670 20,045 followed by First Community Bank which increased its PBT from Equity Bank 24,976 35,176 32,941 27,586 24,811 Loans and Advances to Customers comes in third with KSh 52.2bn in total income a loss of KSh 42 million in 2016 to a profit of KSh 216 million in Barclays Bank of Kenya 21,259 20,617 18,840 16,707 14,850 KSh Billions % 2017 2016 2015 2014 2013 2017 Diamond Trust 16,834 17,406 15,264 11,958 9,963 Tier I 6.1% 1,763 1,662 1,547 1,320 1,088 Top Ten Banks – Growth in Total Income I&M Bank 15,057 15,722 14,461 11,627 9,324 Tier II -3.0% 328 338 460 396 238 Standard Chartered Bank 13,558 14,845 14,915 15,674 15,528 Tier III 5.9% 112 106 102 92 76 Profit before Tax Bank 2017 NIC Bank 12,203 14,213 12,907 10,380 8,592 Tier IV -2.9% 62 64 69 64 51 Ecobank 23.38% Stanbic Bank 12,062 12,106 10,486 8,508 7,533 Industry Total 4.4% 2,266 2,170 2,177 1,872 1453 Bank of India 17.41% Commercial Bank of Africa 10,038 11,438 11,240 8,098 5,712 Bank of Baroda 12.70% The industry as a whole registered an increase in loans Victoria Commercial Bank 7.31% KCB earned the highest interest on loans in 2017 with KSh Citibank 4.50% and advances to customers of 4.4% (2016: 0.4% reduction) 46.2bn, followed by CO-OP with KSh 31.7bn and Equity which Credit Bank 4.31% from KSh 2.17tn in 2016 from KSh 2.27tn in 2017. Tier I Banks M Oriental Commercial Bank 3.46% earned KSh 25bn recorded an overall increase of 6.1%, followed by Tier III Banks Kenya Commercial Bank 3.35% with an increase of 5.9% in loans & advances. Tier II and IV Diamond Trust 3.29% Top Six Banks – Growth in Interest on Loans and Standard Chartered Bank 1.59% Banks both registered overall reductions in loan portfolios of Advances 3.0% and 2.9% respectively. Ecobank registered the highest rate of growth in total Bank 2017 income in 2017 at 23.4%, followed by Bank of India which UBA Kenya Ltd 22.76% 3.0 Profit and Loss Account Results increased its income base by 17.4% and Bank of Baroda came in Bank of India 10.61% Victoria Commercial Bank 7.70% (Selected) third with a growth rate of 12.7% Citibank 5.22% Profit before Tax Bank of Baroda 4.78% Total Income 3.10 Top Ten Banks – Profit before Tax Barclays Bank of Kenya 3.11% KSh Billions % 2017 2016 2015 2014 2013 KSh Billions 2017 2016 2015 2014 2013 Tier I -7.6% 120.78 130.72 115.94 113.63 99.03 Only six banks registered growth in Loan Interest Income Kenya Commercial Bank 27,471 28,482 23,444 22,362 17,734 Tier II 5.7% 14.44 13.66 12.62 22.64 15.2 in 2017. UBA Kenya recorded the highest growth of 22.76%, Equity Bank 23,086 22,777 22,388 20,111 17,276 Tier III -47.5% 1.82 3.47 4.22 4.39 3.87 Co-operative Bank of Kenya 16,502 18,024 14,073 12,515 10,604 Tier IV -7.2% (3.86) (3.60) (0.55) (0.24) (0.18) followed by Bank of India with 10.61% growth and Victoria Barclays Bank of Kenya 10,005 10,440 12,073 12,293 11,921 Industry Total -7.7% 133 144 132 140 118 Commercial with 7.7% growth in loan interest income Standard Chartered Bank 9,510 12,764 8,974 14,300 13,315 Diamond Trust 8,227 8,876 7,055 6,306 5,534 Overall industry PBT declined by 7.7% to KSh 133bn in I&M Bank 7,515 8,650 8,367 7,749 5,962 Interest on Loans and Advances 2017 from KSh 144bn in 2016.Tier II Banks were the only banks Commercial Bank of Africa 7,189 7,593 6,234 4,522 4,463 Citibank 6,373 6,033 5,578 4,145 4,984 that registered an overall increase of 5.7% in Profit before Tax NIC Bank 5,676 5,926 6,260 6,081 5,221 in 2017. Tier II Banks were the only ones to have registered an overall increase in PBT of 5.7%, from KSh 13.7bn in 2016 to KSh KCB earned the highest profit before tax in 2017 of KSh 14.4bn in 2017. Tier III Banks registered the highest decline in 27.5bn, followed by Equity Bank with a PBT of KSh 23.1bn and PBT of 47.5% from KSh 3.47bn in 2016 to KSh 1.82bn in 2017, CO-OP which earned KSh 16.5bn followed by Tier I Banks which saw a reduction in PBT of 7.6% Total Income from KSh 130.7bn in 2016 to KSh 120.8 in 2017 while Tier IV KSh Billions % 2017 2016 2015 2014 2013 Banks saw an increase in overall loss of 7.2%. Tier I -0.7% 376 378 336 290 252 Tier II -9.0% 75 83 98 90 58 Tier III -10.0% 22 24 23 20 17 Tier IV -19.3% 13 17 16 15 13 Industry Total -3.1% 486 502 474 416 339 36 BANKING SURVEY | 2018 BANKING SURVEY | 2018 37 RESULTS AND ANALYSIS 2013 - 2017 RESULTS AND ANALYSIS 2013 - 2017 4.20 Loan Loss Provisions Interest on Loans and Advances Gross NPL (Tiers) KSh Billions % 2017 2016 2015 2014 2013 KSh Billions % 2017 2016 2015 2014 2013 Tier I 29.8% 159 122 86 62 49 Tier I -7.9% 204 221 202 167 145 Tier II 8.5% 71 66 49 27 15 Tier II -23.4% 39 51 58 56 31 Tier III 17.3% 18 15 12 7 5 Tier III -14.2% 14 16 15 12 11 Tier IV 18.5% 17 15 12 13 7 Tier IV -27.0% 8 11 11 10 9 Industry Total 21.8% 265 218 159 109 76 Industry Total -11.6% 265 299 286 245 195 § Tier I Banks registered the highest increase in Gross NPL of Overall industry interest income earned from loans and 29.8% from KSh 122bn in 2016 to KSh 159bn in 2017, followed advances decreased by 11.6% to KSh 265bn in 2017 from KSh by Tier IV Banks which recorded a 18.5% increase 299bn in 2016. All the tiers registered reduction in overall Tier IV Banks Fees and Commission Income interest income with recording the highest drop § Tier I Banks have the largest share of Gross NPL at 60% of 27% Tier II Banks KSh Billions % 2017 2016 2015 2014 2013 in loan interest income of followed by with the industry total, followed by Tier II Banks with 27%. a 23.4% reduction. Tier III Banks recorded an overall drop of Tier I 10.3% 60 54 55 49 42 Tier II 0.6% 7 7 11 10 6 Tier III Banks and Tier IV Banks contributed 6.8% and 6.5% 14.2% while Tier I Banks recorded the lowest reduction of 7.9% Tier III 9.7% 3 2 2 2 2 respectively to the total figure Industry loan loss provisions have been on steady rise Tier IV 17.6% 2 2 2 2 1 from KSh 32bn in 2013 to the current KSh 101bn in 2017 this Industry Total 9.5% 71 65 70 63 52 3.40 Top Ten Banks – Fees and Commission Top Ten Banks – Gross Non – Performing Loans represents an overall increase of 218% over the last five years. Income Overall industry income earned from fees and and Advances KSh Billions 2017 2016 2015 2014 2013 commissions increased by 9.5% to KSh 71bn in 2017 from KSh Loan Loss Provisions (Tiers) KSh Billions 2017 2016 2015 2014 2013 Equity Bank 14,684 12,250 12,740 12,416 9,717 65bn in 2016. Tier IV Banks recorded the highest increase in Kenya Commercial Bank 34,182 28,333 19,288 13,368 15,199 KSh Billions % 2017 2016 2015 2014 2013 Kenya Commercial Bank 10,692 9,091 8,862 8,504 7,182 fees and commissions income of 17.6% followed by Tier I National Bank of Kenya 27,658 29,987 11,762 7,237 4,212 Tier I 30.2% 66 50 33 26 21 Co-operative Bank of Kenya 8,635 8,818 8,648 8,083 6,830 Co-operative Bank of Kenya 18,714 11,273 8,189 7,982 6,103 Tier II 26.4% 25 20 13 9 5 Commercial Bank of Africa 7,153 6,789 6,789 2,682 1,862 Banks with a 10.3% rise. Tier III Banks registered an increase of I&M Bank 17,668 8,216 5,072 1,913 1,060 Tier III 23.0% 4 4 3 2 2 Barclays Bank of Kenya 4,822 5,278 6,650 6,364 6,520 9.7% Tier II Banks 0.6% while registered an overall increase of Barclays Bank of Kenya 17,620 15,038 14,697 10,752 3,848 Tier IV 11.6% 6 5 4 4 2 Standard Chartered Bank 3,775 3,905 3,908 3,815 3,800 Equity Bank 14,757 15,457 6,832 7,469 8,189 Industry Total 27.7% 101 79 53 41 30 Stanbic Bank 3,532 2,547 2,621 2,816 2,524 NIC Bank 13,265 12,650 13,193 5,969 5,083 I&M Bank 2,432 2,004 1,798 1,680 1,497 4.0 Disclosures (Selected) Standard Chartered Bank 12,615 11,472 5,192 6,137 3,580 § Tier I Banks registered the highest increase in Loan Loss NIC Bank 2,080 1,828 1,671 1,356 1,136 4.10 Gross Non – Performing Loans and Diamond Trust 11,901 5,520 3,655 1,199 1,012 Diamond Trust 1,902 1,615 1,418 1,214 1,111 Provisions of 30.2% from KSh 50bn in 2016 to KSh 66 bn in 2017, Advances (Gross NPL) Bank of Africa 10,571 10,794 9,744 2,412 1,342 followed by Tier II Banks which recorded a 26.4% increase Equity Bank fees and commission earned the highest KCB has the highest Gross NPL at KSh 34.2bn followed by 2017 KSh 14.7bn KCB KSh 10.7bn § Tier I Banks have the largest share of the Loan Loss Provisions income in of , followed by with NBK with KSh 27.7bn and CO-OP which earned KSh 8.6bn at 65% of the industry total, followed by Tier II Banks with Top Ten Banks – Growth in Gross Non – 25%. Tier III Banks and Tier IV Banks contributed 4% and 6% Top Ten Banks – Growth in Fees and respectively to the total figure Performing Loans and Advances Commission Income Bank 2017 5.0 Performance of the Banking Industry Bank 2017 Habib A.G. Zurich 275.65% Gulf African Bank 53.26% UBA Kenya Ltd 121.14% 5.10 Return on Average Assets (Tiers) Credit Bank 50.15% Diamond Trust 115.61% Stanbic Bank 38.63% I&M Bank 115.06% 2017 Industry gross non – performing loans and advances have been Victoria Commercial Bank 37.77% Citibank 114.17% Tier I 4.20% Trans-National Bank 26.33% on steady rise from KSh 81bn in 2013 to the current KSh 265bn Paramount Universal Bank 99.37% Tier II 2.17% M Oriental Commercial Bank 24.21% in 2017 this represents an overall increase of 228% for over Trans-National Bank 78.98% Tier III 0.91% I&M Bank 21.33% the last five years. Spire Bank 77.66% Consolidated Bank 19.90% Co-operative Bank of Kenya 66.00% Tier IV -3.27% Equity Bank 19.87% Gross NPL (Tiers) Bank of India 59.69% Industry Aggregate 3.50% Bank of India 18.79% Habib A.G. Zurich registered the highest growth in Gross Gulf African fees registered the highest rate of growth in NPL in 2017, followed by UBA Kenya and DTB § The banking industry recorded an overall ROAA of 3.50%. and commission income in 2017 at 53.26%, followed by Credit Tier I Banks had the highest rate of returns in 2017 of 4.20%, Bank which increased its income by 50.15% and Stanbic which followed by Tier II Banks which had a return of 2.17% and Tier increased its income by 38.63% III Banks a return of 0.91%. Tier IV Banks registered an overall negative return of 3.27% Fees and Commission Income 38 BANKING SURVEY | 2018 BANKING SURVEY | 2018 39 RESULTS AND ANALYSIS 2013 - 2017 RESULTS AND ANALYSIS 2013 - 2017 Top Ten Banks – Return on Average Assets (ROAA) 0.91% Bank 2017 Tier IV 6.0 Tables - Banking Industry Results 31st 6.11 Customer Deposits 6.12 Loans and Advances to Customers 6.20 Profit before Tax December 2017 (Selected) 6.10 Total Assets KSh Billions % 2017 2016 2015 2014 2013 KSh Billions % 2017 2016 2015 2014 2013 KShBillions % 2017 2016 2015 2014 2013 KSh Billions % 2017 2016 2015 2014 2013 Tier 1 >KSh 150B Tier 1 >KSh 150B Tier1>KSh150B Tier 1 >KSh 150B Kenya Commercial Bank 13.9% 440,164 386,611 347,702 276,750 237,213 Kenya Commercial Bank 9.6% 387,943 353,900 312,080 248,824 198,370 Kenya Commercial Bank -3.5% 27,471 28,482 23,444 22,362 17,734 Kenya Commercial Bank 10.1% 555,630 504,775 467,741 376,969 323,312 Equity Bank 7.7% 298,703 277,275 236,610 202,485 158,527 Equity Bank 0.3% 214,485 213,806 225,037 187,976 152,029 Equity Bank 1.4% 23,086 22,777 22,388 21,779 18,233 Equity Bank 7.0% 406,402 379,749 341,329 276,116 238,194 Co-operative Bank of Kenya 10.1% 285,566 259,472 263,709 216,174 174,776 Co-operative Bank of Kenya 6.8% 252,362 236,398 208,075 178,979 137,052 Co-operative Bank of Kenya -8.4% 16,502 18,024 14,073 12,515 10,604 Co-operative Bank of Kenya 9.4% 382,830 349,998 339,550 282,689 228,874 Standard Chartered Bank 15.0% 213,349 185,598 172,036 154,067 154,720 Standard Chartered Bank 2.9% 126,294 122,711 115,125 122,749 129,672 Standard Chartered Bank -25.5% 9,510 12,764 8,974 14,300 13,315 Standard Chartered Bank 13.9% 285,125 250,274 234,131 222,636 220,524 Barclays Bank of Kenya 4.4% 186,245 178,448 165,359 164,779 151,122 Barclays Bank of Kenya -0.1% 168,397 168,510 145,379 125,423 118,362 Barclays Bank of Kenya -4.2% 10,005 10,440 12,073 12,293 11,921 Barclays Bank of Kenya 4.7% 271,682 259,498 241,153 226,118 207,010 Diamond Trust 12.3% 190,469 169,600 126,229 101,594 84,672 Diamond Trust 8.7% 148,516 136,686 125,818 94,059 75,292 Diamond Trust -7.3% 8,227 8,876 7,055 6,306 5,534 Diamond Trust 10.6% 270,082 244,124 190,948 141,176 114,136 Stanbic Bank 25.4% 153,009 121,989 108,130 96,830 95,708 Stanbic Bank 12.9% 130,536 115,587 101,576 88,347 69,133 Stanbic Bank -22.1% 5,599 7,186 7,076 7,391 7,004 Stanbic Bank 16.8% 239,408 204,895 198,578 171,347 170,726 Commercial Bank of Africa 12.0% 178,378 159,284 148,537 122,044 90,993 Commercial Bank of Africa 1.1% 101,410 100,314 103,520 89,362 57,180 Commercial Bank of Africa -5.3% 7,189 7,593 6,234 4,522 4,463 Commercial Bank of Africa 8.8% 229,525 210,877 198,484 175,809 124,882 NIC Bank 25.3% 130,561 104,160 105,194 92,791 84,236 NIC Bank 4.9% 112,322 107,097 107,868 94,424 77,114 NIC Bank -4.2% 5,676 5,926 6,260 6,081 5,221 NIC Bank 19.1% 192,817 161,847 156,762 137,087 112,917 I&M Bank 13.5% 132,801 116,979 103,741 86,621 74,594 I&M Bank 13.2% 120,657 106,586 102,188 89,866 73,370 I&M Bank -13.1% 7,515 8,650 8,367 7,749 5,962 I&M Bank 12.1% 183,953 164,116 147,846 137,299 110,316 12.8% 2,209,245 1,959,415 1,777,246 1,514,134 1,306,561 6.1% 1,762,921 1,661,594 1,546,664 1,320,010 1,087,574 -7.6% 120,781 130,718 115,943 113,629 99,033 10.5% 3,017,453 2,730,153 2,516,522 2,147,246 1,850,891 Tier II KSh 50> 42 BANKING SURVEY | 2018 BANKING SURVEY | 2018 43 RESULTS AND ANALYSIS 2013 - 2017 RESULTS AND ANALYSIS 2013 - 2017 6.21 Total Income 6.22 Loan Interest Income 6.23 Fees and Commission Income 6.30 Gross Non – Performing Loans and Advances KSh Billions % 2017 2016 2015 2014 2013 KSh Billions % 2017 2016 2015 2014 2013 KSh Billions % 2017 2016 2015 2014 2013 Tier 1 >KSh 150B Tier 1 >KSh 150B Tier 1 >KSh 150B KSh Billions % 2017 2016 2015 2014 2013 Kenya Commercial Bank 17.6% 10,692 9,091 8,862 8,504 7,182 Kenya Commercial Bank 3.3% 73,830 71,439 63,761 57,074 47,373 Kenya Commercial Bank -0.7% 46,157 46,485 41,040 31,928 28,311 Tier 1 >KSh 150B Equity Bank 19.9% 14,684 12,250 12,740 12,416 9,717 Equity Bank -3.6% 56,261 58,336 52,502 46,146 40,356 Equity Bank -29.0% 24,976 35,176 32,941 27,586 24,811 Kenya Commercial Bank 20.6% 34,182 28,333 19,288 13,368 15,199 Co-operative Bank of Kenya -2.1% 8,635 8,818 8,648 8,083 6,830 Co-operative Bank of Kenya -2.9% 52,188 53,738 47,593 39,449 33,361 Co-operative Bank of Kenya -4.6% 31,724 33,261 29,846 24,670 20,045 Equity Bank -4.5% 14,757 15,457 6,832 7,469 8,189 Standard Chartered Bank -3.3% 3,775 3,905 3,908 3,815 3,800 Standard Chartered Bank 1.6% 34,255 33,719 29,886 30,234 28,705 Standard Chartered Bank -8.7% 13,558 14,845 14,915 15,674 15,528 Co-operative Bank of Kenya 66.0% 18,714 11,273 8,189 7,982 6,103 Barclays Bank of Kenya -8.6% 4,822 5,278 6,650 6,364 6,520 Barclays Bank of Kenya -4.9% 35,172 36,978 34,336 31,626 30,359 Barclays Bank of Kenya 3.1% 21,259 20,617 18,840 16,707 14,850 Standard Chartered Bank 10.0% 12,615 11,472 5,192 6,137 3,580 Diamond Trust 17.8% 1,902 1,615 1,418 1,214 1,111 Diamond Trust 3.3% 28,799 27,881 20,652 16,377 14,085 Diamond Trust -3.3% 16,834 17,406 15,264 11,958 9,963 Barclays Bank of Kenya 17.2% 17,620 15,038 14,697 10,752 3,848 Stanbic Bank 38.6% 3,532 2,547 2,621 2,816 2,524 Stanbic Bank 0.7% 24,652 24,483 21,839 19,596 18,601 Stanbic Bank -0.4% 12,062 12,106 10,486 8,508 7,533 Diamond Trust 115.6% 11,901 5,520 3,655 1,199 1,012 Commercial Bank of Africa 5.4% 7,153 6,789 6,789 2,682 1,862 Commercial Bank of Africa Stanbic Bank 47.7% 10,359 7,013 4,858 3,370 2,053 -2.9% 26,297 27,079 25,399 16,882 13,090 Commercial Bank of Africa -12.2% 10,038 11,438 11,240 8,098 5,712 NIC Bank 13.8% 2,080 1,828 1,671 1,356 1,136 Commercial Bank of Africa 4.7% 7,798 7,448 4,723 3,770 2,380 NIC Bank -1.8% 20,634 21,002 18,929 15,363 12,933 NIC Bank -14.1% 12,203 14,213 12,907 10,380 8,592 I&M Bank 21.3% 2,432 2,004 1,798 1,680 1,497 NIC Bank 4.9% 13,265 12,650 13,193 5,969 5,083 I&M Bank 0.1% 23,743 23,714 21,085 17,693 13,733 I&M Bank -4.2% 15,057 15,722 14,461 11,627 9,324 10.3% 59,706 54,125 55,105 48,929 42,178 I&M Bank 115.1% 17,668 8,216 5,072 1,913 1,060 -0.7% 375,830 378,369 335,980 290,440 251,639 -7.9% 203,868 221,268 201,938 167,135 144,670 Tier II KSh 50> 44 BANKING SURVEY | 2018 BANKING SURVEY | 2018 45 RESULTS AND ANALYSIS 2013 - 2017 RESULTS AND ANALYSIS 2013 - 2017 2018 - 2017 RESULTS AND ANALYSIS 6.31 Loan Loss Provisions 6.32 Total Insider Loans (KSh Billions) 6.33 Core Capital (Bank) KSh Billions 6.34 Quick Assets (KSh Billions) % 2017 2016 2015 2014 2013 % 2017 2016 2015 2014 2013 KSh Billions % 2017 2016 2015 2014 2013 % 2017 2016 2015 2014 2013 Tier 1 >KSh 150B change Tier 1 >KSh 150B change Tier 1 >KSh 150B Tier 1 >KSh 150B change Kenya Commercial Bank 15.3% 71,970 62,434 56,103 57,805 50,905 Kenya Commercial Bank 6.5% 131,197 123,222 118,563 96,780 86,397 Kenya Commercial Bank 27.0% 18,947 14,921 9,388 6,765 6,090 Kenya Commercial Bank -19.1% 13,824 17,089 11,266 9,288 8,321 Equity Bank -7.8% 4,995 5,417 2,766 3,204 2,676 Equity Bank -0.4% 7,768 7,797 7,571 7,003 5,792 Equity Bank 15.5% 59,198 51,248 47,659 39,733 34,759 Equity Bank 16.5% 154,997 133,040 79,389 60,777 54,011 Co-operative Bank of Kenya 57.1% 6,076 3,867 3,577 2,080 2,367 Co-operative Bank of Kenya 5.3% 9,480 9,001 6,899 6,836 6,464 Co-operative Bank of Kenya 13.4% 58,859 51,925 43,283 37,462 31,123 Co-operative Bank of Kenya 17.2% 102,506 87,497 100,867 76,190 62,734 Standard Chartered Bank 8.2% 5,571 5,149 2,013 2,110 2,915 Standard Chartered Bank -10.3% 11,718 13,060 13,458 10,156 9,196 Standard Chartered Bank 3.1% 38,768 37,617 35,184 32,624 31,798 Standard Chartered Bank 23.7% 86,157 69,641 66,484 82,941 65,852 Barclays Bank of Kenya 38.5% 6,809 4,915 4,763 4,153 1,509 Barclays Bank of Kenya 2.1% 6,379 6,248 5,946 5,222 4,255 Barclays Bank of Kenya 1.0% 35,628 35,258 33,259 28,944 25,831 Barclays Bank of Kenya 24.3% 128,551 103,435 90,556 78,402 69,308 Diamond Trust 76.3% 7,024 3,983 2,061 1,068 972 Diamond Trust -5.3% 3,891 4,108 4,048 3,380 2,681 Diamond Trust 18.9% 35,344 29,720 25,421 22,245 15,045 Diamond Trust 11.4% 102,842 92,329 53,862 37,897 29,625 Stanbic Bank 88.9% 3,244 1,717 1,271 1,103 956 Stanbic Bank 33.0% 5,915 4,448 5,259 4,448 4,159 Stanbic Bank 11.1% 31,765 28,591 25,881 24,308 21,210 Stanbic Bank 33.9% 91,717 68,516 78,187 77,150 54,060 Commercial Bank of Africa 13.2% 3,937 3,477 3,405 2,595 1,608 Commercial Bank of Africa 13.1% 7,454 6,590 6,471 6,471 6,655 Commercial Bank of Africa 7.1% 20,394 19,048 17,099 13,779 10,378 Commercial Bank of Africa 16.7% 101,625 87,096 70,277 47,143 71,402 NIC Bank 4.1% 4,923 4,728 2,389 2,302 1,996 NIC Bank 16.0% 2,821 2,431 1,987 2,665 1,915 NIC Bank 9.0% 27,652 25,380 21,529 18,826 14,108 NIC Bank 67.4% 71,072 42,451 37,767 34,407 27,181 I&M Bank 85.2% 4,103 2,216 1,127 792 360 I&M Bank 20.0% 3,466 2,888 1,749 2,507 2,538 30.2% 65,627 50,390 32,760 26,170 21,449 -1.3% 72,715 73,661 64,653 57,975 51,977 I&M Bank 20.7% 29,790 24,685 23,559 19,122 14,700 I&M Bank 6.2% 50,799 47,831 39,067 40,441 19,918 Tier II KSh 50> 46 BANKING SURVEY | 2018 BANKING SURVEY | 2018 47 RESULTS AND ANALYSIS 2013 - 2017 6.35 RiskWeightedAssets(KShBillions) 6.36 Shareholder’s Funds (Net Assets) (KSh Billions) % 2017 2016 2015 2014 2013 % 2017 2016 2015 2014 2013 Tier1>KSh150B change Tier 1 >KSh 150B change KenyaCommercialBank 12.3% 483,986 430,839 397,490 338,877 272,565 Kenya Commercial Bank 9.9% 88,991 80,990 80,886 72,167 62,390 EquityBank 5.1% 374,209 356,088 325,484 268,518 187,346 Equity Bank 18.3% 61,906 52,341 47,440 39,733 50,687 Co-operativeBankofKenya 11.8% 357,310 319,615 298,137 256,511 205,152 Co-operative Bank of Kenya 13.6% 68,227 60,046 49,311 42,351 35,652 StandardCharteredBank 1.9% 243,728 239,299 224,121 207,154 191,652 Standard Chartered Bank 1.5% 44,584 43,905 40,915 40,450 36,030 BarclaysBankofKenya 13.3% 228,112 201,321 189,747 183,105 147,682 Barclays Bank of Kenya 3.5% 43,559 42,095 39,716 38,186 32,371 DiamondTrust 11.4% 204,039 183,223 171,281 132,274 87,817 Diamond Trust 18.0% 43,004 36,432 29,996 25,784 18,568 StanbicBank 14.7% 206,090 179,751 162,284 138,735 119,641 Stanbic Bank 9.3% 33,051 30,238 28,251 26,644 22,353 CommercialBankofAfrica 7.9% 150,898 139,839 140,604 121,180 81,060 Commercial Bank of Africa 14.9% 31,571 27,470 22,708 17,857 13,749 NICBank 12.4% 165,647 147,419 148,255 131,045 95,220 NIC Bank -4.5% 28,938 30,288 26,455 23,258 17,631 I&MBank 16.9% 173,455 148,383 142,082 121,260 97,526 I&M Bank 11.9% 35,024 31,305 26,187 21,815 20,525 10.3% 2,587,474 2,345,776 2,199,484 1,898,658 1,485,661 10.1% 478,855 435,109 391,865 348,246 309,956 TierIIKSh50> 48 BANKING SURVEY | 2018 Market Share Analysis 2013- 2017 Market Share Analysis 2013- 2017 The Market Share 2017 has been compiled using data collected from the 2017 annual financial statements that have been published by the individual commercial banks. We have selected particular balance sheet and profit & loss account items that highlight the banking industry results and summarized in the following tables: Market Share - Balance Sheet Results (Selected) Market Share – Profit and Loss Account Results (Selected) Investments Loan Fees and Losses on Total Customer Loans & Total Market Share 2017 in KG Market Share 2017 PBT Interest Commission Loans and Assets Deposits Advances Income Securities Income Income Advances Kenya Commercial Bank 20.63% 15.18% 17.44% 15.14% 11.89% Kenya Commercial Bank 13.88% 15.20% 17.07% 9.18% Equity Bank 17.33% 11.57% 9.44% 20.79% 5.57% Equity Bank 10.15% 10.31% 9.19% 10.62% Co-operative Bank of Kenya 12.39% 10.73% 11.99% 12.23% 8.47% Co-operative Bank of Kenya 9.56% 9.86% 10.76% 6.89% Standard Chartered Bank 7.14% 7.04% 5.12% 5.35% 10.00% Standard Chartered Bank 7.12% 7.37% 5.78% 10.95% Barclays Bank of Kenya 7.51% 7.23% 8.03% 6.83% 7.44% Barclays Bank of Kenya 6.79% 6.43% 7.35% 6.78% Diamond Trust 6.18% 5.92% 6.36% 2.69% 6.40% Diamond Trust 6.75% 6.58% 6.50% 8.46% Stanbic Bank 4.20% 5.07% 4.56% 5.00% 6.60% Stanbic Bank 5.98% 5.28% 5.62% 7.52% Commercial Bank of Africa 5.40% 5.41% 3.79% 10.13% 5.13% Commercial Bank of Africa 5.73% 6.16% 4.44% 5.76% NIC Bank 4.26% 4.24% 4.61% 2.95% 6.64% NIC Bank 4.82% 4.51% 4.91% 5.13% I&M Bank 5.64% 4.88% 5.69% 3.44% 9.20% I&M Bank 4.60% 4.58% 5.27% 4.11% Tier Aggregate 90.68% 77.28% 77.02% 84.55% 77.36% Tier Aggregate 75.4% 76.27% 76.9% 75.41% Tier II KSh 50> 50 BANKING SURVEY | 2018 BANKING SURVEY | 2018 51 Market Share Analysis 2013- 2017 Market Share Analysis 2013- 2017 Tier I Banks Market Share – Disclosures (Selected) Market Share Trends and Analysis 2013 to 2017 General In this section we have compiled the market share results Forex Gross Loan Loss Market Share 2017 Admin for the period 2013 to 2017 for the selected balance sheet Earnings NPL Provisionss Expenses and profit & loss account items that have been summarized in the introduction, showing the trend over the past five 10.60% 16.61% 12.88% 16.30% Kenya Commercial Bank years for each of the selected items. Equity Bank 7.94% 10.52% 5.56% 4.96% Co-operative Bank of Kenya 7.06% 11.23% 7.05% 4.83% Market Share 2013 to 2017 - Balance Sheet Results (Selected) Standard Chartered Bank 9.63% 6.92% 4.75% 6.06% Total Assets Market Share 2013 – 2017 Barclays Bank of Kenya 10.37% 10.64% 6.64% 9.01% •Total Assets Market Share for Tier I Banks has increased by 9% from Tier 1 >KSh 150B % Change 2017 2016 2015 2014 2013 69.02% in 2013 to 75.38% in 2017 Diamond Trust 3.76% 3.04% 4.48% 5.72% Kenya Commercial Bank 15.1% 13.88% 13.74% 12.96% 11.88% 12.06% Stanbic Bank 15.99% 5.49% 3.90% 3.37% Equity Bank 14.3% 10.15% 10.34% 9.46% 8.70% 8.88% Commercial Bank of Africa 7.98% 3.86% 2.94% 3.87% Co-operative Bank of Kenya 12.1% 9.56% 9.53% 9.41% 8.91% 8.53% Tier I Banks – Total Assets Market Share Trend NIC Bank 3.96% 2.75% 5.00% 4.22% Standard Chartered Bank -13.4% 7.12% 6.81% 6.49% 7.01% 8.22% 2013 2014 2015 2016 2017 % • CBA registered the highest gain in market share, increasing 59% from 4.26% of the total industry assets I&M Bank 4.97% 2.90% 6.66% 4.35% Barclays Bank of Kenya -12.1% 6.79% 7.06% 6.68% 7.12% 7.72% Change in 2013 to 6.75% in 2017, followed by Stanbic which Kenya Commercial Bank 12.06% 11.88% 12.96% 13.74% 13.88% 15% Tier Aggregate 82.26% 73.80% 59.87% 62.68% Diamond Trust 58.5% 6.75% 6.64% 5.29% 4.45% 4.26% increased its market share by 23% from 4.66% in 2013 to Tier II KSh 50> ABC Bank 0.16% 0.77% 1.33% 0.68% 50B Sidian Bank 0.41% 1.03% 0.98% 0.63% Gulf African Bank 30.7% 0.78% 0.74% 0.68% 0.62% 0.60% GT Bank Kenya -27.8% 0.69% 0.81% 0.81% 1.04% 0.96% Habib A.G. Zurich 0.08% 0.29% 0.22% 0.13% Victoria Commercial Bank 27.6% 0.65% 0.61% 0.55% 0.54% 0.51% First Community Bank 0.35% 0.46% 1.66% 0.87% ABC Bank -15.4% 0.62% 0.61% 0.61% 0.68% 0.73% Development Bank of Kenya 0.10% 0.19% 0.87% 1.04% Sidian Bank -2.0% 0.48% 0.57% 0.53% 0.50% 0.49% Guardian Bank 0.14% 0.40% 0.42% 0.47% Habib A.G. Zurich 13.8% 0.47% 0.46% 0.40% 0.38% 0.41% Tier Aggregate 2.51% 5.27% 6.76% 4.72% First Community Bank 2.9% 0.43% 0.41% 0.40% 0.48% 0.42% Tier IV • Bank of Africa lost the most in market share, 31% from 1.96% in 2013 to Loans & Advances to Customers Market Share 2013 – 2017 1.35% in 2017 followed by NBK which lost 20%, from 3.45% in 2013 to 2.75% in 2017 Tier 1 >KSh 150B % Change 2017 2016 2015 2014 2013 Kenya Commercial Bank 29.8% 17.07% 16.32% 14.39% 13.32% 13.16% Equity Bank -7.9% 9.19% 9.67% 10.18% 9.98% 9.98% Co-operative Bank of Kenya 20.3% 10.76% 10.56% 9.44% 9.38% 8.94% Standard Chartered Bank -31.3% 5.78% 5.80% 5.45% 6.66% 8.42% Barclays Bank of Kenya -5.1% 7.35% 7.72% 6.60% 6.68% 7.74% Diamond Trust 33.6% 6.50% 6.20% 5.69% 4.93% 4.87% Stanbic Bank 25.1% 5.62% 5.18% 4.59% 4.65% 4.49% • Customer Deposits Market Share for Tier III Banks has decreased Commercial Bank of Africa 17.4% 4.44% 4.60% 4.78% 4.79% 3.78% by 11% from 5.39% in 2013 to 4.80% in 2017 NIC Bank -5.0% 4.91% 4.92% 4.94% 5.15% 5.17% I&M Bank 11.4% 5.27% 4.86% 4.63% 4.72% 4.73% Tier Aggregate 7.9% 76.89% 75.83% 70.67% 70.26% 71.28% Tier II KSh 50> 54 BANKING SURVEY | 2018 BANKING SURVEY | 2018 55 Market Share Analysis 2013- 2017 Market Share Analysis 2013- 2017 Tier IV Banks – Total Loans and Advances to • Total Loans and Advances Market Share for Tier I Banks has increased Tier I Banks by 8% from 71.28% in 2013 to 76.89% in 2017 Customers Market Share Trend 2013 2014 2015 2016 2017 % Change Credit Bank 0.29% 0.30% 0.33% 0.37% 0.42% 45.8% Consolidated Bank 0.76% 0.56% 0.45% 0.45% 0.41% -45.8% Jamii Bora Bank 0.25% 0.33% 0.48% 0.46% 0.41% 64.1% SBM Bank (Fidelity) 0.48% 0.54% 0.45% 0.31% 0.28% -42.6% Spire Bank 0.61% 0.60% 0.46% 0.36% 0.28% -53.3% M Oriental Commercial Bank 0.29% 0.26% 0.25% 0.31% 0.32% 11.8% Trans-National Bank 0.30% 0.34% 0.33% 0.31% 0.31% 2.4% Paramount Universal Bank 0.26% 0.28% 0.29% 0.27% 0.29% 11.9% UBA Kenya Ltd 0.05% 0.04% 0.12% 0.14% 0.14% 167.2% Tier I Banks – Total Loans and Advances to Customers Market Share Trend Middle East Bank 0.25% 0.19% 0.18% 0.18% 0.13% -45.6% Tier III Banks – Total Loans and Advances to 2013 2014 2015 2016 2017 % • DTB registered the highest gain in market share, increasing 34% from Customers Market Share Trend • UBA registered the highest gain in market share, increasing Change 4.87% of the total industry loans & advances in 2013 to 6.50% in 2017, 167% from 0.05% of the total industry loans & advances in Kenya Commercial Bank 13.16% 13.32% 14.39% 16.32% 17.07% 30% followed by KCB which increased its market share by 30% from 13.16% 2013 2014 2015 2016 2017 % 2013 to 0.14% in 2017, followed by Jamii Bora which Equity Bank 9.98% 9.98% 10.18% 9.67% 9.19% -8% in 2013 to 17.07% in 2017 Change increased its market share by 64% from 0.25% in 2013 to Co-operative Bank of Kenya 8.94% 9.38% 9.44% 10.56% 10.76% 20% Gulf African Bank 0.69% 0.73% 0.70% 0.73% 0.84% 21% 0.41% in 2017 • Standard Chartered lost the most in market share, 31% from 8.42% in • Spire Bank lost the most in market share, 53.3% from Standard Chartered Bank 8.42% 6.66% 5.45% 5.80% 5.78% -31% GT Bank Kenya 0.68% 0.66% 0.57% 0.59% 0.57% -17% 2013 to 5.78% in 2017 followed by Equity which lost 8%, from 9.98% 0.61% in 2013 to 0.28% in 2017 followed by Consolidated Barclays Bank of Kenya 7.74% 6.68% 6.60% 7.72% 7.35% -5% Victoria Commercial Bank 0.53% 0.57% 0.58% 0.67% 0.78% 47% in 2013 to 9.197.03% in 2017 Bank which lost 45.8% from 0.76% in 2013 to 0.41% in ABC Bank 0.71% 0.70% 0.69% 0.66% 0.68% -4% Diamond Trust 4.87% 4.93% 5.69% 6.20% 6.50% 34% 2017 Stanbic Bank 4.49% 4.65% 4.59% 5.18% 5.62% 25% 2013 2014 2015 2016 2017 % Sidian Bank 0.60% 0.58% 0.59% 0.63% 0.51% -15% Commercial Bank of Africa 3.78% 4.79% 4.78% 4.60% 4.44% 17% Change Habib A.G. Zurich 0.20% 0.18% 0.24% 0.23% 0.24% 18% Investments in Kenya Government Securities Market NIC Bank 5.17% 5.15% 4.94% 4.92% 4.91% -5% National Bank of Kenya 2.64% 3.52% 3.23% 2.94% 2.83% 7.0% First Community Bank 0.47% 0.52% 0.51% 0.52% 0.46% -3% I&M Bank 4.73% 4.72% 4.63% 4.86% 5.27% 11% Development Bank of Kenya 0.56% 0.48% 0.40% 0.44% 0.44% -21% Share 2013 – 2017 Citibank 1.58% 1.27% 1.23% 1.24% 1.58% -0.1% Guardian Bank 0.59% 0.53% 0.44% 0.42% 0.43% -27% Tier 1 >KSh 150B % 2017 2016 2015 2014 2013 Bank of Baroda 1.54% 1.50% 1.43% 1.67% 1.82% 18.6% Change • Victoria Commercial Bank registered the highest gain in market share, Prime Bank 1.75% 1.81% 1.85% 1.76% 1.65% -5.7% increasing 47% from 0.53% of the total industry loans & advances in Kenya Commercial Bank -22.8% 9.18% 10.61% 11.35% 11.32% 11.90% Family Bank 1.86% 2.16% 2.57% 2.34% 1.95% 4.4% 2013 to 0.78% in 2017, followed by Gulf African Bank which increased Equity Bank 79.0% 10.62% 10.60% 4.68% 5.13% 5.93% HF Bank 2.29% 2.39% 2.42% 2.48% 2.18% -4.8% its market share by 21% from 0.69% in 2013 to 0.84% in 2017 Co-operative Bank of Kenya 11.6% 6.89% 6.73% 8.71% 6.37% 6.17% • Guardian Bank lost the most in market share, 27% from 0.59% in Standard Chartered Bank 11.5% 10.95% 10.07% 10.65% 9.17% 9.83% Bank of India 0.69% 0.64% 0.80% 0.85% 0.86% 25.5% 2013 to 0.43% in 2017 followed by Development Bank which lost 21%, Barclays Bank of Kenya -22.9% 6.78% 6.54% 7.00% 9.00% 8.79% Bank of Africa 2.00% 2.03% 1.82% 1.64% 1.39% -30.4% from 0.56% in 2013 to 0.43% in 2017 Diamond Trust 156.7% 8.46% 8.69% 5.00% 3.58% 3.30% Ecobank 1.27% 1.25% 1.37% 1.20% 0.89% -30.1% Tier IV Banks Stanbic Bank 65.6% 7.52% 6.16% 7.05% 9.05% 4.54% Commercial Bank of Africa -32.0% 5.76% 5.53% 6.22% 4.39% 8.47% • Bank of India registered the highest gain in market share, increasing NIC Bank 74.2% 5.13% 3.18% 3.64% 2.59% 2.95% 25.5% from 0.69% of the total industry loans & advances in 2013 to • Total Loans & Advances to Customers Market Share for Tier II Banks 0.86% in 2017, followed by Bank of Baroda which increased its market I&M Bank 83.0% 4.11% 4.48% 4.52% 5.08% 2.25% has reduced by 24% from 19.96% in 2013 to 15.15% in 2017 share by 18.6% from 1.54% in 2013 to 1.82% in 2017 Tier Aggregate 17.6% 75.41% 72.60% 68.82% 65.67% 64.12% Tier II KSh 50> Tier II Banks – Total Loans and Advances to Customers Market Share Trend • Total Loans & Advances to Customers Market Share for Tier III Banks has decreased by 2% from 5.04% in 2013 to 4.94% in 2017 56 BANKING SURVEY | 2018 BANKING SURVEY | 2018 57 Market Share Analysis 2013- 2017 Market Share Analysis 2013- 2017 Tier III KSh 15B> 58 BANKING SURVEY | 2018 BANKING SURVEY | 2018 59 Market Share Analysis 2013- 2017 Market Share Analysis 2013- 2017 TIER AGGREGATE 16.6% 26.86% 30.13% 31.02% 24.80% 23.04% Tier I Banks – Gross Non-Performing Loans and Advances Market Share Trend Tier II Banks – Gross Non-Performing Loans and Advances Market Share Trend Tier III Banks – Gross Non-Performing Loans and Advances Market Share Trend TIER III KSH 15B> Tier I Banks • Gross NPL Market Share for Tier III Banks has increased 8% from 6.29% in 2013 to 6.76% in 2017 • Gross NPL Market Share for Tier IV Banks has decreased 40% from 10.91% in 2013 to 6.51% in 2017 • Gross NPL Market Share for Tier II Banks has increased 17% from 23.04% in 2013 to 26.86% in 2017 • Gross NPL Market Share for Tier I Banks has increased from 59.77% in 2013 to 59.87% in 2017 60 BANKING SURVEY | 2018 BANKING SURVEY | 2018 61 Market Share Analysis 2013- 2017 Market Share Analysis 2013- 2017 Tier IV Banks – Gross Non-Performing Loans and Advances Market Share Trend Tier III KSh 15B> Tier II KSh 50> Profit before Tax and Exceptional Items Market Share 2013 – 2017 Tier 1 >KSh 150B % 2017 2016 2015 2014 2013 Change Kenya Commercial Bank 42.7% 20.63% 19.74% 17.73% 15.93% 14.46% Equity Bank 100.5% 17.33% 15.79% 10.64% 8.91% 8.64% Co-operative Bank of Kenya -12.0% 12.39% 12.49% 16.93% 14.32% 14.08% Standard Chartered Bank -34.2% 7.14% 8.85% 6.79% 10.18% 10.85% Barclays Bank of Kenya -22.7% 7.51% 7.24% 9.13% 8.75% 9.72% • PBT Market Share for Tier I Banks has increased by 12% from Diamond Trust 36.9% 6.18% 6.15% 5.34% 4.49% 4.51% 80.73% in 2013 to 90.68% in 2017 Stanbic Bank -26.4% 4.20% 4.98% 5.35% 5.26% 5.71% Commercial Bank of Africa 48.4% 5.40% 5.26% 4.71% 3.22% 3.64% NIC Bank 0.1% 4.26% 4.11% 4.73% 4.33% 4.26% I&M Bank 16.1% 5.64% 6.00% 6.33% 5.52% 4.86% Tier Aggregate 12.3% 90.68% 90.62% 87.68% 80.92% 80.73% 64 BANKING SURVEY | 2018 BANKING SURVEY | 2018 65 Market Share Analysis 2013- 2017 Tier III Banks – Profit before Tax and Exceptional Items Market Share Trend Tier IV Banks – Profit before Tax and Exceptional Items Market Share Tier III KSh 15B> 66 BANKING SURVEY | 2018 BANKING SURVEY | 2018 67 Market Share Analysis 2013- 2017 Market Share Analysis 2013- 2017 Tier III Banks – Profit before Tax and Exceptional Items Market Share Trend Tier IV Victoria Commercial Bank 36.9% 0.60% 0.54% 0.55% 0.47% 0.44% Tier I Banks – Total Income Market Share Trend HF Bank 1.60% 1.66% 1.85% 1.79% 1.53% -5% ABC Bank -11.9% 0.69% 0.71% 0.67% 0.72% 0.78% 2013 2014 2015 2016 2017 % Bank of India 0.89% 0.83% 0.84% 0.94% 1.13% 28% Sidian Bank -19.6% 0.55% 0.74% 0.71% 0.75% 0.68% Change Bank of Africa 1.73% 1.54% 1.56% 1.77% 1.30% -25% Habib A.G. Zurich 17.2% 0.37% 0.38% 0.31% 0.33% 0.32% Kenya Commercial Bank 13.22% 13.73% 13.46% 14.23% 15.18% 15% Ecobank 1.01% 1.00% 1.16% 0.71% 0.91% -11% First Community Bank -11.6% 0.31% 0.34% 0.34% 0.34% 0.36% Equity Bank 9.31% 9.49% 10.05% 11.62% 11.57% 24% Development Bank of Kenya -31.4% 0.32% 0.37% 0.40% 0.45% 0.47% Co-operative Bank of Kenya 11.00% 11.10% 11.09% 10.71% 10.73% -2% Guardian Bank -21.1% 0.38% 0.45% 0.47% 0.47% 0.48% Standard Chartered Bank 8.01% 7.27% 6.31% 6.72% 7.04% -12% • Bank of Baroda registered the highest gain in market share, Tier Aggregate -5.7% 4.47% 4.81% 4.87% 4.78% 4.74% Barclays Bank of Kenya 8.47% 7.61% 7.25% 7.37% 7.23% -15% increasing 30% from 1.78% of the total industry Income in 2013 Diamond Trust 3.93% 3.94% 4.36% 5.55% 5.92% 51% to 2.31% in 2017, followed by Bank of India which increased its Stanbic Bank 5.19% 4.71% 4.61% 4.88% 5.07% -2% market share by 28% from 0.89% in 2013 to 1.13% in 2017 • Bank of Africa lost the most in market share, 25% from 1.73% • PBT Market Share for Tier IV Banks has decreased from Commercial Bank of Africa 3.65% 4.06% 5.36% 5.40% 5.41% 48% in 2013 to 1.30% in 2017 followed by NBK which lost 17%, from -0.14% in 2013 to -2.90% in 2017 NIC Bank 3.61% 3.69% 4.00% 4.18% 4.24% 18% 3.06% in 2013 to 2.54% in 2017 I&M Bank 3.83% 4.26% 4.45% 4.72% 4.88% 27% 68 BANKING SURVEY | 2018 BANKING SURVEY | 2018 69 Market Share Analysis 2013- 2017 Tier III Banks • Total Income Market Share for Tier II Banks has reduced by 27% from 21.33% in 2013 to 15.48% in 2017 • Total Income for Tier III Banks has decreased by 6% from 4.74% in 2013 to 4.47% in 2017 Tier II Banks – Total Income Market Share Trend 2013 2014 2015 2016 2017 % Tier I Banks – Total Income Market Share Trend Change 2013 2014 2015 2016 2017 % National Bank of Kenya 3.06% 3.29% 3.24% 2.96% 2.54% -17% Change Citibank 2.52% 2.12% 2.16% 2.01% 2.17% -14% Kenya Commercial Bank 13.22% 13.73% 13.46% 14.23% 15.18% 15% Bank of Baroda 1.78% 1.70% 1.67% 1.98% 2.31% 30% Equity Bank 9.31% 9.49% 10.05% 11.62% 11.57% 24% Prime Bank 1.64% 1.63% 1.72% 1.71% 1.72% 5% Co-operative Bank of Kenya 11.00% 11.10% 11.09% 10.71% 10.73% -2% Family Bank 2.00% 2.33% 2.71% 2.61% 1.88% -6% Standard Chartered Bank 8.01% 7.27% 6.31% 6.72% 7.04% -12% Barclays Bank of Kenya 8.47% 7.61% 7.25% 7.37% 7.23% -15% HF Bank 1.60% 1.66% 1.85% 1.79% 1.53% -5% Diamond Trust 3.93% 3.94% 4.36% 5.55% 5.92% 51% Bank of India 0.89% 0.83% 0.84% 0.94% 1.13% 28% Stanbic Bank 5.19% 4.71% 4.61% 4.88% 5.07% -2% Bank of Africa 1.73% 1.54% 1.56% 1.77% 1.30% -25% Commercial Bank of Africa 3.65% 4.06% 5.36% 5.40% 5.41% 48% Ecobank 1.01% 1.00% 1.16% 0.71% 0.91% -11% NIC Bank 3.61% 3.69% 4.00% 4.18% 4.24% 18% I&M Bank 3.83% 4.26% 4.45% 4.72% 4.88% 27% • Bank of Baroda registered the highest gain in market share, increasing 30% from 1.78% of the total industry Income in 2013 to 2.31% in 2017, • DTB registered the highest gain in market share, increasing 51% from followed by Bank of India which increased its market share by 28% from 3.93% of the total industry Income in 2013 to 5.92% in 2017, followed 0.89% in 2013 to 1.13% in 2017 by CBA which increased its market share by 48% from 3.65% in 2013 to • Bank of Africa lost the most in market share, 25% from 1.73% in 2013 5.41% in 2017 to 1.30% in 2017 followed by NBK which lost 17%, from 3.06% in 2013 • BBK lost the most in market share, 15% from 8.47% in 2013 to 7.23% to 2.54% in 2017 in 2017 followed by StanChart which lost 15%, from 8.01% in 2013 to 7.04% in 2017 Tier II Banks Sound Plaza 4th Floor Woodvale Groove Westlands, P. O. Box 14001-00800 Nairobi, Kenya 70 BANKING SURVEY | 2018 Telephone: (+254) 20 444 9266 Priority Line: 0709 935 000 Email: [email protected] www.paramountbank.co.ke BANKING SURVEY | 2018 71 Market Share Analysis 2013- 2017 Market Share Analysis 2013- 2017 Tier III Banks Tier IV Banks Loan Interest Income Market Share 2013 – 2017 Tier II Banks Tier 1 >KSh 150B % 2017 2016 2015 2014 2013 Change Kenya Commercial Bank 29.3% 17.44% 15.53% 14.34% 13.01% 13.49% Equity Bank -20.2% 9.44% 11.75% 11.51% 11.24% 11.82% Co-operative Bank of Kenya 25.5% 11.99% 11.11% 10.43% 10.05% 9.55% Standard Chartered Bank -30.8% 5.12% 4.96% 5.21% 6.38% 7.40% Barclays Bank of Kenya 13.5% 8.03% 6.89% 6.58% 6.81% 7.08% Diamond Trust 34.0% 6.36% 5.82% 5.33% 4.87% 4.75% • Total Income for Tier III Banks has decreased by 6% from • Total Income Market Share for Tier IV Banks has decreased Stanbic Bank 26.9% 4.56% 4.05% 3.66% 3.47% 3.59% 4.74% in 2013 to 4.47% in 2017 by 25% from 3.69% in 2013 to 2.77% in 2017 Commercial Bank of Africa 39.3% 3.79% 3.82% 3.93% 3.30% 2.72% NIC Bank 12.6% 4.61% 4.75% 4.51% 4.23% 4.09% • Loan Interest Income Market Share for Tier II Banks has reduced I&M Bank 28.0% 5.69% 5.25% 5.05% 4.74% 4.44% by 33% from 21.71% in 2013 to 14.65% in 2017 Tier Aggregate 11.7% 77.02% 73.94% 70.57% 68.08% 68.94% Tier II KSh 50> 72 BANKING SURVEY | 2018 BANKING SURVEY | 2018 73 Market Share Analysis 2013- 2017 Market Share Analysis 2013- 2017 Tier III Banks Tier II KSh 50> Tier II KSh 50> Losses on Loans and Advances Income Market Share 2013 – 2017 Tier III Banks Tier 1 >KSh 150B % 2017 2016 2015 2014 2013 Tier IV Banks Change Kenya Commercial Bank -7.1% 11.89% 8.34% 6.72% 17.55% 12.81% Equity Bank 0.4% 5.57% 11.12% 6.13% 6.60% 5.55% Co-operative Bank of Kenya -35.7% 8.47% 5.76% 3.89% 6.75% 13.18% Standard Chartered Bank 41.0% 10.00% 4.88% 14.96% 7.62% 7.09% Barclays Bank of Kenya -15.3% 7.44% 8.71% 5.39% 8.18% 8.79% Diamond Trust 48.1% 6.40% 6.26% 4.76% 2.85% 4.32% Stanbic Bank 7.5% 6.60% 4.07% 3.06% 4.68% 6.14% Commercial Bank of Africa 79.9% 5.13% 7.48% 10.30% 5.65% 2.85% • Fees and Commission Income for Tier III Banks has increased by 14% from 3.12% in 2013 to 3.56% in 2017 NIC Bank 93.0% 6.64% 8.24% 4.70% 1.72% 3.44% I&M Bank 238.2% 9.20% 6.17% 1.69% 4.35% 2.72% • Fees and Commission Income Market Share for Tier IV Banks has Tier Aggregate 15.6% 77.36% 71.04% 61.60% 65.95% 66.90% decreased by 5% from 2.69% in 2013 to 2.56% in 2017 76 BANKING SURVEY | 2018 BANKING SURVEY | 2018 77 Market Share Analysis 2013- 2017 Market Share Analysis 2013- 2017 Market Share • Losses on Loans and Advances Market Share for Tier I Banks has increased Tier III Banks – Losses on Loans and Advances Market Share Trend by 16% from 66.90% in 2013 to 77.36% in 2017 Tier IV Banks – Losses on Loans and Advances Market Share Trend 2013 2014 2015 2016 2017 % Change 2013 2014 2015 2016 2017 % Change Gulf African Bank 0.31% 0.18% 0.62% 0.12% 1.54% 393% Credit Bank 0.32% 0.69% 0.68% 0.33% 0.33% 0.2% GT Bank Kenya 0.24% 0.20% 0.28% 0.17% 0.68% 188% Consolidated Bank 2.92% 2.61% 1.80% 0.69% 0.94% -68% Victoria Commercial Bank 0.08% 0.06% 0.06% 0.03% 0.08% 10% Jamii Bora Bank 0.23% 0.70% 0.42% 0.70% 0.54% 136% ABC Bank 0.09% 0.77% 0.24% 0.23% 0.21% 150% SBM Bank (Fidelity) 0.40% 0.30% 0.34% 3.52% 0.13% -68% Sidian Bank 1.08% 1.41% 0.67% 0.69% 1.11% 3% Spire Bank 0.62% 5.13% 1.10% 1.48% 1.82% 192% Habib A.G. Zurich -0.03% 0.05% 0.05% 0.11% 0.17% 612% M Oriental Commercial Bank 0.22% 0.46% 0.27% 0.58% 0.42% 96% First Community Bank 0.30% 0.60% 0.67% 0.62% 0.45% 48% Trans-National Bank 0.63% 0.53% 0.23% 0.21% 0.19% -69% Development Bank of Kenya 0.62% 0.52% 0.11% 0.28% 0.15% -76% Paramount Universal Bank 0.07% 0.06% 0.04% 0.13% 0.11% 58% Guardian Bank 0.10% 0.65% 0.50% 0.59% 0.15% 43% UBA Kenya Ltd 0.17% 0.24% 0.06% 0.02% 0.06% -62% Middle East Bank 0.46% 0.22% 0.13% 0.14% 0.06% -86% • Habib A.G. Zurich registered the highest rise in market share, from -0.03% of the total industry Losses on Loans & Advances in 2013 to 0.17% in 2017 • M Oriental registered the highest rise in market share, increasing 192% from 0.62% Tier I Banks – Losses on Loans and Advances Market Share Trend followed by Gulf African Bank which increased its market share from 0.31% in of the total industry Losses on Loans & Advances in 2013 to 1.82% in 2017, followed Tier II Banks – Losses on Loans and Advances Market Share Trend 2013 2014 2015 2016 2017 % Change 2013 to 1.54% in 2017 by Jamii Bora which increased its market share by 136% from 0.23% in 2013 to Kenya Commercial Bank 12.81% 17.55% 6.72% 8.34% 11.89% -7% 2013 2014 2015 2016 2017 % Change • Development Bank is the only institution that reduced its market share, from 0.54% in 2017 0.62% in 2013 to 0.15% in 2017 • Middle East Bank reduced its market share the most, 86% from 0.46% in 2013 to Equity Bank 5.55% 6.60% 6.13% 11.12% 5.57% 0.4% National Bank of Kenya 2.07% 3.06% 11.36% 5.36% 1.81% -13% 0.06% in 2017 followed by Transnational Bank reduced its market share 69% from Co-operative Bank of Kenya 13.18% 6.75% 3.89% 5.76% 8.47% -36% Citibank 7.59% 0.41% 1.04% -0.21% 0.08% -99% 0.63% in 2013 to 0.19% in 2017 Standard Chartered Bank 7.09% 7.62% 14.96% 4.88% 10.00% 41% Tier IV Banks Bank of Baroda 0.51% 0.50% 1.84% 0.97% 0.87% 69% Barclays Bank of Kenya 8.79% 8.18% 5.39% 8.71% 7.44% -15% Prime Bank 1.00% 0.59% 0.46% 0.46% 0.81% -19% Diamond Trust 4.32% 2.85% 4.76% 6.26% 6.40% 48% Foreign Exchange Earnings Market Share 2013 – 2017 Family Bank 2.31% 2.27% 0.65% 1.88% 2.23% -4% Stanbic Bank 6.14% 4.68% 3.06% 4.07% 6.60% 7% Tier 1 >KSh 150B % Change 2017 2016 2015 2014 2013 Commercial Bank of Africa 2.85% 5.65% 10.30% 7.48% 5.13% 80% HF Bank 2.02% 3.21% 1.54% 1.55% 1.38% -32% Kenya Commercial Bank 27.8% 10.60% 9.16% 8.98% 10.60% 8.29% NIC Bank 3.44% 1.72% 4.70% 8.24% 6.64% 93% Bank of India 0.01% -0.09% 0.16% 0.10% 0.23% 1642% Equity Bank 79.8% 7.94% 7.94% 7.75% 5.82% 4.42% I&M Bank 2.72% 4.35% 1.69% 6.17% 9.20% 238% Bank of Africa 0.97% 2.41% 6.55% 5.54% 1.84% 90% Co-operative Bank of Kenya -0.8% 7.06% 6.67% 7.67% 5.81% 7.11% Ecobank 2.30% -0.33% 0.15% 2.68% 4.24% 84% • I&M registered the highest gain in market share, increasing 238% from 2.72% of Standard Chartered Bank -14.1% 9.63% 11.80% 9.51% 9.75% 11.22% the total industry Losses on Loans & Advances in 2013 to 9.20% in 2017, followed by NIC which increased its market share by 93% from 3.44% in 2013 to 6.64% • Bank of India registered the highest rise in market share, from 0.01% of Barclays Bank of Kenya 1.0% 10.37% 10.89% 8.29% 9.87% 10.27% the total industry Losses on Loans & Advances in 2013 to 0.23% in 2017, in 2017 • Losses on Loans and Advances Market Share for Tier IV Banks has Diamond Trust -4.1% 3.76% 5.26% 4.32% 3.90% 3.92% • CO-OP Bank lost the most in market share, 36% from 13.18% in 2013 to 8.47% followed by Bank of Africa which increased its market share by 90% from decreased by 37% from 7.36% in 2013 to 4.63% in 2017 Stanbic Bank -11.9% 15.99% 13.97% 12.63% 13.72% 18.15% in 2017 followed by BBK which lost 15%, from 8.79% in 2013 to 7.44% in 2017 0.97% in 2013 to 1.84% in 2017 • Citibank reduced its market share the most, 99% from 7.59% in 2013 to Commercial Bank of Africa 14.0% 7.98% 9.09% 6.95% 6.68% 7.00% Tier II Banks 0.08% in 2017 followed by HF Bank which reduced its market share 32%, NIC Bank -21.1% 3.96% 4.28% 5.13% 5.02% 5.02% from 2.02% in 2013 to 1.38% in 2017 I&M Bank 88.6% 4.97% 5.01% 4.28% 3.04% 2.64% Tier Aggregate 5.4% 82.26% 84.09% 75.52% 74.22% 78.03% Tier III Banks Tier II KSh 50> 78 BANKING SURVEY | 2018 BANKING SURVEY | 2018 79 Market Share Analysis 2013- 2017 Market Share Analysis 2013- 2017 Market Share Market Share Tier III Banks Tier IV Banks Tier I Banks Tier II Banks • Foreign Exchange Earnings Market Share for Tier IV Banks • Foreign Exchange Earnings Market Share for Tier I Banks has increased by has decreased by 45% from 1.70% in 2013 to 0.94% in 2017 5% from 78.03% in 2013 to 82.26% in 2017 • Foreign Exchange Earnings for Tier III Banks has decreased • Foreign Exchange Earnings Market Share for Tier II Banks from 2.55% in 2013 to 2.51% in 2017 has reduced by 19% from 17.71% in 2013 to 14.29% in 2017 Tier III Banks – Foreign Exchange Earnings Market Share Trend General Administrative Expenses Market Share 2013 – 2017 Tier II Banks – Foreign Exchange Earnings Market Share Trend Tier 1 >KSh 150B % 2017 2016 2015 2014 2013 2013 2014 2015 2016 2017 % 2013 2014 2015 2016 2017 % Tier I Banks – Foreign Exchange Earnings Market Share Trend Change Change Change Kenya Commercial Bank 14.5% 16.61% 15.28% 13.36% 13.37% 14.50% 2013 2014 2015 2016 2017 % National Bank of Kenya 1.52% 2.10% 2.30% 1.51% 1.91% 25% Gulf African Bank 0.60% 0.69% 0.67% 0.52% 0.93% 55% Change Equity Bank -6.0% 10.52% 11.23% 11.23% 12.34% 11.18% Citibank 9.26% 7.78% 6.60% 5.92% 6.85% -26% GT Bank Kenya 0.37% 0.31% 0.32% 0.30% 0.25% -32% Kenya Commercial Bank 8.29% 10.60% 8.98% 9.16% 10.60% 28% Co-operative Bank of Kenya -2.8% 11.23% 11.06% 11.05% 11.32% 11.56% Bank of Baroda 0.38% 0.38% 0.35% 0.37% 0.33% -14% Equity Bank 4.42% 5.82% 7.75% 7.94% 7.94% 80% Victoria Commercial Bank 0.13% 0.11% 0.11% 0.11% 0.11% -15% Standard Chartered Bank -2.6% 6.92% 7.43% 7.08% 7.19% 7.10% Prime Bank 1.53% 1.63% 1.80% 1.24% 0.71% -53% Co-operative Bank of 7.11% 5.81% 7.67% 6.67% 7.06% -1% Sidian Bank 0.06% 0.13% 0.21% 0.29% 0.41% 566% Barclays Bank of Kenya -4.8% 10.64% 10.68% 10.73% 10.21% 11.18% Family Bank 0.33% 0.54% 1.22% 0.98% 1.05% 219% Kenya Diamond Trust 25.5% 3.04% 2.61% 2.69% 2.49% 2.42% HF Bank 0.01% 0.09% 0.24% 0.02% 0.18% 2360% Habib A.G. Zurich 0.11% 0.09% 0.10% 0.09% 0.08% -27% Standard Chartered Bank 11.22% 9.75% 9.51% 11.80% 9.63% -14% Stanbic Bank 8.0% 5.49% 5.36% 5.29% 5.14% 5.08% Bank of India 0.14% 0.13% 0.07% 0.11% 0.10% -30% First Community Bank 0.19% 0.42% -0.17% 0.20% 0.35% 88% Barclays Bank of Kenya 10.27% 9.87% 8.29% 10.89% 10.37% 1% Commercial Bank of Africa 29.4% 3.86% 3.46% 3.45% 3.05% 2.98% Bank of Africa 0.94% 0.96% 1.30% 1.07% 1.85% 97% Development Bank of Kenya 0.11% 0.08% 0.08% 0.11% 0.10% -9% Diamond Trust 3.92% 3.90% 4.32% 5.26% 3.76% -4% NIC Bank 6.0% 2.75% 2.93% 2.82% 2.59% 2.59% Ecobank 0.27% 1.05% 1.01% 1.11% 1.31% 391% 12.63% Guardian Bank 0.23% 0.27% 0.20% 0.17% 0.14% -41% Stanbic Bank 18.15% 13.72% 13.97% 15.99% -12% I&M Bank 37.2% 2.90% 2.76% 2.65% 2.27% 2.12% Commercial Bank of Africa 7.00% 6.68% 6.95% 9.09% 7.98% 14% • HF Bank registered the highest rise in market share, from 0.01% of • Sidian Bank registered the highest rise in market share, from 0.06% of the Tier Aggregate 4.4% 73.80% 72.81% 70.34% 69.97% 70.72% NIC Bank 5.02% 5.02% 5.13% 4.28% 3.96% -21% the total industry Foreign Exchange Earnings in 2013 to 0.18% in 2017, total industry Foreign Exchange Earnings in 2013 to 0.41% in 2017 followed I&M Bank 2.64% 3.04% 4.28% 5.01% 4.97% 89% followed by Ecobank which increased its market share from 0.27% in by First Community which increased its market share from 0.19% in 2013 to 2013 to 1.31% in 2017 0.35% in 2017 • I&M registered the highest gain in market share, increasing 89% from 2.64% of the • Prime Bank reduced its market share the most, 53% from 1.53% in • Guardian Bank reduced its market share the most, 41% from 0.23% in 2013 total industry Foreign Exchange Earnings in 2013 to 4.97% in 2017, followed by Equity 2013 to 0.71% in 2017 followed by Bank of India which reduced its to 0.14% in 2017 followed by GT Bank which reduced its market share 32%, which increased its market share by 80% from 4.42% in 2013 to 7.94% in 2017 market share 30%, from 0.14% in 2013 to 0.10% in 2017 from 0.37% in 2013 to 0.25% in 2017 • NIC Bank lost the most in market share, 21% from 5.02% in 2013 to 3.96% in 2017 followed by StanChart which lost 14%, from 11.22% in 2013 to 9.63% in 2017 80 BANKING SURVEY | 2018 BANKING SURVEY | 2018 81 Market Share Analysis 2013- 2017 • UBA Kenya registered the highest rise in market share, from 0.04% of the total industry Foreign Exchange Earnings in 2013 to 0.22% in 2017, followed by Credit Bank which increased its market share from 0.07% in 2013 to 0.21% in 2017 • SBM Bank reduced its market share the most, 91% from 0.31% in 2013 to 0.03% in 2017 followed by Spire Bank reduced its market share 79% from 0.23% in 2013 to 0.05% in 2017 Tier IV Banks – General Administrative Expenses Market Share Trend 2013 2014 2015 2016 2017 % Change Credit Bank 0.41% 0.48% 0.52% 0.57% 0.61% 47% Consolidated Bank 1.81% 0.85% 0.89% 0.87% 0.81% -55% SBM Bank (Fidelity) 0.36% 0.36% 0.39% 0.39% 0.34% -8% Tier III Banks – General Administrative Expenses Market Share Trend Spire Bank 0.61% 0.63% 0.66% 0.63% 0.56% -7% 2013 2014 2015 2016 2017 % M Oriental Commercial Bank 0.21% 0.23% 0.22% 0.24% 0.27% 26% Change Trans-National Bank 0.47% 0.47% 0.48% 0.52% 0.47% -1% Gulf African Bank 0.80% 0.90% 1.05% 1.03% 1.03% 29% Paramount Universal Bank 0.17% 0.18% 0.20% 0.20% 0.19% 16% GT Bank Kenya 0.78% 0.76% 0.86% 0.78% 0.68% -12.40% UBA Kenya Ltd 0.43% 0.42% 0.37% 0.31% 0.31% -29% ABC Bank 0.72% 0.79% 0.73% 0.75% 0.77% 7% Middle East Bank 0.18% 0.19% 0.19% 0.19% 0.20% 13% Sidian Bank 0.69% 0.88% 0.92% 1.19% 1.03% 50% • Credit Bank registered the highest rise in market share, from 0.41% of the Habib A.G. Zurich 0.23% 0.23% 0.26% 0.28% 0.29% 25% total industry General Administrative Expenses in 2013 to 0.61% in 2017, First Community Bank 0.52% 0.66% 0.65% 0.60% 0.46% -12.41% followed by M Oriental which increased its market share from 0.21% in 2013 Development Bank of Kenya 0.21% 0.20% 0.20% 0.20% 0.19% -8% to 0.27% in 2017 • Consolidated Bank reduced its market share the most, 55% from 1.81% Guardian Bank 0.35% 0.37% 0.39% 0.40% 0.40% 16% in 2013 to 0.81% in 2017 followed by UBA Kenya reduced its market share Tariff Survey 2018 • Sidian Bank registered the highest rise in market share, from 29% from 0.43% in 2013 to 0.31% in 2017 0.69% of the total industry General Administrative Expenses in 2013 to 1.03% in 2017 followed by Gulf African which increased its market share from 0.80% in 2013 to 1.03% in 2017 • First Community reduced its market share the most from 0.52% in 2013 to 0.46% in 2017 followed by GT Bank which reduced its market share from 0.78% in 2013 to 0.68% in 2017 Banking Survey 2018 Tier IV Banks – Foreign Exchange Earnings Market Share Trend 2013 2014 2015 2016 2017 % Change Credit Bank 0.07% 0.09% 0.11% 0.15% 0.21% 220% Consolidated Bank 0.26% 0.21% 0.15% 0.13% 0.10% -60% SBM Bank (Fidelity) 0.31% 0.23% 0.22% 0.09% 0.03% -91% Tier IV Banks Spire Bank 0.23% 0.33% 0.24% 0.20% 0.05% -79% M Oriental Commercial 0.05% 0.08% 0.10% 0.04% 0.05% -1% Bank Trans-National Bank 0.28% 0.11% 0.15% 0.12% 0.11% -61% Paramount Universal 0.03% 0.05% 0.05% 0.05% 0.04% 6% Bank UBA Kenya Ltd 0.04% 0.09% 0.18% 0.34% 0.22% 429% Middle East Bank 0.19% 0.17% 0.17% 0.14% 0.10% -46% • General Administrative Expenses Market Share for Tier IV Banks has decreased from 5.30% in 2013 to 5.02% in 2017 82 BANKING SURVEY | 2018 BANKING SURVEY | 2018 83 Tariff Survey 2018 Tariff Survey 2018 § 15.0% indicated that they transact 5 to 10 times a week Frequency of Bank Deposits § 10.2% indicated that they transact more than 10 a week § Majority (52.0%) of the respondents make deposits 1 to 2 § 4.9% indicated that they do not transact at all times a month, 60.2% in Rural Arears compared to 48.3% in § 3.9% indicated that they transact infrequently, once every 3 Urban Areas to 6 months or in a year § 23.3% make deposits 3 to 4 times a month, 25.9% in Rural Areas compared to 17.4% in Urban Areas Amounts transacted § 5.6% (7.2% Rural; 4.8% Urban) make infrequent deposits § 20.8% indicated that they transacted between KSh 1,000 to ranging from 3 to 6 months or a year 2,000 in a week § 5.3% (6.7% Urban; 2.1% Rural) make deposits ranging from 5 § 17.8% indicated that they transacted between less than KSh Banking Tariff Survey 2018 to 10 times in a month, while 4.3% (5.8% Urban; 0.9% Rural) 1,000 in a week do so more than 10 times in a month § 13.4% indicated that they transacted between KSh 5,001 to 10,000 in a week Most Common Ways to Withdraw Money § 12.5% indicated that they transacted between KSh 2,001 to Banking from a Customer’s Perspective § “SME I” – Businesses with an annual turnover that is less § Majority (54.5%) of the respondents use an ATM to 3,000 in a week § In the Banking Survey 2013, Think Business Ltd set out than KSh 5 Million withdraw money from their bank accounts, 56.7% in Rural § 10.3% indicated that they transacted between KSh 3,001 to to present traditional banking data from a different § “SME II” – Businesses with an annual turnover that is less Arears compared to 53.6% in Urban Areas 4,000 in a week perspective - that of the average bank customer. We have than KSh 500 Million § 19.4% withdraw their money Over the Counter (23.2% Rural; § 10.0% indicated that they transacted between KSh 4,001 to maintained this tradition over the subsequent years, 17.7% Urban) 5,000 in a week publishing the Kenyan Banks Tariffs Survey in every issue Infotrak Consumer Research Study Findings § 15.0% use Mobile Banking to make withdrawals (17.4% § 6.9% indicated that they transacted between KSh 10,001 to of the annual Banking Survey. Think Business Ltd with the support of FSD Kenya Urban; 9.5% Rural) 20,000 in a week § In March 2016, as a precursor to the publication of the commissioned Infotrak to carry out research on trends of § 10.0% make their withdrawals through Agency Banking § 3.2% indicated that they transacted between KSh 20,001 to Banking Survey 2016 and the Banking Awards 2016 Gala, the average banking consumer. The study covered six major (10.7% Urban; 8.5% Rural) 30,000 in a week Think Business Ltd published a General Overview of the counties and had 1,093 respondents. § 1.5% of respondents indicated that they transacted findings from the Kenyan Banks Tariff Survey for 2016. We between KSh 30,001 to 40,000 in a week will be continuing with this trend this year, presenting a Frequency of Withdrawals Key Findings on the Average Bank Consumer § 1.4% of respondents indicated that they transacted § Majority (50.5%) of the respondents make withdrawals 1 to General Overview of the results of the Kenyan Banks Tariff Type of Bank Accounts between KSh 40,001 to 50,000 in a week Survey for 2018. 2 times a month, 52.7% of them from a Rural Location while § 1.4% indicated that they transacted between KSh 50,001 to 49.5% are from an Urban Location § The findings from the survey cover the Retail Banking and Type of bank account used § 100,000 in a week SME Banking sectors, with the thirty eight commercial 22.2% make withdrawals 3 to 4 times a month, 22.2% of § 83.2% of respondents operate Personal Bank Accounts § 0.8% indicated that they transacted between more than banks that are represented divided by tier for the purposes them Rural while 22.1% are from an Urban Location exclusively § KSh 100,000 in a week of this report, which is a peer review. 14.3% (16.5% Rural; 13.3% Urban) make infrequent § 7.1% of the respondents indicated that they operate SME § Think Business created model customers to represent withdrawals ranging from 3 to 6 months or a year Bank Accounts exclusively § Average Annual Cost of Banking 2014 to 2018 the average bank customer, projecting their needs so as 8.2% (9.9% Urban; 4.2% Rural) make withdrawals ranging § 9.7% of the respondents indicated operating a mix of from 5 to 10 times in a month, while 4.0% (4.6% Urban; Average Annual Cost of Banking (Overall) to calculate the annual cost of banking in the respective Personal & SME Bank Accounts banking sectors. 2.7% Rural) do so more than 10 times in a month § The banking tariffs used in this survey are all from the Operating of Bank Accounts individual banks’ General Tariff Guides. Mobile Money Consumer Trends Most Common Ways to Make Bank Deposits § We have not included any “bouquet” or specialized bank Preferred mobile money transfer service § Majority (53.9%) of the respondents make deposits Over accounts in this survey. § 97.1% of those interviewed indicated Mpesa as their the Counter, 69.6% of the respondents in Rural Arears while preferred mobile money transfer service, followed by Airtel 47.2% are Urban Model customers used to calculate annual cost Money 2.0%, Equitel 0.5% and YU Cash 0.1%. § 17.4% indicated that they make their deposits through § 0.4% of the respondents indicated that they do not have of banking: Agency Banking (18.0% Urban; 16.0% Rural) § Retail Banking Sector – An individual in formal any preferred mobile money transfer service. § 17.3% indicated that they use Mobile Banking to make their employment who is married and has two children of school deposits (21.1% Urban; 8.5% Rural) Average Cost of Banking 2014 - 18 going age. Frequency of mobile money transfers § 10.4% indicated that they use an ATM to make their § SME Banking Sector § 41.3% of the respondents indicated that they transacted 1 SME Banking deposits (12.6% Urban; 5.1% Rural) to 2 times a week The overall average cost of SME Banking has risen slightly, from § 24.8% indicated that they transact 3 to 4 times a week KSh 94,566 in 2014 to the current KSh 95,031 in 2018 84 BANKING SURVEY | 2018 BANKING SURVEY | 2018 85 Tariff Survey 2018 Tariff Survey 2018 Retail Banking to KSh 59,532 in 2018 Retail Banking Retail Banking The average annual cost of Retail Banking for Tier IV Banks has § The annual cost of banking in Tier II banks has not changed, The overall average cost of Retail Banking has also risen slightly, The average annual cost of Retail Banking for Tier II Banks has also increased, by 4.7% from KSh 11,691 in 2014 to the current KSh remaining at an average cost of KSh 55,397 in 2017 and 2018 from KSh 11,510 in 2014 to the current KSh 11,894 in 2018 also risen by 4.7% from KSh 11,116 in 2014 to the current KSh 12,138243 in 2018. § The annual cost of banking in Tier III banks has risen from KSh 11,643 in 2018 53,817 in 2017 to KSh 54,117 in 2018 Average Annual Cost of Banking 2014 - 18 – Tier Average Annual Cost of Banking – SME 1 (Tiers) § The annual cost of banking in Tier IV banks has increased by I Banks Average Annual Cost of Banking 2014 - 18 – Tier 2018 2017 2016 2015 2014 23.6% from KSh 42,617 in 2017 to KSh 52,678 in 2018 III Banks Tier 1 59,532 59,172 65,570 63,025 65,731 SME I Banking - Average Annual Cost by Tier Tier 11 55,397 55,397 74,994 73,787 72,991 Bank 2018 2017 Tier 111 54,117 53,817 56,298 46,732 48,356 Tier 1 Tier 1V 52,678 42,617 40,681 44,631 44,576 1 Kenya Commercial Bank 52,650 52,650 Overall Average 55,431 52,751 59,386 57,044 57,913 2 Co-operative Bank of Kenya 48,000 48,000 Cost 3 Equity Bank 47,250 47,250 4 Barclays Bank of Kenya 65,880 65,880 Average Annual Cost of Banking – SME 1I 5 Standard Chartered Bank 68,388 68,388 (Tiers) 6 Commercial Bank of Africa 65,400 61,800 Bank 2018 2017 2016 2015 2014 7 Stanbic Bank 76,920 76,920 Tier 1 129,925 129,565 137,723 133,932 140,400 8 Diamond Trust 55,059 55,059 Average Cost of Banking – Tier I Banks Tier 11 172,564 172,512 164,028 154,875 151,267 9 I&M Bank 51,960 51,960 SME Banking Tier 111 122,647 122,047 127,853 117,443 121,440 10 NIC Bank 63,810 63,810 The average annual cost of SME Banking for Tier I Banks has Average Cost of Banking – Tier III Banks Tier 1V 113,394 112,192 116,455 111,891 111,771 Average Cost 59,532 59,172 Overall Average Tier 11 been steadily declining, from a high of KSh 103,065 in 2014 to the SME Banking 134,632 134,079 136,515 129,535 131,219 Cost 11 National Bank of Kenya 63,150 63,150 current KSh 94,728 in 2018, an overall drop of 8.1% The average annual cost of SME Banking for Tier III Banks has 12 Chase Bank ® - - increased by 4.1% from KSh 84,898 in 2014 to the current KSh Average Annual Cost of Banking – Retail 13 Citibank - - Retail Banking 88,382 in 2017 14 Bank of Africa 56,160 56,160 Banking (Tiers) The average annual cost of Retail Banking for Tier I Banks has also 15 Bank of Baroda 69,150 69,150 Bank 2018 2017 2016 2015 2014 been declining, from KSh 11,606 in 2014 to the current KSh 10,728 16 Family Bank 48,000 48,000 Retail Banking Tier 1 10,728 10,626 12,290 12,027 11,606 17 HF Bank 47,100 47,100 in 2018, an overall decrease of 7.6% The average annual cost of Retail Banking for Tier III Banks has Tier 11 13,175 13,161 15,038 16,184 15,949 18 Imperial Bank ® - - also increased by 11.5% from KSh 11,626 in 2014 to the current KSh Tier 111 12,962 13,289 13,314 13,239 11,626 19 Prime Bank 54,000 54,000 Tier 1V 12,243 12,707 12,680 11,747 11,691 Average Annual Cost of Banking 2014 - 18 – Tier 12,962 in 2018 20 Ecobank 50,220 50,220 Overall Average II Banks 12,277 12,446 13,330 13,299 12,718 Average Cost 55,397 55,397 Cost Average Annual Cost of Banking – Tier IV Banks Tier 111 21 Bank of India 48,060 48,060 22 GT Bank Kenya 53,400 53,400 23 ABC Bank 39,600 36,900 24 Gulf African Bank 59,796 59,796 25 Victoria Commercial Bank 53,400 53,400 26 Development Bank of Kenya 55,350 55,350 27 SBM Bank Ltd 59,844 59,844 28 Sidian Bank 48,120 48,120 29 Jamii Bora Bank 69,480 69,480 Average Cost 54,117 53,817 Average Cost of Banking – Tier II Banks Average Cost of Banking – Tier IV Banks SME Banking SME Banking The average annual cost of SME Banking for Tier II Banks has risen The average annual cost of SME Banking for Tier IV Banks has SME I Banking – Average Annual Cost during the period, from KSh 112,129 in 2014 to the current KSh § increased by 6.2% from KSh 78,173 in 2014 to the current KSh The annual cost of banking for our model customer in Tier I 113,980 in 2018 83,036 in 2018 banks has risen slightly, from an average of KSh 59,172 in 2017 86 BANKING SURVEY | 2018 BANKING SURVEY | 2018 87 Tariff Survey 2018 Tariff Survey 2018 SME I Banking - Calculation of Annual Cost 33 National Industrial Credit Bank Ltd 350 30 365 300 300 14 Tier 1V 34 Paramount-Universal Bank Ltd 250 15 200 300 - 10 Key Indicators 35 Prime Bank Ltd 750 30 - 500 - 10 Product Used Monthly Annual 36 SBM Bank Ltd 500 28 500 400 28 15 30 Guardian Bank 46,050 46,050 50 Leaf Cheque Book 6 37 Sidian Bank Ltd 300 30 440 110 110 18 31 Consolidated Bank 43,170 43,170 Counter Withdrawals 4 48 38 Spire Bank 300 30 300 300 100 16 32 Habib A.G. Zurich 70,296 70,296 Banker’s Cheques 4 48 39 Stanbic Bank Limited 400 40 300 680 60 18 33 Paramount Universal Bank 34,200 34,200 Standing Order 2 24 40 Standard Chartered Bank Ltd 999 40 250 500 - 8 34 Trans-National Bank 61,800 61,800 Charge Per Transaction 50 600 41 Transnational Bank Ltd 300 30 250 600 50 10 35 Mayfair Bank 53,700 - Ledger Fees 1 12 36 DIB Bank 62,100 - 42 UBA Kenya Bank 300 25 150 200 100 10 37 Credit Bank 42,600 42,600 43 Victoria Commercial Bank Ltd 500 25 500 350 - 12 38 Spire Bank 52,800 52,800 The annual cost has been calculated by multiplying the annual usage of each of the key indicators by the tariff that the banks charge for 39 First Community Bank 71,700 71,700 the products. 40 M Oriental Commercial Bank 51,000 51,000 41 Middle East Bank 55,800 55,800 SME I Banking - Annual Cost 42 UBA Kenya Ltd 39,600 24,600 Banker’s Cheque Counter W/draw Cheque Book Per Bank Annual Cost Ledger Fee Charge Per Trans Stand/ Order Chg 43 Dubai Bank ® - - Charge Charge Leaf Average Cost 52,678 42,617 1 African Banking Corporation Ltd 39,600 6,000 18,000 12,000 - - 3,600 2 Bank of Africa 56,160 6,600 21,000 4,800 9,600 10,560 3,600 3 Bank of Baroda (K) Ltd 69,150 6,000 15,000 12,000 24,000 9,600 2,550 SME Banking Tariffs 2018 4 Bank of India 48,060 6,000 15,000 12,000 10,560 - 4,500 Standing Order Banker’s Cheque Counter W/drl Cheque Book Bank Ledger Fee Charge Per Trans 5 Barclays Bank of Kenya Ltd 65,880 5,280 24,000 10,080 7,200 14,880 4,440 Charge Charge Charge Charge 6 Chase Bank Ltd ® ------1 African Banking Corporation Ltd 500 30 500 - - 12 7 Citibank, N.A ------2 Bank of Africa 550 35 200 200 220 12 8 Commercial Bank of Africa 65,400 7,200 24,000 7,200 24,000 - 3,000 3 Bank of Baroda (K) Ltd 500 25 500 500 200 9 9 Consolidated Bank of Kenya Ltd 43,170 4,320 18,000 8,400 7,200 - 5,250 10 Co-operative Bank of Kenya 48,000 3,600 21,000 6,000 9,600 4,800 3,000 4 Bank of India 500 25 500 220 - 15 11 Credit Bank Limited 42,600 4,200 18,000 4,800 12,000 - 3,600 5 Barclays Bank of Kenya Ltd 440 40 420 150 310 15 12 Development Bank of Kenya Ltd 55,350 4,800 18,000 4,800 24,000 - 3,750 6 Chase Bank Ltd ® ------13 Diamond Trust Bank Kenya Ltd 55,059 - 19,800 9,600 19,200 1,584 4,875 7 Citibank, N.A ------14 Dubai Bank Ltd ® ------8 Commercial Bank of Africa 600 40 300 500 - 10 15 DIB Bank Kenya Ltd 62,100 12,000 18,000 6,000 12,000 9,600 4,500 9 Consolidated Bank of Kenya Ltd 360 30 350 150 - 18 16 Eco-Bank 50,220 4,200 18,000 6,000 7,920 9,600 4,500 10 Co-operative Bank of Kenya 300 35 250 200 100 10 17 Equity Bank Limited 47,250 - 30,000 7,200 4,800 - 5,250 11 Credit Bank Limited 350 30 200 250 - 12 18 Family Bank Ltd 48,000 6,000 21,000 7,200 4,800 4,800 4,200 19 First Community Bank 71,700 12,000 30,000 6,000 9,600 9,600 4,500 12 Development Bank of Kenya Ltd 400 30 200 500 - 13 20 GT Bank Ltd 53,400 6,600 18,000 7,200 16,800 - 4,800 13 Diamond Trust Bank Kenya Ltd - 33 400 400 33 16 21 Guardian Bank Ltd 46,050 6,000 12,000 6,000 16,800 - 5,250 14 Dubai Bank Ltd ® ------22 Gulf African Bank 59,796 8,400 18,000 7,200 12,000 9,696 4,500 15 DIB Bank Kenya Ltd 1,000 30 250 250 200 15 23 Habib AG Zurich 70,296 3,996 21,000 12,000 28,800 - 4,500 16 Eco-Bank 350 30 250 165 200 15 24 HF Bank Ltd 47,100 3,600 21,000 6,000 7,200 4,800 4,500 17 Equity Bank Limited - 50 300 100 - 18 25 I & M Bank 51,960 3,000 12,000 8,400 24,000 960 3,600 18 Family Bank Ltd 500 35 300 100 100 14 26 Imperial Bank Ltd ® ------27 Jamii Bora Bank 69,480 4,800 36,000 13,200 7,200 5,280 3,000 19 First Community Bank 1,000 50 250 200 200 15 28 Kenya Commercial Bank Ltd 52,650 4,200 21,000 6,000 9,600 9,600 2,250 20 GT Bank Ltd 550 30 300 350 - 16 29 Mayfair Bank Ltd 53,700 6,000 12,000 7,200 24,000 - 4,500 21 Guardian Bank Ltd 500 20 250 350 - 18 30 Middle East Bank of Kenya Ltd 55,800 6,000 18,000 7,200 19,200 - 5,400 22 Gulf African Bank 700 30 300 250 202 15 31 M Oriental Commercial Bank 51,000 - 15,000 7,200 19,200 4,800 4,800 23 Habib AG Zurich 333 35 500 600 - 15 32 National Bank of Kenya Ltd 63,150 7,200 21,000 7,200 14,400 9,600 3,750 24 HF Bank Ltd 300 35 250 150 100 15 33 National Industrial Credit Bank Ltd 63,810 4,200 18,000 8,760 14,400 14,400 4,050 25 I & M Bank 250 20 350 500 20 12 34 Paramount-Universal Bank Ltd 34,200 3,000 9,000 4,800 14,400 - 3,000 35 Prime Bank Ltd 54,000 9,000 18,000 - 24,000 - 3,000 26 Imperial Bank Ltd ® ------36 SBM Bank Ltd 59,844 6,000 16,800 12,000 19,200 1,344 4,500 27 Jamii Bora Bank 400 60 550 150 110 10 37 Sidian Bank Ltd 48,120 3,600 18,000 10,560 5,280 5,280 5,400 28 Kenya Commercial Bank Ltd 350 35 250 200 200 8 38 Spire Bank 52,800 3,600 18,000 7,200 14,400 4,800 4,800 29 Mayfair Bank Ltd 500 20 300 500 - 15 39 Stanbic Bank Limited 76,920 4,800 24,000 7,200 32,640 2,880 5,400 30 Middle East Bank of Kenya Ltd 500 30 300 400 - 18 40 Standard Chartered Bank Ltd 68,388 11,988 24,000 6,000 24,000 - 2,400 31 M Oriental Commercial Bank - 25 300 400 100 16 41 Transnational Bank Ltd 61,800 3,600 18,000 6,000 28,800 2,400 3,000 32 National Bank of Kenya Ltd 600 35 300 300 200 13 42 UBA Kenya Bank 39,600 3,600 15,000 3,600 9,600 4,800 3,000 43 Victoria Commercial Bank Ltd 53,400 6,000 15,000 12,000 16,800 - 3,600 88 BANKING SURVEY | 2018 BANKING SURVEY | 2018 89 Tariff Survey 2018 Tariff Survey 2018 SME Banking Tariffs 2018 SME II Banking Sector Tier 11 Charge Per Standing Order Banker’s Counter W/drl Cheque Book 11 National Bank of Kenya 133,500 133,500 Bank Ledger Fee In this section we set out to establish the Annual Cost of Trans Charge Cheque Charge Charge Charge 12 Chase Bank ® - - Banking for our model customer, a small to medium sized 1 African Banking Corporation Ltd 500 30 500 - - 12 13 Citibank - - business enterprise with an annual turnover of less than KSh 2 Bank of Africa 550 35 200 200 220 12 14 Bank of Africa 115,320 115,320 500Million. 3 Bank of Baroda (K) Ltd 500 25 500 500 200 9 15 Bank of Baroda 156,300 156,300 4 Bank of India 500 25 500 220 - 15 SME II Banking - Average Annual Cost by Tier 16 Family Bank 104,400 104,400 5 Barclays Bank of Kenya Ltd 440 40 420 150 310 15 17 HF Bank 102,600 102,600 6 Chase Bank Ltd ® ------18 Imperial Bank ® - - 7 Citibank, N.A ------19 Prime Bank 99,000 99,000 8 Commercial Bank of Africa 600 40 300 500 - 10 20 Ecobank 108,240 108,240 9 Consolidated Bank of Kenya Ltd 360 30 350 150 - 18 Average Cost 172,564 172,512 10 Co-operative Bank of Kenya 300 35 250 200 100 10 Tier 111 11 Credit Bank Limited 350 30 200 250 - 12 21 Bank of India 114,120 114,120 12 Development Bank of Kenya Ltd 400 30 200 500 - 13 22 GT Bank Kenya 114,600 114,600 13 Diamond Trust Bank Kenya Ltd - 33 400 400 33 16 23 ABC Bank 97,200 91,800 14 Dubai Bank Ltd ® ------24 Gulf African Bank 125,592 125,592 15 DIB Bank Kenya Ltd 1,000 30 250 250 200 15 25 Victoria Commercial Bank 124,800 124,800 16 Eco-Bank 350 30 250 165 200 15 26 Development Bank of Kenya 115,500 115,500 17 Equity Bank Limited - 50 300 100 - 18 27 SBM Bank Ltd 137,688 137,688 SME II Banking – Average Annual Cost 18 Family Bank Ltd 500 35 300 100 100 14 28 Sidian Bank 113,760 113,760 19 First Community Bank 1,000 50 250 200 200 15 § The annual cost of banking for our model customer in Tier I 29 Jamii Bora Bank 160,560 160,560 20 GT Bank Ltd 550 30 300 350 - 16 banks has risen slightly, from an average of KSh 129,565 in 2017 Average Cost 122,647 122,047 21 Guardian Bank Ltd 500 20 250 350 - 18 to KSh 129,925 in 2018 Tier 1V 22 Gulf African Bank 700 30 300 250 202 15 § 30 Guardian Bank 98,100 98,100 The annual cost of banking in Tier II banks has also risen 23 Habib AG Zurich 333 35 500 600 - 15 31 Consolidated Bank 98,820 98,820 slightly, from an average of KSh 172,512 in 2017 to KSh 172,564 24 HF Bank Ltd 300 35 250 150 100 15 32 Habib A.G. Zurich 160,596 160,596 in 2018 25 I & M Bank 250 20 350 500 20 12 33 Paramount Universal Bank 75,000 75,000 § The annual cost of banking in Tier III banks has risen slightly, 26 Imperial Bank Ltd ® ------34 Trans-National Bank 132,000 132,000 from an average of KSh 122,047 in 2017 to KSh 122,647 in 2018 27 Jamii Bora Bank 400 60 550 150 110 10 35 Mayfair Bank 115,800 - 28 Kenya Commercial Bank Ltd 350 35 250 200 200 8 § The annual cost of banking in Tier IV banks has risen from an 36 DIB Bank 124,200 - 29 Mayfair Bank Ltd 500 20 300 500 - 15 average of KSh 112,192 in 2017 to KSh 113,394 in 2018 37 Credit Bank 90,600 90,600 30 Middle East Bank of Kenya Ltd 500 30 300 400 - 18 38 Spire Bank 116,400 116,400 31 M Oriental Commercial Bank - 25 300 400 100 16 39 First Community Bank 143,400 143,400 SME II Banking - Average Annual Cost by Tier 32 National Bank of Kenya Ltd 600 35 300 300 200 13 40 M Oriental Commercial Bank 116,400 116,400 Bank 2018 2017 33 National Industrial Credit Bank Ltd 350 30 365 300 300 14 41 Middle East Bank 120,000 120,000 Tier 1 34 Paramount-Universal Bank Ltd 250 15 200 300 - 10 42 UBA Kenya Ltd 82,800 82,800 1 Kenya Commercial Bank 113,100 113,100 35 Prime Bank Ltd 750 30 - 500 - 10 43 Dubai Bank ® - - 2 Co-operative Bank of Kenya 104,400 104,400 36 SBM Bank Ltd 500 28 500 400 28 15 Average Cost 113,394 112,192 3 Equity Bank 108,900 108,900 37 Sidian Bank Ltd 300 30 440 110 110 18 4 Barclays Bank of Kenya 146,640 146,640 SME II Banking - Calculation of Annual Cost 38 Spire Bank 300 30 300 300 100 16 5 Standard Chartered Bank 136,788 136,788 39 Stanbic Bank Limited 400 40 300 680 60 18 Key Indicators 6 Commercial Bank of Africa 138,000 134,400 40 Standard Chartered Bank Ltd 999 40 250 500 - 8 Product Used Monthly Annual 7 Stanbic Bank 163,440 163,440 41 Transnational Bank Ltd 300 30 250 600 50 10 50 Leaf Cheque Book 1 12 8 Diamond Trust 129,318 129,318 42 UBA Kenya Bank 300 25 150 200 100 10 Counter Withdrawals 8 96 9 I&M Bank 117,720 117,720 43 Victoria Commercial Bank Ltd 500 25 500 350 - 12 Banker’s Cheques 8 96 10 NIC Bank 140,940 140,940 Standing Order 8 96 Average Cost 129,925 129,565 Charge Per Transaction 100 1200 The annual cost has been calculated by multiplying the annual usage of each of the key indicators by the tariff that the banks charge for Ledger Fees 1 12 the products. 90 BANKING SURVEY | 2018 BANKING SURVEY | 2018 91 Tariff Survey 2018 Tariff Survey 2018 Banking Tariff Survey 2018 - Results Equity Bank Limited 1 8 9 SME II Banking - Calculation of Annual Cost Category Name of Bank Family Bank Ltd 2 8 10 Banker’s Bank with the Lowest Charges Overall ABC Bank Ltd First Community Bank 5 30 35 Charge Per Counter W/ Cheque Book Bank Annual Cost Ledger Fee S/O Charge Cheque Bank with the Lowest Charges - SME Paramount - Universal Bank Ltd GT Bank Ltd 4 13 17 Trans drl Charge Per Leaf Charge Banking Guardian Bank Ltd 1 5 6 African Banking Corporation Bank with the Lowest Charges - Retail Equity Bank Ltd Gulf African Bank 3 22 25 1 97,200 6,000 36,000 48,000 - - 7,200 Ltd Banking Habib AG Zurich 5 32 37 2 Bank of Africa 115,320 6,600 42,000 19,200 19,200 21,120 7,200 Bank with the Most Improved Ranking Bank of Baroda, Barclays Bank, HF Bank Ltd 1 6 7 3 Bank of Baroda (K) Ltd 156,300 6,000 30,000 48,000 48,000 19,200 5,100 – SME Banking First Community Bank, Habib AG I & M Bank 4 14 18 Zurich and Jamii Bora 4 Bank of India 114,120 6,000 30,000 48,000 21,120 - 9,000 Jamii Bora Bank 5 31 36 Bank with the Most Improved Ranking - Middle East Bank Ltd 5 Barclays Bank of Kenya Ltd 146,640 5,280 48,000 40,320 14,400 29,760 8,880 Kenya Commercial Bank Ltd 3 12 15 Retail Banking 6 Chase Bank Ltd ® ------M Oriental Commercial Bank 3 13 16 7 Citibank, N.A ------Mayfair Bank Ltd - 16 - 8 Commercial Bank of Africa 138,000 7,200 48,000 28,800 48,000 - 6,000 Tariff Survey Comparison – 2017 / 2018 Middle East Bank of Kenya Ltd 3 20 23 Consolidated Bank of Kenya In this section we set out to compare the results of the National Bank of Kenya Ltd 3 26 29 9 98,820 4,320 36,000 33,600 14,400 - 10,500 Ltd tariff survey for 2017 with those of the current tariff National Industrial Credit Bank Ltd 3 27 30 10 Co-operative Bank of Kenya 104,400 3,600 42,000 24,000 19,200 9,600 6,000 survey for 2018. Paramount-Universal Bank Ltd 1 1 2 11 Credit Bank Limited 90,600 4,200 36,000 19,200 24,000 - 7,200 Prime Bank Ltd 3 11 14 Development Bank of Kenya SBM Bank Ltd 3 25 28 12 115,500 4,800 36,000 19,200 48,000 - 7,500 SME Banking Sector Ltd Sidian Bank Ltd 3 10 13 13 Diamond Trust Bank Kenya Ltd 129,318 - 39,600 38,400 38,400 3,168 9,750 Spire Bank 4 15 19 14 Dubai Bank Ltd ® ------Stanbic Bank Limited 5 33 38 15 DIB Bank Kenya Ltd 124,200 12,000 36,000 24,000 24,000 19,200 9,000 Standard Chartered Bank Ltd 4 27 31 16 Eco-Bank 108,240 4,200 36,000 24,000 15,840 19,200 9,000 Transnational Bank Ltd 2 24 26 17 Equity Bank Limited 108,900 - 60,000 28,800 9,600 - 10,500 UBA Kenya Bank (1) 2 1 18 Family Bank Ltd 104,400 6,000 42,000 28,800 9,600 9,600 8,400 Victoria Commercial Bank Ltd 1 19 20 19 First Community Bank 143,400 12,000 60,000 24,000 19,200 19,200 9,000 20 GT Bank Ltd 114,600 6,600 36,000 28,800 33,600 - 9,600 Retail Banking Sector 21 Guardian Bank Ltd 98,100 6,000 24,000 24,000 33,600 - 10,500 22 Gulf African Bank 125,592 8,400 36,000 28,800 24,000 19,392 9,000 23 Habib AG Zurich 160,596 3,996 42,000 48,000 57,600 - 9,000 24 HF Bank Ltd 102,600 3,600 42,000 24,000 14,400 9,600 9,000 25 I & M Bank 117,720 3,000 24,000 33,600 48,000 1,920 7,200 26 Imperial Bank Ltd ® ------27 Jamii Bora Bank 160,560 4,800 72,000 52,800 14,400 10,560 6,000 Bank of Baroda, Barclays Bank, First Community Bank, 28 Kenya Commercial Bank Ltd 113,100 4,200 42,000 24,000 19,200 19,200 4,500 Habib AG Zurich and Jamii Bora all gained 5 positions in 29 Mayfair Bank Ltd 115,800 6,000 24,000 28,800 48,000 - 9,000 rank in 2018 from 2017. Middle East Bank of Kenya 30 120,000 6,000 36,000 28,800 38,400 - 10,800 SME Ranking Table – Ranking Comparison 2017 / Ltd 2018 31 M Oriental Commercial Bank 116,400 - 30,000 28,800 38,400 9,600 9,600 Gain/ 32 National Bank of Kenya Ltd 133,500 7,200 42,000 28,800 28,800 19,200 7,500 Bank 2018 2017 Loss National Industrial Credit 33 140,940 4,200 36,000 35,040 28,800 28,800 8,100 Bank Ltd African Banking Corporation Ltd - 3 3 34 Paramount-Universal Bank Ltd 75,000 3,000 18,000 19,200 28,800 - 6,000 Bank of Africa 4 18 22 35 Prime Bank Ltd 99,000 9,000 36,000 - 48,000 - 6,000 Bank of Baroda (K) Ltd 5 29 34 Middle East Bank is the bank with the Most Improved 36 SBM Bank Ltd 137,688 6,000 33,600 48,000 38,400 2,688 9,000 Bank of India 2 10 12 37 Sidian Bank Ltd 113,760 3,600 36,000 42,240 10,560 10,560 10,800 Barclays Bank of Kenya Ltd 5 28 33 Performance in Retail Banking having gained 18 positions th 38 Spire Bank 116,400 3,600 36,000 28,800 28,800 9,600 9,600 Commercial Bank of Africa - 27 27 from being ranked 37 in 2017 to its current ranking of 39 Stanbic Bank Limited 163,440 4,800 48,000 28,800 65,280 5,760 10,800 Consolidated Bank of Kenya Ltd - 5 5 19th in 2018. Co-operative Bank of Kenya 1 7 8 40 Standard Chartered Bank Ltd 136,788 11,988 48,000 24,000 48,000 - 4,800 M Oriental is the bank with the Largest Drop in Credit Bank Limited - 4 4 41 Transnational Bank Ltd 132,000 3,600 36,000 24,000 57,600 4,800 6,000 Performance in Retail Banking having dropped 17 positions Development Bank of Kenya Ltd 4 17 21 42 UBA Kenya Bank 82,800 3,600 30,000 14,400 19,200 9,600 6,000 21st Diamond Trust Bank Kenya Ltd 3 21 24 from being ranked in 2017 to its current ranking of 43 Victoria Commercial Bank Ltd 124,800 6,000 30,000 48,000 33,600 - 7,200 th DIB Bank Kenya Ltd - 23 - 38 in 2018. Eco-Bank 2 9 11 92 BANKING SURVEY | 2018 BANKING SURVEY | 2018 93 Tariff Survey 2018 Tariff Survey 2018 Average Cost - Banks with the Lowest Charges “SME I” Rank Bank 2018 2017 2016 2015 2014 33 Sidian Bank Ltd (1) 23 22 1 Paramount-Universal Bank Ltd 34,200 34,200 34,200 34,200 34,200 34 Spire Bank (1) 36 35 2 African Banking Corporation Ltd 39,600 36,900 41,700 36,900 57,900 35 Stanbic Bank Limited (1) 32 31 2 UBA Kenya Bank 39,600 24,600 24,600 24,600 24,600 36 Standard Chartered Bank Ltd - 2 2 3 Credit Bank Limited 42,600 42,600 47,400 47,400 47,400 37 Transnational Bank Ltd (1) 24 23 4 Consolidated Bank of Kenya Ltd 43,170 43,170 44,400 44,400 43,680 38 UBA Kenya Bank (1) 5 4 Average Cost 39,834 36,294 38,460 37,500 41,556 39 Victoria Commercial Bank Ltd 1 10 11 Overall Average Cost – “SME I” Bank 2018 2017 2016 2015 2014 2. Tariff Survey Comparison – 2014 to 2018 1 African Banking Corporation Ltd 39,600 36,900 41,700 36,900 57,900 SME Banking Sector 2 Bank of Africa 56,160 56,160 55,200 55,200 55,200 2.1 SME I Banking - Annual Cost Comparison 2014 to 3 Bank of Baroda (K) Ltd 69,150 69,150 58,950 58,950 50,100 2018 4 Bank of India 48,060 48,060 48,510 48,510 47,100 5 Barclays Bank of Kenya Ltd 65,880 65,880 65,880 79,050 79,050 6 Chase Bank Ltd ® - - 52,950 54,750 54,750 7 Citibank, N.A - - - - - 8 Commercial Bank of Africa 65,400 61,800 80,400 80,400 87,600 9 Consolidated Bank of Kenya Ltd 43,170 43,170 44,400 44,400 43,680 1.2 Retail Ranking Table - Ranking Comparison 2017 10 Co-operative Bank of Kenya 48,000 48,000 48,000 48,000 48,000 / 2018 11 Credit Bank Limited 42,600 42,600 47,400 47,400 47,400 Bank Gain/Loss 2018 2017 12 Development Bank of Kenya Ltd 55,350 55,350 - - - 1 African Banking Corporation Ltd 4 3 7 13 Diamond Trust Bank Kenya Ltd 55,059 55,059 55,140 59,700 58,200 2 Bank of Africa (1) 25 24 14 Dubai Bank Ltd ® - - - 53,400 53,400 3 Bank of Baroda (K) Ltd 1 14 15 15 DIB Bank Kenya Ltd 62,100 - - - - 4 Bank of India (1) 39 38 16 Eco-Bank 50,220 50,220 50,220 50,220 49,500 5 Barclays Bank of Kenya Ltd - 8 8 17 Equity Bank Limited 47,250 47,250 61,650 20,190 18,750 The chart above sets out to compare the average cost for 6 Commercial Bank of Africa (5) 15 10 18 Family Bank Ltd 48,000 48,000 45,600 45,600 45,600 all of the banks Average Cost (Overall) to that of the banks 7 Consolidated Bank of Kenya Ltd - 18 18 19 First Community Bank 71,700 71,700 59,844 59,844 59,844 Average Cost (Banks with the 8 Co-operative Bank of Kenya (1) 6 5 with the lowest charges 20 GT Bank Ltd 53,400 53,400 71,700 47,220 47,220 9 Credit Bank Limited 1 13 14 lowest charges) from 2014 to 2018. 21 Guardian Bank Ltd 46,050 46,050 39,000 39,000 39,000 10 Development Bank of Kenya Ltd - 9 9 2.1 SME II Banking - Annual Cost Comparison 2014 to 22 Gulf African Bank 59,796 59,796 53,400 53,400 53,400 23 Habib AG Zurich 70,296 70,296 48,450 46,410 46,410 11 Diamond Trust Bank Kenya Ltd (1) 27 26 2018 12 DIB Bank Kenya Ltd - 4 - 24 HF Bank Ltd 47,100 47,100 60,396 60,396 60,396 13 Eco-Bank 1 11 12 25 I & M Bank 51,960 51,960 70,296 70,296 70,296 14 Equity Bank Limited - 1 1 26 Imperial Bank Ltd ® - - 72,600 72,600 72,600 15 Family Bank Ltd (1) 21 20 27 Jamii Bora Bank 69,480 69,480 58,710 20,700 20,700 16 First Community Bank (1) 20 19 28 Kenya Commercial Bank Ltd 52,650 52,650 66,000 60,000 60,000 17 GT Bank Ltd (1) 37 36 29 Mayfair Bank Ltd 53,700 - - - - 18 Guardian Bank Ltd (1) 28 27 30 Middle East Bank of Kenya Ltd 55,800 55,800 55,800 55,800 55,800 19 Gulf African Bank (1) 33 32 31 M Oriental Commercial Bank 51,000 51,000 60,555 60,555 60,555 20 Habib AG Zurich (1) 26 25 32 National Bank of Kenya Ltd 63,150 63,150 53,550 50,100 50,100 National Industrial Credit Bank 21 HF Bank - 16 16 33 63,810 63,810 54,210 47,550 47,550 22 I & M Bank 1 12 13 Ltd 23 Jamii Bora Bank (1) 34 33 34 Paramount-Universal Bank Ltd 34,200 34,200 34,200 34,200 34,200 35 Prime Bank Ltd 54,000 54,000 35,400 35,400 35,100 24 Kenya Commercial Bank Ltd - 17 17 The chart above sets out to compare the average cost for 36 SBM Bank Ltd 59,844 59,844 59,844 59,844 59,844 25 Mayfair Bank Ltd - 22 - all of the banks Average Cost (Overall) to that of the banks 26 Middle East Bank of Kenya Ltd 18 19 37 37 Sidian Bank Ltd 48,120 48,120 63,120 53,880 53,880 with the lowest charges Average Cost (Banks with the lowest 27 M Oriental Commercial Bank (17) 38 21 38 Spire Bank 52,800 52,800 52,800 52,800 52,800 charges) from 2014 to 2018. 28 National Bank of Kenya Ltd (1) 31 30 39 Stanbic Bank Limited 76,920 76,920 83,640 95,760 95,760 29 National Industrial Credit Bank Ltd (1) 29 28 40 Standard Chartered Bank Ltd 68,388 68,388 70,488 69,300 92,100 30 Paramount-Universal Bank Ltd (1) 30 29 41 Transnational Bank Ltd 61,800 61,800 61,800 61,800 61,800 31 Prime Bank Ltd (1) 7 6 42 UBA Kenya Bank 39,600 24,600 24,600 24,600 24,600 32 SBM Bank Ltd (1) 35 34 43 Victoria Commercial Bank Ltd 53,400 53,400 53,400 53,400 46,800 Average Annual Cost 55,255 54,537 55,784 53,013 53,769 94 BANKING SURVEY | 2018 BANKING SURVEY | 2018 95 Tariff Survey 2018 Tariff Survey 2018 2.2 SME Banking - Annual Ranking Comparison 2014 to 2018 Average Cost - Banks with the Lowest Charges “SME II” Bank 2018 2017 2016 2015 2014 Rank Bank 2018 2017 2016 2015 2014 Paramount-Universal Bank Ltd 1 2 2 4 4 1 Paramount-Universal Bank Ltd 75,000 75,000 75,000 75,000 75,000 UBA Kenya Bank 2 1 1 3 2 2 UBA Kenya Bank 82,800 82,800 82,800 82,800 82,800 African Banking Corporation Ltd 3 3 5 6 30 3 Credit Bank Limited 90,600 90,600 104,400 104,400 104,400 Credit Bank Limited 3 4 7 13 11 4 African Banking Corporation Ltd 97,200 91,800 101,400 96,600 138,600 Consolidated Bank of Kenya Ltd 4 5 7 8 10 5 Guardian Bank Ltd 98,100 98,100 102,900 97,860 97,860 Guardian Bank Ltd 4 6 10 11 7 Average Cost 88,740 87,660 93,300 91,332 99,732 Overall Average Cost – “SME II” SME Banking - Annual Ranking Comparison 2014 to 2018 2018 2017 2016 2015 2014 Bank 2018 2017 2016 2015 2014 1 African Banking Corporation Ltd 97,200 91,800 101,400 96,600 138,600 1 African Banking Corporation Ltd 3 3 5 6 30 2 Bank of Africa 115,320 115,320 113,400 113,400 113,400 2 Bank of Africa 18 22 18 25 22 3 Bank of Baroda (K) Ltd 156,300 156,300 138,300 138,300 101,400 3 Bank of Baroda (K) Ltd 29 34 26 28 13 4 Bank of India 114,120 114,120 115,020 115,020 112,200 4 Bank of India 10 12 13 16 16 5 Barclays Bank of Kenya Ltd 146,640 146,640 146,640 175,860 175,860 5 Barclays Bank of Kenya Ltd 28 33 32 38 36 6 Chase Bank Ltd ® - - 117,900 119,700 119,700 6 Commercial Bank of Africa 27 27 38 39 37 7 Citibank, N.A - - - - - 7 Consolidated Bank of Kenya Ltd 5 5 7 8 10 8 Commercial Bank of Africa 138,000 134,400 168,000 168,000 196,800 8 Co-operative Bank of Kenya 7 8 10 15 13 9 Consolidated Bank of Kenya Ltd 98,820 98,820 108,000 108,000 106,560 9 Credit Bank Limited 4 4 7 13 11 10 Co-operative Bank of Kenya 104,400 104,400 104,400 104,400 104,400 10 Development Bank of Kenya Ltd 17 21 - - - 11 Credit Bank Limited 90,600 90,600 104,400 104,400 104,400 11 Diamond Trust Bank Kenya Ltd 21 24 22 29 27 12 Development Bank of Kenya Ltd 115,500 115,500 - - - 12 DIB Bank Kenya Ltd 23 - - - - 13 Diamond Trust Bank Kenya Ltd 129,318 129,318 134,280 131,400 128,400 13 Eco-Bank 9 11 12 18 18 14 Dubai Bank Ltd ® - - - 118,800 118,800 14 Equity Bank Limited 8 9 29 1 1 15 DIB Bank Kenya Ltd 124,200 - - - - 15 Family Bank Ltd 8 10 6 10 8 16 Eco-Bank 108,240 108,240 108,240 108,240 106,800 16 First Community Bank 30 35 14 20 19 17 Equity Bank Limited 108,900 108,900 137,700 56,220 51,900 17 GT Bank Ltd 13 17 4 7 6 18 Family Bank Ltd 104,400 104,400 102,000 102,000 102,000 18 Guardian Bank Ltd 5 6 10 11 7 19 First Community Bank 143,400 143,400 143,400 91,320 91,320 19 Gulf African Bank 22 25 24 32 28 20 GT Bank Ltd 114,600 114,600 114,600 114,600 114,600 20 Habib AG Zurich 32 37 36 36 34 21 Guardian Bank Ltd 98,100 98,100 102,900 97,860 97,860 21 HF Bank Ltd 6 7 23 2 2 22 Gulf African Bank 125,592 125,592 126,192 126,192 126,192 22 I & M Bank 14 18 30 31 29 23 Habib AG Zurich 160,596 160,596 160,596 160,596 160,596 23 Jamii Bora Bank 31 36 34 9 12 24 HF Bank Ltd 102,600 102,600 127,020 53,400 53,400 24 Kenya Commercial Bank Ltd 12 15 7 27 26 25 I & M Bank 117,720 117,720 142,800 130,800 130,800 25 M Oriental Commercial Bank 13 16 26 33 32 26 Imperial Bank Ltd ® - - - 193,800 193,800 26 Mayfair Bank Ltd 16 - - - - 27 Jamii Bora Bank 160,560 160,560 159,360 110,880 110,880 27 Middle East Bank of Kenya Ltd 20 23 21 26 25 28 Kenya Commercial Bank Ltd 113,100 113,100 103,800 127,500 127,500 28 National Bank of Kenya Ltd 26 29 16 17 17 29 Mayfair Bank Ltd 115,800 - - - - 29 National Industrial Credit Bank Ltd 27 30 20 14 15 30 Middle East Bank of Kenya Ltd 120,000 120,000 120,000 120,000 120,000 30 Paramount-Universal Bank Ltd 1 2 2 4 4 31 M Oriental Commercial Bank 116,400 116,400 135,510 135,510 135,510 31 Prime Bank Ltd 11 14 3 5 5 32 National Bank of Kenya Ltd 133,500 133,500 114,300 106,200 106,200 32 SBM Bank Ltd 25 28 25 30 31 33 National Industrial Credit Bank Ltd 140,940 140,940 121,740 105,300 105,300 33 Sidian Bank Ltd 10 13 30 23 21 34 Paramount-Universal Bank Ltd 75,000 75,000 75,000 75,000 75,000 34 Spire Bank 15 19 14 19 19 35 Prime Bank Ltd 99,000 99,000 88,800 88,800 88,200 35 Stanbic Bank Limited 33 38 39 41 40 36 SBM Bank Ltd 137,688 137,688 137,688 137,688 137,688 36 Standard Chartered Bank Ltd 27 31 32 35 37 37 Sidian Bank Ltd 113,760 113,760 143,760 113,760 113,760 37 Transnational Bank Ltd 24 26 26 34 32 38 Spire Bank 116,400 116,400 116,400 116,400 116,400 38 UBA Kenya Bank 2 1 1 3 2 39 Stanbic Bank Limited 163,440 163,440 176,880 200,040 200,040 39 Victoria Commercial Bank Ltd 19 20 19 20 - 40 Standard Chartered Bank Ltd 136,788 136,788 140,988 139,800 183,000 41 Transnational Bank Ltd 132,000 132,000 132,000 132,000 132,000 42 UBA Kenya Bank 82,800 82,800 82,800 82,800 82,800 43 Victoria Commercial Bank Ltd 124,800 124,800 124,800 124,800 117,600 Average Annual Cost 120,424 120,204 124,081 119,112 120,556 96 BANKING SURVEY | 2018 BANKING SURVEY | 2018 97 Tariff Survey 2018 Tariff Survey 2018 Retail Banking – Annual Ranking 1. The customer would be best suited to a Business Retail Banking Sector 14 Dubai Bank Ltd ® - - - 6,880 7,240 Bank 2018 2017 2016 2015 2014 Current Account. 2.3 Retail Banking - Annual Cost Comparison 2014 to 15 DIB Bank Kenya Ltd 7,680 - - - - 1 African Banking Corporation Ltd 3 7 6 12 13 2. 16 Eco-Bank 10,530 10,530 10,530 10,530 10,440 A small scale business enterprise such as this model 2018 2 Bank of Africa 25 24 15 20 16 17 Equity Bank Limited 6,430 6,430 6,430 6,598 6,130 is based upon would use six cheque books of fifty leafs 3 Bank of Baroda (K) Ltd 14 15 32 35 34 18 Family Bank Ltd 12,080 12,080 9,680 9,680 9,680 each in a year. This translates to three hundred cheques 4 Bank of India 39 38 37 39 38 19 First Community Bank 11,860 11,860 15,780 12,180 12,180 or twenty five cheques per month, approximately one 5 Barclays Bank of Kenya Ltd 8 8 9 7 7 20 GT Bank Ltd 15,780 15,780 11,860 11,860 11,860 6 Commercial Bank of Africa 15 10 31 33 33 cheque written for each working day. 21 Guardian Bank Ltd 13,690 13,690 17,290 13,690 14,890 7 Consolidated Bank of Kenya Ltd 18 18 7 9 9 3. The business would need to make at least one large 22 Gulf African Bank 14,160 14,160 14,160 14,160 14,160 8 Co-operative Bank of Kenya 6 5 4 11 12 cash - withdrawal per week to for pay wages and 23 Habib AG Zurich 13,056 13,056 13,060 13,060 9,660 9 Credit Bank Limited 13 14 3 2 3 trading supplies. 24 HF Bank 11,340 11,340 11,388 7,280 7,280 10 Development Bank of Kenya Ltd 9 9 - - - 4. 25 I & M Bank 10,680 10,680 13,680 17,280 13,080 The business would also need to pay some of its 11 Diamond Trust Bank Kenya Ltd 27 26 20 6 6 26 Imperial Bank Ltd ® - - - 14,420 14,420 suppliers by banker’s cheque. 12 DIB Bank Kenya Ltd 4 - - - - 27 Jamii Bora Bank 14,860 14,860 14,860 13,180 13,180 5. Standing orders are usually used to pay for loans and 13 Eco-Bank 11 12 10 13 14 28 Kenya Commercial Bank Ltd 11,430 11,430 11,480 10,830 10,830 rental of premises. 14 Equity Bank Limited 1 1 2 3 2 29 Mayfair Bank Ltd 11,700 - - - - 15 Family Bank Ltd 21 20 8 10 11 6. We have estimated that the business would have an Middle East Bank of Kenya 30 15,840 15,840 15,840 15,240 15,840 16 First Community Bank 20 19 34 16 18 average of two transactions going through the bank The chart above sets out to compare the average cost for Ltd 17 GT Bank Ltd 37 36 13 23 24 statement on an average day, one for banking of sales all of the banks Average Cost (Overall) to that of the banks M Oriental Commercial 31 12,385 12,385 12,145 12,145 12,445 18 Guardian Bank Ltd 28 27 39 27 30 proceeds and another for payments made. with the lowest charges Average Cost (Banks with the Bank 32 National Bank of Kenya Ltd 13,730 13,730 14,210 12,180 12,180 19 Gulf African Bank 33 32 26 28 27 7. The monthly ledger fee is levied by the bank on the lowest charges) from 2014 to 2018. 20 Habib AG Zurich 26 25 22 25 10 National Industrial Credit Business Current Account. 33 13,710 13,710 13,830 11,810 11,810 Average Cost - Banks with the Lowest Charges in Bank Ltd 21 HF Bank 16 16 11 5 5 Retail Banking Paramount-Universal Bank 22 I & M Bank 12 13 23 41 25 34 13,720 13,720 12,520 14,920 14,920 The table below illustrates the projected banking needs Rank Bank 2018 2017 2016 2015 2014 Ltd 23 Jamii Bora Bank 34 33 29 26 26 of such a small scale business enterprise: 1 Equity Bank Limited 6,430 6,430 6,430 6,598 6,130 35 Prime Bank Ltd 9,880 9,880 5,100 5,100 5,100 24 Kenya Commercial Bank Ltd 17 17 12 14 15 Standard Chartered 36 SBM Bank Ltd 14,940 14,940 14,940 14,940 14,940 25 Mayfair Bank Ltd 22 - - - - Key Indicators 2 6,680 6,680 16,860 16,860 17,460 Bank Ltd 37 Sidian Bank Ltd 12,660 12,660 12,660 12,540 12,540 26 Middle East Bank of Kenya Ltd 19 37 35 34 37 Frequency of use in African Banking 38 Spire Bank 15,520 15,520 15,520 15,520 15,520 27 M Oriental Commercial Bank 38 21 14 17 22 Product Used an average month Annual Usage 3 7,080 10,020 8,820 10,020 10,020 Corporation Ltd 39 Stanbic Bank Limited 14,040 14,040 14,040 15,480 15,480 28 National Bank of Kenya Ltd 31 30 27 18 19 50 Leaf Cheque Book 6 4 DIB Bank Kenya Ltd 7,680 - - - - Standard Chartered Bank 29 National Industrial Credit Bank Ltd 29 28 24 15 17 Counter Withdrawals 4 48 40 6,680 6,680 16,860 16,860 17,460 5 UBA Kenya Bank 8,200 8,200 8,680 8,680 8,680 Ltd 30 Paramount-Universal Bank Ltd 30 29 17 31 31 Banker’s Cheques 4 48 41 Transnational Bank Ltd 12,880 12,880 12,400 12,400 12,400 31 Prime Bank Ltd 7 6 1 1 1 Standing Order 2 24 Average Cost 7,214 7,833 10,573 10,198 10,540 42 UBA Kenya Bank 8,200 8,200 8,680 8,680 8,680 32 SBM Bank Ltd 35 34 30 32 32 Charge Per Transaction 50 600 Victoria Commercial Bank 33 Sidian Bank Ltd 23 22 18 22 23 43 10,500 10,500 12,900 12,900 - Ledger Fees 1 12 Ltd Overall Average Cost – Retail Banking 34 Spire Bank 36 35 33 37 36 Average Annual Cost 11,913 12,085 12,483 12,010 11,826 35 Stanbic Bank Limited 32 31 25 36 35 Bank 2018 2017 2016 2015 2014 We have based the charges used in this section on the African Banking Corporation 36 Standard Chartered Bank Ltd 2 2 38 40 39 1 7,080 10,020 8,820 10,020 10,020 tariff guides that the individual banks are obligated to Ltd 2.4 Retail Banking - Annual Ranking Comparison 37 Transnational Bank Ltd 24 23 16 21 21 publish. 38 UBA Kenya Bank 5 4 4 8 8 2 Bank of Africa 12,888 12,888 12,288 12,288 11,160 2014 to 2018 3 Bank of Baroda (K) Ltd 11,050 11,050 15,250 15,250 15,250 39 Victoria Commercial Bank Ltd 10 11 21 24 - Banks with the Lowest Charges – Retail Banking 4 Bank of India 16,428 16,428 16,308 16,308 16,308 Annual Ranking 5 Barclays Bank of Kenya Ltd 10,228 10,228 9,940 8,370 8,370 Tariff Survey 2018 6 Chase Bank Ltd ® - - 14,530 14,530 14,530 Bank 2018 2017 2016 2015 2014 3. SME Banking Sector Ranking 7 Citibank, N.A - - - - - Equity Bank Limited 1 1 2 3 2 The SME Banking Sector Ranking is based on the annual 8 Commercial Bank of Africa 11,300 10,280 15,180 15,180 15,180 Standard Chartered Bank Ltd 2 2 38 40 39 Business Current Account Consolidated Bank of Kenya African Banking Corporation Ltd 3 7 6 12 13 cost of maintaining a . 9 11,650 11,650 9,670 9,670 9,580 Ltd DIB Bank Kenya Ltd 4 - - - - SME Banking – Key indicators used to calculate 10 Co-operative Bank of Kenya 9,280 9,280 8,680 9,880 9,880 UBA Kenya Bank 5 4 4 8 8 annual cost for the model customer “I” 11 Credit Bank Limited 10,980 10,980 6,580 6,580 6,940 SME I – A Small Scale Business Enterprise with a Development Bank of Kenya 12 10,250 10,250 - - - Ltd turnover of less than KSh 5million Diamond Trust Bank Kenya We have projected the banking needs of such an 13 13,505 13,505 12,780 7,980 7,840 Ltd enterprise as follows: 98 BANKING SURVEY | 2018 BANKING SURVEY | 2018 99 Tariff Survey 2018 Tariff Survey 2018 Based upon the six key indicators that we have projected for the SME 1, we have used the tariffs that we were able to obtain 3.1 SME Banking Tariffs Table – Business Current from thirty nine banks calculating the annual cost of opening and maintaining a Business Current Account. Account 3.2 SME I Banking – 2018 Annual Cost of Banking Standing Order Banker’s Cheque Counter W/drl Cheque Book Banker’s Cheque Bank Ledger Fee Charge Per Trans Charge Per Stand/ Order Counter W/ Charge Charge Charge Charge Bank Annual Cost Ledger Fee Cheque Book Per Trans Chg draw Charge African Banking Corporation Ltd 500 30 500 - - 12 Charge Leaf Bank of Africa 550 35 200 200 220 12 1 African Banking Corporation Ltd 39,600 6,000 18,000 12,000 - - 3,600 Bank of Baroda (K) Ltd 500 25 500 500 200 9 2 Bank of Africa 56,160 6,600 21,000 4,800 9,600 10,560 3,600 Bank of India 500 25 500 220 - 15 3 Bank of Baroda (K) Ltd 69,150 6,000 15,000 12,000 24,000 9,600 2,550 Barclays Bank of Kenya Ltd 440 40 420 150 310 15 4 Bank of India 48,060 6,000 15,000 12,000 10,560 - 4,500 Chase Bank Ltd ® ------5 Barclays Bank of Kenya Ltd 65,880 5,280 24,000 10,080 7,200 14,880 4,440 Citibank, N.A ------6 Chase Bank Ltd ® ------Commercial Bank of Africa 600 40 300 500 - 10 7 Citibank, N.A ------Consolidated Bank of Kenya Ltd 360 30 350 150 - 18 8 Commercial Bank of Africa 65,400 7,200 24,000 7,200 24,000 - 3,000 Co-operative Bank of Kenya 300 35 250 200 100 10 9 Consolidated Bank of Kenya Ltd 43,170 4,320 18,000 8,400 7,200 - 5,250 Credit Bank Limited 350 30 200 250 - 12 10 Co-operative Bank of Kenya 48,000 3,600 21,000 6,000 9,600 4,800 3,000 Development Bank of Kenya Ltd 400 30 200 500 - 13 11 Credit Bank Limited 42,600 4,200 18,000 4,800 12,000 - 3,600 Diamond Trust Bank Kenya Ltd - 33 400 400 33 16 12 Development Bank of Kenya Ltd 55,350 4,800 18,000 4,800 24,000 - 3,750 Dubai Bank Ltd ® ------13 Diamond Trust Bank Kenya Ltd 55,059 - 19,800 9,600 19,200 1,584 4,875 DIB Bank Kenya Ltd 1,000 30 250 250 200 15 14 Dubai Bank Ltd ® ------Eco-Bank 350 30 250 165 200 15 15 DIB Bank Kenya Ltd 62,100 12,000 18,000 6,000 12,000 9,600 4,500 Equity Bank Limited - 50 300 100 - 18 16 Eco-Bank 50,220 4,200 18,000 6,000 7,920 9,600 4,500 Family Bank Ltd 500 35 300 100 100 14 17 Equity Bank Limited 47,250 - 30,000 7,200 4,800 - 5,250 First Community Bank 1,000 50 250 200 200 15 18 Family Bank Ltd 48,000 6,000 21,000 7,200 4,800 4,800 4,200 GT Bank Ltd 550 30 300 350 - 16 19 First Community Bank 71,700 12,000 30,000 6,000 9,600 9,600 4,500 Guardian Bank Ltd 500 20 250 350 - 18 20 GT Bank Ltd 53,400 6,600 18,000 7,200 16,800 - 4,800 Gulf African Bank 700 30 300 250 202 15 21 Guardian Bank Ltd 46,050 6,000 12,000 6,000 16,800 - 5,250 Habib AG Zurich 333 35 500 600 - 15 22 Gulf African Bank 59,796 8,400 18,000 7,200 12,000 9,696 4,500 HF Bank Ltd 300 35 250 150 100 15 23 Habib AG Zurich 70,296 3,996 21,000 12,000 28,800 - 4,500 I & M Bank 250 20 350 500 20 12 24 HF Bank Ltd 47,100 3,600 21,000 6,000 7,200 4,800 4,500 Imperial Bank Ltd ® ------25 I & M Bank 51,960 3,000 12,000 8,400 24,000 960 3,600 Jamii Bora Bank 400 60 550 150 110 10 26 Imperial Bank Ltd ® ------Kenya Commercial Bank Ltd 350 35 250 200 200 8 27 Jamii Bora Bank 69,480 4,800 36,000 13,200 7,200 5,280 3,000 Mayfair Bank Ltd 500 20 300 500 - 15 28 Kenya Commercial Bank Ltd 52,650 4,200 21,000 6,000 9,600 9,600 2,250 Middle East Bank of Kenya Ltd 500 30 300 400 - 18 29 Mayfair Bank Ltd 53,700 6,000 12,000 7,200 24,000 - 4,500 M Oriental Commercial Bank - 25 300 400 100 16 30 Middle East Bank of Kenya Ltd 55,800 6,000 18,000 7,200 19,200 - 5,400 National Bank of Kenya Ltd 600 35 300 300 200 13 31 M Oriental Commercial Bank 51,000 - 15,000 7,200 19,200 4,800 4,800 National Industrial Credit Bank Ltd 350 30 365 300 300 14 32 National Bank of Kenya Ltd 63,150 7,200 21,000 7,200 14,400 9,600 3,750 Paramount-Universal Bank Ltd 250 15 200 300 - 10 National Industrial Credit Bank 33 63,810 4,200 18,000 8,760 14,400 14,400 4,050 Prime Bank Ltd 750 30 - 500 - 10 Ltd SBM Bank Ltd 500 28 500 400 28 15 34 Paramount-Universal Bank Ltd 34,200 3,000 9,000 4,800 14,400 - 3,000 Sidian Bank Ltd 300 30 440 110 110 18 35 Prime Bank Ltd 54,000 9,000 18,000 - 24,000 - 3,000 Spire Bank 300 30 300 300 100 16 36 SBM Bank Ltd 59,844 6,000 16,800 12,000 19,200 1,344 4,500 Stanbic Bank Limited 400 40 300 680 60 18 37 Sidian Bank Ltd 48,120 3,600 18,000 10,560 5,280 5,280 5,400 Standard Chartered Bank Ltd 999 40 250 500 - 8 38 Spire Bank 52,800 3,600 18,000 7,200 14,400 4,800 4,800 Transnational Bank Ltd 300 30 250 600 50 10 39 Stanbic Bank Limited 76,920 4,800 24,000 7,200 32,640 2,880 5,400 UBA Kenya Bank 300 25 150 200 100 10 40 Standard Chartered Bank Ltd 68,388 11,988 24,000 6,000 24,000 - 2,400 Victoria Commercial Bank Ltd 500 25 500 350 - 12 41 Transnational Bank Ltd 61,800 3,600 18,000 6,000 28,800 2,400 3,000 42 UBA Kenya Bank 39,600 3,600 15,000 3,600 9,600 4,800 3,000 43 Victoria Commercial Bank Ltd 53,400 6,000 15,000 12,000 16,800 - 3,600 100 BANKING SURVEY | 2018 BANKING SURVEY | 2018 101 Tariff Survey 2018 Tariff Survey 2018 3.3 SME I Banking – 2018 / 17 Annual Cost of Paramount-Universal with an annual cost of KSh 34,200 1. The customer would be best suited to a Business Business Current Account. Banking Comparison is the bank with the lowest charges in SME Banking for a Current Account. The table below illustrates the projected banking needs Bank 2018 2017 firm with an annual turnover of < KSh 5Million. 2. A medium scale business enterprise such as this model of a medium scale business enterprise: 1 African Banking Corporation Ltd 39,600 36,900 is based upon would use one cheque book of fifty leafs Key Indicators 2 Bank of Africa 56,160 56,160 3.5 SME 1 Ranking Table – 2018 Overall Ranking each per month. This translates to approximately two Frequency of use in an Annual 3 Bank of Baroda (K) Ltd 69,150 69,150 Product Used average month Usage Rank Bank 2018 cheques written for each working day. 4 Bank of India 48,060 48,060 50 Leaf Cheque Book 1 12 1 Paramount-Universal Bank Ltd 34,200 3. The business would need to make at least two large 5 Barclays Bank of Kenya Ltd 65,880 65,880 Counter Withdrawals 8 96 2 African Banking Corporation Ltd 39,600 6 Chase Bank Ltd ® - - cash - withdrawals per week to for pay wages and Banker’s Cheques 8 96 2 UBA Kenya Bank 39,600 7 Citibank, N.A - - trading supplies. Standing Order 8 96 8 Commercial Bank of Africa 65,400 61,800 3 Credit Bank Limited 42,600 4. The business would also need to pay some of its Charge Per Transaction 100 1200 9 Consolidated Bank of Kenya Ltd 43,170 43,170 4 Consolidated Bank of Kenya Ltd 43,170 suppliers by banker’s cheque. Ledger Fees 1 12 10 Co-operative Bank of Kenya 48,000 48,000 5 Guardian Bank Ltd 46,050 5. 11 Credit Bank Limited 42,600 42,600 6 HF Bank Ltd 47,100 Standing orders are usually used to pay for loans and 12 Development Bank of Kenya Ltd 55,350 55,350 7 Equity Bank Limited 47,250 rental of premises. Based upon the six key indicators that we have projected 13 Diamond Trust Bank Kenya Ltd 55,059 55,059 8 Co-operative Bank of Kenya 48,000 6. We have estimated that the business would have an for the SME 2, we have used the tariffs that we were able to 14 Dubai Bank Ltd ® - - 8 Family Bank Ltd 48,000 average of four transactions going through the bank obtain from thirty nine banks calculating the annual cost of 15 DIB Bank Kenya Ltd 62,100 - 9 Bank of India 48,060 statement on an average day, for banking of sales opening and maintaining a Business Current Account. 16 Eco-Bank 50,220 50,220 10 Sidian Bank Ltd 48,120 proceeds and for payments made. 17 Equity Bank Limited 47,250 47,250 11 Eco-Bank 50,220 7. The monthly ledger fee is levied by the bank on the 3.6 SME II Banking – 2018 Annual Cost of Banking 18 Family Bank Ltd 48,000 48,000 12 M Oriental Commercial Bank 51,000 19 First Community Bank 71,700 71,700 13 I & M Bank 51,960 20 GT Bank Ltd 53,400 53,400 Banker’s Cheque 14 Kenya Commercial Bank Ltd 52,650 Charge Per Counter W/ 21 Guardian Bank Ltd 46,050 46,050 Bank Annual Cost Ledger Fee S/O Charge Cheque Book Per 15 Spire Bank 52,800 Trans drl Charge 22 Gulf African Bank 59,796 59,796 Charge Leaf 16 GT Bank Ltd 53,400 23 Habib AG Zurich 70,296 70,296 1 African Banking Corporation Ltd 97,200 6,000 36,000 48,000 - - 7,200 16 Victoria Commercial Bank Ltd 53,400 24 HF Bank Ltd 47,100 47,100 2 Bank of Africa 115,320 6,600 42,000 19,200 19,200 21,120 7,200 17 Mayfair Bank Ltd 53,700 25 I & M Bank 51,960 51,960 3 Bank of Baroda (K) Ltd 156,300 6,000 30,000 48,000 48,000 19,200 5,100 18 Prime Bank Ltd 54,000 26 Imperial Bank Ltd ® - - 4 Bank of India 114,120 6,000 30,000 48,000 21,120 - 9,000 19 Diamond Trust Bank Kenya Ltd 55,059 27 Jamii Bora Bank 69,480 69,480 5 Barclays Bank of Kenya Ltd 146,640 5,280 48,000 40,320 14,400 29,760 8,880 28 Kenya Commercial Bank Ltd 52,650 52,650 20 Development Bank of Kenya Ltd 55,350 6 Chase Bank Ltd ® ------29 Mayfair Bank Ltd 53,700 - 21 Middle East Bank of Kenya Ltd 55,800 7 Citibank, N.A ------30 Middle East Bank of Kenya Ltd 55,800 55,800 22 Bank of Africa 56,160 8 Commercial Bank of Africa 138,000 7,200 48,000 28,800 48,000 - 6,000 31 M Oriental Commercial Bank 51,000 51,000 23 Gulf African Bank 59,796 9 Consolidated Bank of Kenya Ltd 98,820 4,320 36,000 33,600 14,400 - 10,500 32 National Bank of Kenya Ltd 63,150 63,150 24 SBM Bank Ltd 59,844 10 Co-operative Bank of Kenya 104,400 3,600 42,000 24,000 19,200 9,600 6,000 33 National Industrial Credit Bank Ltd 63,810 63,810 25 Transnational Bank Ltd 61,800 11 Credit Bank Limited 90,600 4,200 36,000 19,200 24,000 - 7,200 34 Paramount-Universal Bank Ltd 34,200 34,200 26 DIB Bank Kenya Ltd 62,100 12 Development Bank of Kenya Ltd 115,500 4,800 36,000 19,200 48,000 - 7,500 35 Prime Bank Ltd 54,000 54,000 27 National Bank of Kenya Ltd 63,150 13 Diamond Trust Bank Kenya Ltd 129,318 - 39,600 38,400 38,400 3,168 9,750 36 SBM Bank Ltd 59,844 59,844 28 National Industrial Credit Bank Ltd 63,810 14 Dubai Bank Ltd ® ------37 Sidian Bank Ltd 48,120 48,120 29 Commercial Bank of Africa 65,400 15 DIB Bank Kenya Ltd 124,200 12,000 36,000 24,000 24,000 19,200 9,000 38 Spire Bank 52,800 52,800 30 Barclays Bank of Kenya Ltd 65,880 16 Eco-Bank 108,240 4,200 36,000 24,000 15,840 19,200 9,000 39 Stanbic Bank Limited 76,920 76,920 31 Standard Chartered Bank Ltd 68,388 17 Equity Bank Limited 108,900 - 60,000 28,800 9,600 - 10,500 40 Standard Chartered Bank Ltd 68,388 68,388 32 Bank of Baroda (K) Ltd 69,150 41 Transnational Bank Ltd 61,800 61,800 18 Family Bank Ltd 104,400 6,000 42,000 28,800 9,600 9,600 8,400 33 Jamii Bora Bank 69,480 42 UBA Kenya Bank 39,600 24,600 19 First Community Bank 143,400 12,000 60,000 24,000 19,200 19,200 9,000 34 Habib AG Zurich 70,296 43 Victoria Commercial Bank Ltd 53,400 53,400 20 GT Bank Ltd 114,600 6,600 36,000 28,800 33,600 - 9,600 35 First Community Bank 71,700 Average Annual Cost 55,255 54,537 21 Guardian Bank Ltd 98,100 6,000 24,000 24,000 33,600 - 10,500 36 Stanbic Bank Limited 76,920 22 Gulf African Bank 125,592 8,400 36,000 28,800 24,000 19,392 9,000 Average Annual Cost 55,255 3.4 SME I Ranking Table – 2018 Banks with the 23 Habib AG Zurich 160,596 3,996 42,000 48,000 57,600 - 9,000 24 HF Bank Ltd 102,600 3,600 42,000 24,000 14,400 9,600 9,000 Lowest Charges SME II – A Medium Scale Business Enterprise with a 25 I & M Bank 117,720 3,000 24,000 33,600 48,000 1,920 7,200 Rank Bank 2018 turnover of less than KSh 500million 26 Imperial Bank Ltd ® ------1 Paramount-Universal Bank Ltd 34,200 “SME II” has been constructed based on the needs of a 27 Jamii Bora Bank 160,560 4,800 72,000 52,800 14,400 10,560 6,000 2 African Banking Corporation Ltd 39,600 28 Kenya Commercial Bank Ltd 113,100 4,200 42,000 24,000 19,200 19,200 4,500 2 UBA Kenya Bank 39,600 medium scale business with a turnover of less than KSh 29 Mayfair Bank Ltd 115,800 6,000 24,000 28,800 48,000 - 9,000 3 Credit Bank Limited 42,600 500 million per year. We have projected the banking 30 Middle East Bank of Kenya Ltd 120,000 6,000 36,000 28,800 38,400 - 10,800 4 Consolidated Bank of Kenya Ltd 43,170 needs of such an enterprise as follows: 31 M Oriental Commercial Bank 116,400 - 30,000 28,800 38,400 9,600 9,600 102 BANKING SURVEY | 2018 BANKING SURVEY | 2018 103 Tariff Survey 2018 Tariff Survey 2018 32 National Bank of Kenya Ltd 133,500 7,200 42,000 28,800 28,800 19,200 7,500 28 Standard Chartered Bank Ltd 136,788 13 M Oriental Commercial Bank 12 20 32 33 National Industrial Credit Bank Ltd 140,940 4,200 36,000 35,040 28,800 28,800 8,100 29 SBM Bank Ltd 137,688 14 I & M Bank 13 22 35 34 Paramount-Universal Bank Ltd 75,000 3,000 18,000 19,200 28,800 - 6,000 30 Commercial Bank of Africa 138,000 15 Mayfair Bank Ltd 17 19 36 35 Prime Bank Ltd 99,000 9,000 36,000 - 48,000 - 6,000 31 National Industrial Credit Bank Ltd 140,940 15 Spire Bank 15 21 36 36 SBM Bank Ltd 137,688 6,000 33,600 48,000 38,400 2,688 9,000 32 First Community Bank 143,400 16 Development Bank of Kenya Ltd 20 18 38 37 Sidian Bank Ltd 113,760 3,600 36,000 42,240 10,560 10,560 10,800 33 Barclays Bank of Kenya Ltd 146,640 17 Bank of Africa 22 17 39 38 Spire Bank 116,400 3,600 36,000 28,800 28,800 9,600 9,600 34 Bank of Baroda (K) Ltd 156,300 18 Victoria Commercial Bank Ltd 16 25 41 39 Stanbic Bank Limited 163,440 4,800 48,000 28,800 65,280 5,760 10,800 35 Jamii Bora Bank 160,560 19 Middle East Bank of Kenya Ltd 21 23 44 40 Standard Chartered Bank Ltd 136,788 11,988 48,000 24,000 48,000 - 4,800 36 Habib AG Zurich 160,596 20 Diamond Trust Bank Kenya Ltd 19 27 46 41 Transnational Bank Ltd 132,000 3,600 36,000 24,000 57,600 4,800 6,000 37 Stanbic Bank Limited 163,440 21 Gulf African Bank 23 26 49 42 UBA Kenya Bank 82,800 3,600 30,000 14,400 19,200 9,600 6,000 Average Annual Cost 120,424 22 DIB Bank Kenya Ltd 26 24 50 43 Victoria Commercial Bank Ltd 124,800 6,000 30,000 48,000 33,600 - 7,200 23 Transnational Bank Ltd 25 28 53 24 SBM Bank Ltd 24 31 55 SME Banking Sector – 2018 Overall Ranking 25 National Bank of Kenya Ltd 27 29 56 3.7 SME II Banking – 2018 / 17 Annual Cost2018 of Banking2017 ComparisonRank Bank 2018 The Overall SME Banking Sector Ranking combines the 26 Commercial Bank of Africa 29 32 61 1 African Banking Corporation Ltd 97,200 91,800 1 Paramount-Universal Bank Ltd 75,000 rank achieved by each bank in the two banking models 2 Bank of Africa 115,320 115,320 National Industrial Credit Bank 2 UBA Kenya Bank 82,800 covered in the survey, mainly SME ‘I’ which caters for 26 28 33 61 3 Bank of Baroda (K) Ltd 156,300 156,300 Ltd 3 Credit Bank Limited 90,600 4 Bank of India 114,120 114,120 firms with an annual turnover of < KSh 5Million and 26 Standard Chartered Bank Ltd 31 30 61 4 African Banking Corporation Ltd 97,200 5 Barclays Bank of Kenya Ltd 146,640 146,640 SME ‘II’ for those with an annual turnover of < KSh 27 Barclays Bank of Kenya Ltd 30 35 65 5 Guardian Bank Ltd 98,100 6 Chase Bank Ltd ® - - 500Million . 28 Bank of Baroda (K) Ltd 32 36 68 7 Citibank, N.A - - Paramount - Universal Bank with an annual cost of KSh 29 First Community Bank 35 34 69 8 Commercial Bank of Africa 138,000 134,400 75,000 is the bank with the lowest charges in SME Banking 30 Jamii Bora Bank 33 37 70 9 Consolidated Bank of Kenya Ltd 98,820 98,820 SME Banking Overall Ranking Table – 2018 Banks for a firm with an annual turnover of < KSh 500Million. 31 Habib AG Zurich 34 38 72 10 Co-operative Bank of Kenya 104,400 104,400 with the lowest charges 32 Stanbic Bank Limited 36 39 75 11 Credit Bank Limited 90,600 90,600 Rank Bank SME I SME II Points 12 Development Bank of Kenya Ltd 115,500 115,500 3.9 SME II Ranking Table – 2018 Overall Ranking 13 Diamond Trust Bank Kenya Ltd 129,318 129,318 1 Paramount-Universal Bank Ltd 1 1 2 Rank Bank 2018 4. Retail Banking Sector Ranking 14 Dubai Bank Ltd ® - - 2 UBA Kenya Bank 2 2 4 1 Paramount-Universal Bank Ltd 75,000 The Retail Banking Sector Ranking is based on the annual 15 DIB Bank Kenya Ltd 124,200 - 3 African Banking Corporation Ltd 2 4 6 2 UBA Kenya Bank 82,800 16 Eco-Bank 108,240 108,240 3 Credit Bank Limited 3 3 6 cost of maintaining a Personal Current Account for an 3 Credit Bank Limited 90,600 17 Equity Bank Limited 108,900 108,900 4 Consolidated Bank of Kenya Ltd 4 6 10 individual in formal employment who is married with 4 African Banking Corporation Ltd 97,200 18 Family Bank Ltd 104,400 104,400 4 Guardian Bank Ltd 5 5 10 two children in school. 19 First Community Bank 143,400 143,400 5 Guardian Bank Ltd 98,100 5 HF Bank Ltd 6 8 14 Retail Banking – Key indicators used to calculate 20 GT Bank Ltd 114,600 114,600 6 Consolidated Bank of Kenya Ltd 98,820 Paramount-Universal Bank Ltd emerges as the bank with 21 Guardian Bank Ltd 98,100 98,100 7 Prime Bank Ltd 99,000 annual cost for the model customer 22 Gulf African Bank 125,592 125,592 the lowest charges overall with 2 points scored. 8 HF Bank Ltd 102,600 Personal Current Account - Individual Customer 23 Habib AG Zurich 160,596 160,596 24 HF Bank Ltd 102,600 102,600 9 Co-operative Bank of Kenya 104,400 Our calculations for the retail banking sector are 25 I & M Bank 117,720 117,720 9 Family Bank Ltd 104,400 SME Banking – 2018 Overall Ranking Table based on the needs of an individual customer who is in 26 Imperial Bank Ltd ® - - 10 Eco-Bank 108,240 Rank Bank SME I SME II Points salaried employment and has two school going children. 27 Jamii Bora Bank 160,560 160,560 11 Equity Bank Limited 108,900 1 Paramount-Universal Bank Ltd 1 1 2 Using these two base assumptions, we have projected 28 Kenya Commercial Bank Ltd 113,100 113,100 12 Kenya Commercial Bank Ltd 113,100 2 UBA Kenya Bank 2 2 4 the minimum banking needs of the individual as 29 Mayfair Bank Ltd 115,800 - 13 Sidian Bank Ltd 113,760 3 African Banking Corporation Ltd 2 4 6 30 Middle East Bank of Kenya Ltd 120,000 120,000 follows: 14 Bank of India 114,120 3 Credit Bank Limited 3 3 6 31 M Oriental Commercial Bank 116,400 116,400 15 GT Bank Ltd 114,600 1. The individual would be best served by maintaining a 32 National Bank of Kenya Ltd 133,500 133,500 4 Consolidated Bank of Kenya Ltd 4 6 10 33 National Industrial Credit Bank Ltd 140,940 140,940 16 Bank of Africa 115,320 4 Guardian Bank Ltd 5 5 10 Personal Current Account. 34 Paramount-Universal Bank Ltd 75,000 75,000 17 Development Bank of Kenya Ltd 115,500 5 HF Bank Ltd 6 8 14 2. A cheque book would be required for making 35 Prime Bank Ltd 99,000 99,000 18 Mayfair Bank Ltd 115,800 6 Co-operative Bank of Kenya 8 9 17 various payments such as rent and utilities. 36 SBM Bank Ltd 137,688 137,688 19 M Oriental Commercial Bank 116,400 7 Family Bank Ltd 8 10 18 We have estimated that such an individual would 37 Sidian Bank Ltd 113,760 113,760 19 Spire Bank 116,400 8 Equity Bank Limited 7 12 19 require two fifty-leaf cheque books per year which 38 Spire Bank 116,400 116,400 20 I & M Bank 117,720 9 Eco-Bank 11 11 22 39 Stanbic Bank Limited 163,440 163,440 translates to approximately eight cheques written out 21 Middle East Bank of Kenya Ltd 120,000 10 Bank of India 9 15 24 40 Standard Chartered Bank Ltd 136,788 136,788 22 DIB Bank Kenya Ltd 124,200 per month. 41 Transnational Bank Ltd 132,000 132,000 10 Sidian Bank Ltd 10 14 24 3. An ATM card for cash withdrawals would be required. 42 UBA Kenya Bank 82,800 82,800 23 Victoria Commercial Bank Ltd 124,800 11 Prime Bank Ltd 18 7 25 43 Victoria Commercial Bank Ltd 124,800 124,800 24 Gulf African Bank 125,592 12 Kenya Commercial Bank Ltd 14 13 27 We have projected that the individual that this model Average Annual Cost 120,424 120,204 25 Diamond Trust Bank Kenya Ltd 129,318 13 GT Bank Ltd 16 16 32 is based upon would make a minimum of two cash 3.8 SME II Ranking Table – 2018 Banks with the 26 Transnational Bank Ltd 132,000 27 National Bank of Kenya Ltd 133,500 Lowest Charges 104 BANKING SURVEY | 2018 BANKING SURVEY | 2018 105 Tariff Survey 2018 Tariff Survey 2018 withdrawals per week or eight in a month. 14 Dubai Bank Ltd ® - - - - - 4. With two children in school, the individual would need to 15 DIB Bank Kenya Ltd - 150 30 15 250 4.2 Retail Banking – 2018 Annual Cost of Banking 16 Eco-Bank 350 - 40 15 165 purchase banker’s cheques for payment of school fees. Salary Banker’s 17 Equity Bank Limited - 100 30 18 100 ATM Trans Cheque Book The current school year consists of three terms. Bank Annual Cost Ledger Fee Process Cheque 18 Family Bank Ltd 500 100 30 14 100 Charge Per Leaf The parent is therefore required to purchase three Charge Charge 19 First Community Bank 250 150 35 16 350 banker’s cheques annually for each child. 1 African Banking Corporation Ltd 7,080 - 1,200 2,880 1,200 1,800 20 GT Bank Ltd 750 100 30 15 200 2 Bank of Africa 12,888 4,200 1,200 5,088 1,200 1,200 5. Being in salaried employment, the individual would 21 Guardian Bank Ltd 500 - 40 18 350 3 Bank of Baroda (K) Ltd 11,050 6,000 1,200 - 850 3,000 have to pay for the monthly salary processing fee or 22 Gulf African Bank 500 150 35 15 250 4 Bank of India 16,428 6,000 1,800 5,808 1,500 1,320 deposit charged by the bank when the paycheck is 23 Habib AG Zurich 333 50 35 15 600 5 Barclays Bank of Kenya Ltd 10,228 - 1,980 3,168 1,480 3,600 transferred to the account. 24 HF Bank 300 165 35 15 150 6 Chase Bank Ltd ® ------6. Minimum monthly ledger fees are charged on personal 25 I & M Bank 250 50 30 12 500 7 Citibank, N.A ------current accounts for a limited number of transactions 26 Imperial Bank Ltd ® - - - - - 8 Commercial Bank of Africa 11,300 2,520 900 2,880 2,000 3,000 27 Jamii Bora Bank 400 200 60 10 150 beyond which a transaction fee is charged for every 9 Consolidated Bank of Kenya Ltd 11,650 4,320 1,800 2,880 1,750 900 28 Kenya Commercial Bank Ltd 350 200 30 8 200 entry on the bank statement. 10 Co-operative Bank of Kenya 9,280 3,600 600 2,880 1,000 1,200 29 Mayfair Bank Ltd 500 100 - 15 500 11 Credit Bank Limited 10,980 4,200 1,200 2,880 1,200 1,500 § The transactions that have been projected for 30 Middle East Bank of Kenya 500 150 40 18 400 12 Development Bank of Kenya Ltd 10,250 4,800 1,200 - 1,250 3,000 this model fall well within the limit set by the majority of Ltd 13 Diamond Trust Bank Kenya Ltd 13,505 - 6,000 2,880 1,625 3,000 31 M Oriental Commercial Bank - 220 60 16 400 the commercial banks. 14 Dubai Bank Ltd ® ------32 National Bank of Kenya Ltd 500 150 30 13 300 § 15 DIB Bank Kenya Ltd 7,680 - 1,800 2,880 1,500 1,500 33 National Industrial Credit 500 140 30 14 300 The table below illustrates the projected banking needs 16 Eco-Bank 10,530 4,200 - 3,840 1,500 990 Bank Ltd of the individual: 17 Equity Bank Limited 6,430 - 1,200 2,880 1,750 600 34 Paramount-Universal Bank 250 100 70 10 300 Key Indicators Ltd 18 Family Bank Ltd 12,080 6,000 1,200 2,880 1,400 600 Frequency of use in Annual 35 Prime Bank Ltd 150 100 30 10 500 19 First Community Bank 11,860 3,000 1,800 3,360 1,600 2,100 Product Used an average month Usage 36 SBM Bank Ltd 500 100 40 15 400 20 GT Bank Ltd 15,780 9,000 1,200 2,880 1,500 1,200 50 Leaf Cheque Book 2 37 Sidian Bank Ltd 300 110 55 18 110 21 Guardian Bank Ltd 13,690 6,000 - 3,840 1,750 2,100 ATM Withdrawals 8 96 38 Spire Bank 300 150 70 16 300 22 Gulf African Bank 14,160 6,000 1,800 3,360 1,500 1,500 Banker’s Cheques for School Fees 6 39 Stanbic Bank Limited 400 - 35 18 680 23 Habib AG Zurich 13,056 3,996 600 3,360 1,500 3,600 Salary Deposit / Clearing 1 12 40 Standard Chartered Bank Ltd - 100 30 8 300 24 HF Bank 11,340 3,600 1,980 3,360 1,500 900 Ledger Fees 1 12 41 Transnational Bank Ltd 300 150 30 10 600 25 I & M Bank 10,680 3,000 600 2,880 1,200 3,000 Based upon these five key indicators we have sampled 42 UBA Kenya Bank 300 - 25 10 200 26 Imperial Bank Ltd ® ------the tariffs that we were able to obtain for thirty nine out 43 Victoria Commercial Bank Ltd 500 100 - 12 350 27 Jamii Bora Bank 14,860 4,800 2,400 5,760 1,000 900 28 Kenya Commercial Bank Ltd 11,430 4,200 2,400 2,880 750 1,200 of a total of forty three banks. The charges set out above have been collected from 29 Mayfair Bank Ltd 11,700 6,000 1,200 - 1,500 3,000 the tariffs that each bank is obligated to publish by the 30 Middle East Bank of Kenya Ltd 15,840 6,000 1,800 3,840 1,800 2,400 4.1 Retail Banking Tariffs Table - Personal Current regulating authority, which is the Central Bank of Kenya. 31 M Oriental Commercial Bank 12,385 - 2,640 5,760 1,585 2,400 Account The annual cost of opening and maintaining a 32 National Bank of Kenya Ltd 13,730 6,000 1,800 2,880 1,250 1,800 Bank Ledger Salary ATM Cheque Banker’s personal current account has been calculated by using 33 National Industrial Credit Bank Ltd 13,710 6,000 1,680 2,880 1,350 1,800 Fee Process Trans Book Cheque the charge levied by the bank for a particular product 34 Paramount-Universal Bank Ltd 13,720 3,000 1,200 6,720 1,000 1,800 Charge Charge Per Leaf Charge and multiplying it by the frequency of usage in a year 35 Prime Bank Ltd 9,880 1,800 1,200 2,880 1,000 3,000 1 African Banking Corporation - 100 30 12 300 by the customer, in this case an individual in salaried 36 SBM Bank Ltd 14,940 6,000 1,200 3,840 1,500 2,400 Ltd 37 Sidian Bank Ltd 12,660 3,600 1,320 5,280 1,800 660 employment, married and with two children of school 2 Bank of Africa 350 100 53 12 200 38 Spire Bank 15,520 3,600 1,800 6,720 1,600 1,800 going age. 3 Bank of Baroda (K) Ltd 500 100 - 9 500 39 Stanbic Bank Limited 14,040 4,800 - 3,360 1,800 4,080 4 Bank of India 500 150 61 15 220 40 Standard Chartered Bank Ltd 6,680 - 1,200 2,880 800 1,800 5 Barclays Bank of Kenya Ltd - 165 33 15 600 41 Transnational Bank Ltd 12,880 3,600 1,800 2,880 1,000 3,600 6 Chase Bank Ltd ® - - - - - 42 UBA Kenya Bank 8,200 3,600 - 2,400 1,000 1,200 7 Citibank, N.A - - - - - 43 Victoria Commercial Bank Ltd 10,500 6,000 1,200 - 1,200 2,100 8 Commercial Bank of Africa 210 75 30 20 500 9 Consolidated Bank of Kenya 360 150 30 18 150 Ltd 10 Co-operative Bank of Kenya 300 50 30 10 200 11 Credit Bank Limited 350 100 30 12 250 12 Development Bank of Kenya 400 100 - 13 500 Ltd 13 Diamond Trust Bank Kenya - 500 30 16 500 Ltd 106 BANKING SURVEY | 2018 BANKING SURVEY | 2018 107 Tariff Survey 2018 Tariff Survey 2018 Points SME Mobile Money Transfer Services 4.3 Retail Banking – 2018 / 17 Annual Cost of Banking Rank Bank Scored Banking Retail Banking In this section we seek to establish the annual cost of mobile African Banking Corporation Comparison 4.5 Retail Banking Ranking Table – 2018 Overall money transfer services for an individual who transacts three 1 Ltd 6 3 3 Bank 2018 2017 Ranking 2 UBA Kenya Bank 7 2 5 times a week 1 African Banking Corporation Ltd 7,080 10,020 Rank Bank 2018 2 Bank of Africa 12,888 12,888 1 Equity Bank Limited 6,430 3 Equity Bank Limited 9 8 1 3 Bank of Baroda (K) Ltd 11,050 11,050 2 Standard Chartered Bank Ltd 6,680 4 Co-operative Bank of Kenya 13 7 6 Estimated Annual Cost of Sending Money 4 Bank of India 16,428 16,428 3 African Banking Corporation Ltd 7,080 5 Credit Bank Limited 17 4 13 Comparison (Within Network to Registered 5 Barclays Bank of Kenya Ltd 10,228 10,228 4 DIB Bank Kenya Ltd 7,680 ABC Bank Ltd emerges as the bank with the lowest users only) 6 Chase Bank Ltd ® - - 5 UBA Kenya Bank 8,200 charges overall with 6 points scored. The bank has been Sending Within 7 Citibank, N.A - - 6 Co-operative Bank of Kenya 9,280 Estimated Annual Cost ranked 3rd in SME and 3rd in the Retail Banking Sectors Network 8 Commercial Bank of Africa 11,300 10,280 7 Prime Bank Ltd 9,880 Transaction Amount Frq/Wk Mpesa Equitel T-Kash Airtel 9 Consolidated Bank of Kenya Ltd 11,650 11,650 8 Barclays Bank of Kenya Ltd 10,228 respectively. Upto KSh 49 3 156 - - - 10 Co-operative Bank of Kenya 9,280 9,280 9 Development Bank of Kenya Ltd 10,250 10 Victoria Commercial Bank Ltd 10,500 11 Credit Bank Limited 10,980 10,980 KSh 50 to KSh 100 3 468 172 - - 11 Eco-Bank 10,530 5.1 Ranking Table – 2018 Overall Ranking 12 Development Bank of Kenya Ltd 10,250 10,250 KSh 101 to KSh 500 3 1,716 858 1,560 - 12 I & M Bank 10,680 Points SME Retail 13 Diamond Trust Bank Kenya Ltd 13,505 13,505 KSh 501 to KSh 1,000 3 2,340 1,716 2,340 - 13 Credit Bank Limited 10,980 Rank Bank Scored Banking Banking KSh 1,001 to KSh 1,500 3 3,900 4,290 3,120 - 14 Dubai Bank Ltd ® - - 14 Bank of Baroda (K) Ltd 11,050 1 African Banking Corporation Ltd 6 3 3 15 DIB Bank Kenya Ltd 7,680 - KSh 1,501 to KSh 2,500 3 6,240 4,290 4,680 - 15 Commercial Bank of Africa 11,300 2 UBA Kenya Bank 7 2 5 16 Eco-Bank 10,530 10,530 KSh 2,501 to KSh 3,500 3 8,580 4,290 6,240 - 16 HF Bank 11,340 3 Equity Bank Limited 9 8 1 17 Equity Bank Limited 6,430 6,430 KSh 3,501 to KSh 5,000 3 9,360 4,290 7,800 - 17 Kenya Commercial Bank Ltd 11,430 4 Co-operative Bank of Kenya 13 7 6 18 Family Bank Ltd 12,080 12,080 18 Consolidated Bank of Kenya Ltd 11,650 KSh 5,001 to KSh 7,500 3 11,700 4,290 9,360 - 5 Credit Bank Limited 17 4 13 19 First Community Bank 11,860 11,860 19 Mayfair Bank Ltd 11,700 KSh 7,501 to KSh 10,000 3 13,260 4,290 12,480 - 6 Prime Bank Ltd 18 11 7 20 GT Bank Ltd 15,780 15,780 20 First Community Bank 11,860 KSh 10,001 to KSh 15,000 3 14,820 4,290 12,480 - 7 Eco-Bank 20 9 11 21 Guardian Bank Ltd 13,690 13,690 21 Family Bank Ltd 12,080 KSh 15,001 to KSh 20,000 3 15,600 4,290 12,480 - 22 M Oriental Commercial Bank 12,385 8 HF Bank 22 6 16 22 Gulf African Bank 14,160 14,160 KSh 20,001 to KSh 35,000 3 17,160 4,290 15,600 - 23 Habib AG Zurich 13,056 13,056 23 Sidian Bank Ltd 12,660 9 Consolidated Bank of Kenya Ltd 23 5 18 KSh 35,001 to KSh 50,000 3 17,160 - 15,600 - 24 HF Bank 11,340 11,340 24 Transnational Bank Ltd 12,880 10 Development Bank of Kenya Ltd 26 17 9 KSh 50,001 to KSh 70,000 3 17,160 - 15,600 - 25 I & M Bank 10,680 10,680 25 Bank of Africa 12,888 10 I & M Bank 26 14 12 26 Imperial Bank Ltd ® - - 26 Habib AG Zurich 13,056 11 DIB Bank Kenya Ltd 27 23 4 27 Diamond Trust Bank Kenya Ltd 13,505 27 Jamii Bora Bank 14,860 14,860 12 Family Bank Ltd 29 8 21 § Sending KSh 1,000 three times a week within Mpesa 28 Guardian Bank Ltd 13,690 28 Kenya Commercial Bank Ltd 11,430 11,430 KSh 2,340 Equitel KSh 1,716; 29 National Industrial Credit Bank Ltd 13,710 12 Kenya Commercial Bank Ltd 29 12 17 would cost per year; within 29 Mayfair Bank Ltd 11,700 - 30 Paramount-Universal Bank Ltd 13,720 12 Standard Chartered Bank Ltd 29 27 2 T-Kash (formerly Orange Money) KSh 2,340; Airtel Money 30 Middle East Bank of Kenya Ltd 15,840 15,840 31 National Bank of Kenya Ltd 13,730 12 Victoria Commercial Bank Ltd 29 19 10 does not charge its subscribers to send money within 31 M Oriental Commercial Bank 12,385 12,385 32 Stanbic Bank Limited 14,040 13 Paramount-Universal Bank Ltd 31 1 30 the network. Equitel is the second cheapest of the four 32 National Bank of Kenya Ltd 13,730 13,730 33 Gulf African Bank 14,160 14 Guardian Bank Ltd 33 5 28 33 National Industrial Credit Bank Ltd 13,710 13,710 providers, while using T-Kash and Mpesa would cost the 34 Jamii Bora Bank 14,860 14 Sidian Bank Ltd 33 10 23 34 Paramount-Universal Bank Ltd 13,720 13,720 35 SBM Bank Ltd 14,940 same 15 Mayfair Bank Ltd 35 13 22 35 Prime Bank Ltd 9,880 9,880 36 Spire Bank 15,520 15 Middle East Bank of Kenya Ltd 35 16 19 § Sending KSh 2,500 three times a week within Mpesa 36 SBM Bank Ltd 14,940 14,940 37 GT Bank Ltd 15,780 16 Barclays Bank of Kenya Ltd 36 28 8 would cost KSh 6,240 per year; within Equitel KSh 4,290; 37 Sidian Bank Ltd 12,660 12,660 38 Middle East Bank of Kenya Ltd 15,840 38 Spire Bank 15,520 15,520 39 Bank of India 16,428 17 Commercial Bank of Africa 42 27 15 T-Kash KSh 4,680; Airtel Money does not charge its 39 Stanbic Bank Limited 14,040 14,040 Average Annual Cost 11,913 18 Bank of Africa 43 18 25 subscribers to send money within the network. Equitel is 40 Standard Chartered Bank Ltd 6,680 6,680 18 Bank of Baroda (K) Ltd 43 29 14 the second cheapest of the four providers, while Mpesa 19 Diamond Trust Bank Kenya Ltd 48 21 27 41 Transnational Bank Ltd 12,880 12,880 5. Tariff Survey – 2018 Overall Ranking would be the most expensive 42 UBA Kenya Bank 8,200 8,200 19 Transnational Bank Ltd 48 24 24 The Overall Tariff Rankingcombines the rank achieved § Sending KSh 5,000 three times a week within Mpesa 43 Victoria Commercial Bank Ltd 10,500 10,500 20 Bank of India 49 10 39 by each bank in the two main banking sectors covered in would cost KSh 9,360 per year; within Equitel KSh 4,290; Average Annual Cost 11,913 12,085 21 First Community Bank 50 30 20 4.4 Retail Banking Ranking Table – 2018 Banks with the the survey, mainly the SME and Retail Banking sectors. 21 GT Bank Ltd 50 13 37 T-Kash KSh 7,800; making Equitel the second cheapest of the four providers, while T-Kash would be the most Lowest Charges 5.1 Ranking Table - 2018 Banks with the Lowest 22 Spire Bank 51 15 36 Rank Bank 2018 Charges 23 Gulf African Bank 55 22 33 expensive 1 Equity Bank Limited 6,430 24 National Industrial Credit Bank Ltd 56 27 29 § Sending KSh 10,000 three times a week within Mpesa 2 Standard Chartered Bank Ltd 6,680 25 National Bank of Kenya Ltd 57 26 31 would cost KSh 13,260 per year; within Equitel KSh 4,290; 26 Habib AG Zurich 58 32 26 3 African Banking Corporation Ltd 7,080 T-Kash KSh 12,480; making Equitel the second cheapest 26 M Oriental Commercial Bank 58 20 38 4 DIB Bank Kenya Ltd 7,680 of the four providers, while Mpesa would be the most 27 SBM Bank Ltd 60 25 35 5 UBA Kenya Bank 8,200 expensive 28 Jamii Bora Bank 65 31 34 Equity Bank Ltd with an annual cost of KSh 6,430 is the bank 28 Stanbic Bank Limited 65 33 32 with lowest charges in Retail Banking. 108 BANKING SURVEY | 2018 BANKING SURVEY | 2018 109 Tariff Survey 2018 Tariff Survey 2018 Mpesa Sending Cost Calculations Estimated Annual Cost of Withdrawing Money § Withdrawing KSh 1,000 three times a week from Mpesa Estimated Cost Weekly Monthly Annual % 2018 2017 Comparison (Within Network by Registered would cost KSh 4,212 per year; from Equitel KSh 3,900; T-Kash (formerly Orange Money) KSh 3,900; Airtel Money KSh Transaction Amount Rate Freq KSh Freq KSh Freq KSh KSh users only) Upto KSh 49 1 3 3 12 12 156 - 156 156 1,560 which is 8% higher than the KSh 1,404 it cost in 2017; Estimated Annual Cost Withdrawals from Agency Network KSh 50 to KSh 100 3 3 9 12 36 156 - 468 468 Airtel Money is the cheapest of the four providers, while Transaction Amount Frq/Wk Mpesa Equitel T-Kash Airtel KSh 101 to KSh 500 11 3 33 12 132 156 - 1,716 1,716 Mpesa is the most expensive Upto KSh 49 3 - 3,900 - - § KSh 2,500 Mpesa KSh 501 to KSh 1,000 15 3 45 12 180 156 - 2,340 2,340 Withdrawing three times a week from KSh 50 to KSh 100 3 1,560 3,900 1,560 1,560 would cost KSh 4,212 per year; from Equitel KSh 3,900; KSh 1,001 to KSh 1,500 25 3 75 12 300 156 - 3,900 3,900 KSh 101 to KSh 500 3 4,212 3,900 3,900 1,560 T-Kash KSh 3,900; Airtel Money KSh 7,644 which is 88% KSh 1,501 to KSh 2,500 40 3 120 12 480 156 - 6,240 6,240 KSh 501 to KSh 1,000 3 4,212 3,900 3,900 1,560 higher than the KSh 4,056 it cost in 2017; Equitel and Orange KSh 2,501 to KSh 3,500 55 3 165 12 660 156 - 8,580 8,580 KSh 1,001 to KSh 1,500 3 4,212 3,900 3,900 7,644 Money have the same annual cost, while Mpesa is the KSh 3,501 to KSh 5,000 60 3 180 12 720 156 - 9,360 9,360 KSh 1,501 to KSh 2,500 3 4,212 3,900 3,900 7,644 second most expensive of the four service providers KSh 5,001 to KSh 7,500 75 3 225 12 900 156 - 11,700 11,700 KSh 2,501 to KSh 3,500 3 7,644 7,020 7,020 10,296 § Withdrawing KSh 5,000 three times a week from Mpesa KSh 7,501 to KSh 10,000 85 3 255 12 1,020 156 - 13,260 13,260 KSh 3,501 to KSh 5,000 3 10,296 7,020 9,360 10,296 would cost KSh 10,296 per year; from Equitel KSh 7,020; KSh 10,001 to KSh 15,000 95 3 285 12 1,140 156 - 14,820 14,820 KSh 5,001 to KSh 7,500 3 12,792 11,700 11,700 12,792 T-Kash KSh 9,360; Airtel Money KSh 10,296 which is 47% KSh 15,001 to KSh 20,000 100 3 300 12 1,200 156 - 15,600 15,600 KSh 7,501 to KSh 10,000 3 17,160 11,700 15,600 12,792 higher than the KSh 7,020 it cost in 2017; Equitel is the KSh 20,001 to KSh 35,000 110 3 330 12 1,320 156 - 17,160 17,160 KSh 10,001 to KSh 15,000 3 24,804 22,620 23,400 17,160 cheapest, followed by T-Kash, while Mpesa and Airtel are KSh 35,001 to KSh 50,000 110 3 330 12 1,320 156 - 17,160 17,160 KSh 15,001 to KSh 20,000 3 27,456 22,620 24,960 17,160 the most expensive KSh 50,001 to KSh 70,000 110 3 330 12 1,320 156 - 17,160 17,160 KSh 20,001 to KSh 35,000 3 29,172 26,520 26,520 24,804 § Withdrawing up to KSh 10,000 three times a week from KSh 35,001 to KSh 50,000 3 42,900 30,420 39,000 27,456 Mpesa would cost KSh 17,160 per year; from Equitel KSh Equitel Sending Cost Calculations KSh 50,001 to KSh 70,000 3 51,480 35,100 46,800 29,172 11,700; T-Kash KSh 15,600; Airtel Money KSh 12,792 which is Estimated Cost Weekly Monthly % 2018 2017 § 9% higher than the KSh 11,700 it cost in 2017; Equitel is the Transaction Amount Rate Freq KSh Freq KSh Freq KSh KSh cheapest, followed by Airtel Money and T-Kash, while Mpesa § Upto KSh 49 - 3 - 12 - 156 - - - KSh 50 to KSh 100 1.1 3 3.3 12 13.2 156 - 171.6 171.6 would be the most expensive KSh 101 to KSh 500 5.5 3 16.5 12 66.0 156 - 858 858 KSh 501 to KSh 1,000 11.0 3 33.0 12 132.0 156 - 1,716 1,716 Mpesa Withdrawal Cost Calculations KSh 1,001 to KSh 1,500 27.5 3 82.5 12 330.0 156 66.7% 4,290 2,574 Estimated Cost Weekly Monthly % 2018 2017 KSh 1,501 to KSh 35,000 27.5 3 82.5 12 330.0 156 - 4,290 4,290 Transaction Amount Rate Freq KSh Freq KSh Freq KSh KSh § The cost of sending KSh 1,500 three times a week within Equitel has increased by 66.7% from KSh 2,574 per year in 2017 to KSh Upto KSh 49 - 3 - 12 - 156 - - - 4,290 in 2018 KSh 50 to KSh 100 10 3 30 12 120 156 - 1,560 1,560 KSh 101 to KSh 500 27 3 81 12 324 156 - 4,212 4,212 KSh 501 to KSh 1,000 27 3 81 12 324 156 - 4,212 4,212 T-Kash Sending Cost Calculations KSh 1,001 to KSh 1,500 27 3 81 12 324 156 - 4,212 4,212 Estimated Cost Weekly Monthly Annual % 2018 2017 KSh 1,501 to KSh 2,500 27 3 81 12 324 156 - 4,212 4,212 Transaction Amount Rate Freq KSh Freq KSh Freq KSh KSh KSh 2,501 to KSh 3,500 49 3 147 12 588 156 - 7,644 7,644 Upto KSh 49 - 3 - 12 - 156 - - - KSh 3,501 to KSh 5,000 66 3 198 12 792 156 - 10,296 10,296 KSh 50 to KSh 100 - 3 - 12 - 156 - - - KSh 5,001 to KSh 7,500 82 3 246 12 984 156 - 12,792 12,792 KSh 101 to KSh 200 - 3 - 12 - 156 - - 4,680 KSh 7,501 to KSh 10,000 110 3 330 12 1,320 156 - 17,160 17,160 KSh 201 to KSh 500 10 3 30 12 120 156 -67% 1,560 4,680 KSh 10,001 to KSh 15,000 159 3 477 12 1,908 156 - 24,804 24,804 KSh 501 to KSh 1,000 15 3 45 12 180 156 -50% 2,340 4,680 KSh 15,001 to KSh 20,000 176 3 528 12 2,112 156 - 27,456 27,456 KSh 1,001 to KSh 1,500 20 3 60 12 240 156 -33% 3,120 4,680 KSh 20,001 to KSh 35,000 187 3 561 12 2,244 156 - 29,172 29,172 KSh 1,501 to KSh 2,500 30 3 90 12 360 156 - 4,680 4,680 KSh 35,001 to KSh 50,000 275 3 825 12 3,300 156 - 42,900 42,900 KSh 2,501 to KSh 3,500 40 3 120 12 480 156 33% 6,240 4,680 KSh 50,001 to KSh 70,000 330 3 990 12 3,960 156 - 51,480 51,480 KSh 3,501 to KSh 5,000 50 3 150 12 600 156 67% 7,800 4,680 KSh 5,001 to KSh 7,500 60 3 180 12 720 156 100% 9,360 4,680 KSh 7,501 to KSh 10,000 80 3 240 12 960 156 167% 12,480 4,680 Equitel Withdrawal Cost Calculations KSh 10,001 to KSh 15,000 80 3 240 12 960 156 167% 12,480 4,680 Estimated Cost Weekly Monthly % 2018 2017 KSh 15,001 to KSh 20,000 80 3 240 12 960 156 167% 12,480 4,680 Transaction Amount Rate Freq KSh Freq KSh Freq KSh KSh KSh 20,001 to KSh 25,000 100 3 300 12 1,200 156 233% 15,600 4,680 Upto KSh 2,500 25 3 75 12 300 156 - 3,900 3,900 KSh 25,001 to KSh 35,000 100 3 300 12 1,200 156 233% 15,600 4,680 KSh 2,501 to KSh 5,000 45 3 135 12 540 156 - 7,020 7,020 KSh 35,001 to KSh 40,000 100 3 300 12 1,200 156 150% 15,600 6,240 KSh 5,001 to KSh 10,000 75 3 225 12 900 156 - 11,700 11,700 KSh 40,001 to KSh 45,001 100 3 300 12 1,200 156 150% 15,600 6,240 KSh 10,001 to KSh 20,000 145 3 435 12 1,740 156 - 22,620 22,620 KSh 45,001 to KSh 50,000 100 3 300 12 1,200 156 150% 15,600 6,240 KSh 20,001 to KSh 35,000 170 3 510 12 2,040 156 - 26,520 26,520 KSh 50,001 to KSh 70,000 100 3 300 12 1,200 156 100% 15,600 7,800 KSh 35,001 to KSh 50,000 195 3 585 12 2,340 156 - 30,420 30,420 KSh 50,001 to KSh 100,000 225 3 675 12 2,700 156 35,100 35,100 110 BANKING SURVEY | 2018 BANKING SURVEY | 2018 111 Tariff Survey 2018 T-Kash Withdrawal Cost Calculations Estimated Cost Weekly Monthly % 2018 2017 Transaction Amount Rate Freq KSh Freq KSh Freq KSh KSh Upto KSh 49 - 3 - 12 - 156 - - - KSh 50 to KSh 100 10 3 30 12 120 156 - 1,560 - KSh 101 to KSh 200 25 3 75 12 300 156 - 3,900 3,900 KSh 201 to KSh 500 25 3 75 12 300 156 - 3,900 3,900 KSh 501 to KSh 1,000 25 3 75 12 300 156 - 3,900 3,900 KSh 1,001 to KSh 1,500 25 3 75 12 300 156 - 3,900 3,900 KSh 1,501 to KSh 2,500 25 3 75 12 300 156 - 3,900 3,900 KSh 2,501 to KSh 3,500 45 3 135 12 540 156 - 7,020 7,020 KSh 3,501 to KSh 5,000 60 3 180 12 720 156 33% 9,360 7,020 KSh 5,001 to KSh 7,500 75 3 225 12 900 156 - 11,700 11,700 KSh 7,501 to KSh 10,000 100 3 300 12 1,200 156 33% 15,600 11,700 KSh 10,001 to KSh 15,000 150 3 450 12 1,800 156 3% 23,400 22,620 KSh 15,001 to KSh 20,000 160 3 480 12 1,920 156 10% 24,960 22,620 KSh 20,001 to KSh 25,000 170 3 510 12 2,040 156 - 26,520 26,520 KSh 20,001 to KSh 35,000 170 3 510 12 2,040 156 - 26,520 26,520 KSh 35,001 to KSh 40,000 250 3 750 12 3,000 156 28% 39,000 30,420 KSh 40,001 to KSh 45,001 250 3 750 12 3,000 156 28% 39,000 30,420 KSh 45,001 to KSh 50,000 250 3 750 12 3,000 156 28% 39,000 30,420 KSh 50,001 to KSh 70,000 300 3 900 12 3,600 156 33% 46,800 35,100 Airtel Money Withdrawal Cost Calculations Estimated Cost Weekly Monthly % 2018 2017 CEO INTERVIEWS Transaction Amount Rate Freq KSh Freq KSh Freq KSh KSh Upto KSh 49 - 3 - 12 - 156 - - KSh 50 to KSh 100 10 3 30 12 120 156 11% 1,560 1,404 KSh 101 to KSh 1,000 27 3 81 12 324 156 8% 4,212 3,900 KSh 1,001 to KSh 2,500 49 3 147 12 588 156 88% 7,644 4,056 KSh 2,501 to KSh 5,000 66 3 198 12 792 156 47% 10,296 7,020 Banking KSh 5,001 to KSh 10,000 82 3 246 12 984 156 9% 12,792 11,700 KSh 10,001 to KSh 20,000 110 3 330 12 1,320 156 -24% 17,160 22,620 KSh 20,001 to KSh 35,000 159 3 477 12 1,908 156 -9% 24,804 27,300 Survey 2018 KSh 35,001 to KSh 50,000 176 3 528 12 2,112 156 -35% 27,456 42,120 KSh 50,001 to KSh 100,000 187 3 561 12 2,244 156 -43% 29,172 51,480 112 BANKING SURVEY | 2018 BANKING SURVEY | 2018 113 CEO INTERVIEWS CEO INTERVIEWS GULF AFRICAN BANK’S strategic BOI: Performs well on the plan TARGETS youth and SMEs backdrop of a tumultuous year 2018 brought in good tidings for Mr. Abdalla Abdulkhalik, Managing Director, Gulf African Bank Kenya having received an award and inducted into the African CEO’s Bank of India Kenya has a special place in Kenya’s history having been in existence for the past Hall of Fame by the Africa Leadership Magazine at the Sandton Convention Centre 65 years along with a current total asset base standing at US$566.42 million (Ksh 57.29 billion). Johannesburg, South Africa. This was for his efforts towards promoting entrepreneurship The bank opened its doors for the first time in October 1953 in the coastal town of Mombasa, thereafter in March 1954 the Nairobi branch was opened, in a heritage building which was and development in Africa. once the National Assembly of Kenya. Up to date the Bank has a total of 6 branches with approximately 90 employees and about 7000 active accounts. — Agyey Kumar Azad, CEO Bank of India, Kenya “The recognition was based on the initiatives we have transactions, we focused mainly on trade business and taken to support the SME businesses in particular the we managed to get lines with other international banks women segment of the community. Over the last two doing a reasonable size in trade. Thirdly it was our years we have been developing programmes for women financing whereas other banks slowed down, our overall to enable and support women entrepreneurs which lending grew from Ksh 16 bn in 2016 to more than Ksh was informed by the new constitutional requirement 19 billion in 2017, our deposit base grew from Ksh 19 that a third of the government tenders need to go to billion in 2016 to Ksh 25 bn in 2017 which is a remarkable The year 2017 was quite a good year for the bank having This is based on the fact that some financial institutions women youth and people with disabilities. We came to compared to the industry performance.” Mr. Abdulkhalik recorded a profit after tax of Ksh 1.39 billion in the last have collapsed in Kenya due to poor loan portfolio the realization that the tenders set aside for women are points out. quarter of 2017 compared to Ksh 886.85 million in the procedures and poor governance that had adverse effects on not really being acquired by the women because they Mr. Abdulkhalik further states that the rate at which second quarter of 2017. Total interest income went up to their performance. are not able to source financing from banks which in deposits are growing has no strain on capital. He reveals Ksh3.78 billion in the last quarter of the same year from Ksh “Our Loan portfolio focuses on manufacturing, real return require collateral like the title deeds or developed that the bank is sufficiently capitalized at way above 2.44 billion in the second quarter of 2017. estate, business and agriculture. We have very few personal properties. I discovered to to my surprise that only 2 per Ksh 4bn. The lender has gone ahead to negotiate a Tier II “Our growth was moderate whereby deposits grew loans. The average loan size is about Ksh 40-50 million” he cent of title deeds were issued to women while the rest capital with one of its shareholders of US$ 17 million an to 16-17per cent as well as 9 per cent on portfolio credit adds are in the hands of men. As Gulf African bank we came it has used only US$ 4mn, “we still have US$ 13mn, but growth. Additionally, there was a growth of more than 20 As other lenders continue to feel the lasting impact of up with products to enable women access we have not seen the need to use it per cent on both the top-line and bottom-line. We also the interest rate capping, Mr.Azad says that Bank of India up 20 per cent unsecured financing. It’s yet.” He adds have less non-performing assets(NPA’s), with more than Kenya has felt the most minimum impact since the interest “We shifted focus on other a big risk but someone has to step in and Going forward the bank sees a 90 per cent of the accounts performing quite well. We also rates of the rate cap are marginal to what they charge. areas of the market for do it.” Says Mr. Abdalla Abdulkhalik, very robust 2018 having put in place a increased our non-interest income. They also have dollar loans in different Managing Director, Gulf African Bank example we performed 3 –year strategic plan. Concentrating Furthermore we were not aggressive currencies making the margins almost Contrary to popular belief on on SME’s and youth helping and on taking deposits thus reducing high “Our Loan portfolio intact. very well in our foreign the issue of delays on payment improving their lives, “ we are costs on deposits. As it stands we don’t Banking technology and fintech focuses on manufacturing, of government tender funds Mr. exchange transactions, we speaking to NGO’s and partners on have deposits earning more than 9.5 has rapidly been adopted by most Abdulkhalik notes that delays have not focused mainly on trade doing capacity building for the SMEs per cent. When all that is put together real estate, business and financial institutions in the country been as awful, which is understandably teaching them on how to operate it impacted our bottom line positively. putting Kenya in the lead among other business we managed agriculture. We have very caused by bureaucracy. The major their businesses professionally, keep I am recruiting manpower right now East African countries. This has not delays are however from the county to get lines with other records and win tenders. We have in as other banks are laying off.” says few personal loans. The been the case for Bank of India Kenya governments since they have to also wait international banks doing a incorporated that in Gulf bank and Agyey Kumar Azad CEO Bank of India with Mr. Azad explaining that the average loan size is about on the national government. now 20 per cent of our procurement Kenya. slow adoption is related to the limited reasonable size in trade.” However, despite the 2017 of stationeries and the like goes to Mr. Azad is hopeful that 2018 customer base, making it uneconomical Ksh40-50 million” political upheavals caused by the long women, we have to walk the talk.” he will be a much stable year compared to offer fintech type services like mobile electioneering period and lasting effects affirms to 2017 which was accompanied by loans. He however says that internet of the interest rate cap for most lenders, the bank Mr. Abdulkhalik goes on to encourage non muslims a long electioneering period. He goes on to say that the banking and pesa-link services are available for its clients. performed reasonably well, there was a flat growth rate clients to try out Shariah compliant banks adding that bank will not be affected by the newly introduced IFRS He confirms that Bank of India itself has aggressively as well as retention in numbers. the whole idea of Islamic banking is not to profit from 9, new accounting standard regulations given that the adopted technology. He notes, it was challenging making customers and your customers but empower people. Shariah does not bank’s NPA’s is the lowest in the industry. Even with the “At the rate which we are going in the next five years investors do more business because they took a wait allow you to take advantage of your customer. fundamental change of provisioning for expected losses we will double our business in terms of loan book and and see approach. There is also the issue of banks being “That is why interest is not allowed in Islamic requiring banks to set aside funds by way of anticipation of deposit. He however adds that the government will drive going into receivership in 2016-2017 leading to a loss of banking. People find the banks to be more friendlier and loan losses, Mr. Azad confirms that the bank is not worried growth in the banking sector if they are focused in growing confidence for smaller banks. Rebuilding that has taken reasonable,” he concludes. because it has a good share capital of about Ksh 10billion. as well.” He concludes a while. Loan portfolio management has openly shown a direct “We shifted focus to other areas of the market, for impact in the performance of most banking institutions. example we performed very well in our foreign exchange 114 BANKING SURVEY | 2018 BANKING SURVEY | 2018 115 CEO INTERVIEWS CEO INTERVIEWS SMEP: churches remain a major SUMAC: Growth is the only path vehicle of transformation moving forward Established in 2004, Sumac Microfinance Bank was an initiative by group friends who got together as a ‘chama’ to lend to small and medium enterprises, who found it hard to borrow with SMEP Microfinance Bank started out in 1975 as a relief arm of the National Council of Churches of the stringent loan requirements by commercial banks. The ‘chama’ grew within a small office in a Kenya (NCCK). This program’s objective was to feed the poor people in Nairobi’s Mathare slum. Later on, college house and until 2011 when they decided to expand their operations and office space. NCCK realized that the poor needed to be self-reliant and economically empower and thus converted — John Njihia, CEO Sumac Microfinance Bank the feeding program into a micro-credit scheme known as Small Scale Business Enterprise (SSBE). — Simon Kamore CEO SMEP “In 2012 we were granted a national license by the banking system which has enabled us to have innovative Central Bank as a microfinance bank and we started products. Previously we did not have current accounts taking deposits from the public. By then we had only but now we have them, we are also doing cheque books.” one branch in Ngara, Park Road. We later moved our He is quick to note that by 2019, the bank plans head office to the central business district and a branch to start agency banking. They will start an advertising in the same building. After sometime, the branch was campaign to introduce themselves to the market. They In 1998 the Small Scale Business Enterprise (SSBE) was Ksh 1.65 billion and we are coming up with new and relocated to a different building.” says John Njihia, CEO will also move to mobile loans instead of having the renamed Small and Micro Enterprise Programme and innovative ways to grow and reach as many people as Sumac Microfinance Bank customer go to the bank physically. Everything they in 1999 it was incorporated as a company limited by possible with products that will answer to their needs.” Mr. Njihia reveals that the founders are keen on have now is physical. They are currently crafting the guarantee. states Mr. Kamore identifying gaps where mainstream banks and other product for mobile loans. On December 14, 2010, SMEP was awarded a deposit Mr. Kamore admits that 2017 was a tough year gien financial services players have not ventured. The “Sumac’s operations run on ICBS core banking, taking license by the Central Bank of Kenya. Making it the long electioneering period that affected businesses team has opened another branch at Githunguri to this is a more robust system. We have been slow on the third deposit taking microfinance institution (MFI) in hence reducing cash flows for small businesses. He serve farmers in agribusiness and renewable energy mobile tech because, once you open it you cannot close Kenya. The firm’s name was then changed to SMEP DTM goes on to say that business was heavily affected with where they were involved in production of biogas and it. We have been fundraising and we now have a good i.e. SMEP Deposit Taking Microfinance. projections in terms of growth not materializing. New agriculture value chain. In 2017 December, they opened fund and can establish advance technology in banking.” “This transition made us more credible and we programmes that had been planned for roll out as well as a 4th branch in Nakuru. emphasizes Mr.Njihia were able to mobilize deposits. But we have grown financiers who had come to provide for business adopted Currently their deposits stand at Ksh 450 million The bank needs capital injected both equity and exponentially. This shift has two sides of the coin had to wait. “We are however optimistic about 2018 along with the loan book portfolio of Ksh 750 million. debt. Share capital is at Ksh 244 million and they are because with it came a lot of costs since we did not have and hopefully the political temperatures will not flare He also notes Sumac Microfinance Bank has total assets looking for Ksh 0.5 billion capital both in debt and other financiers we had to use internal resources.” says up again creating a peaceful business environment.” He worth Ksh1 billion. equity. This will allow them double their loan book. Simon Kamore CEO SMEP. adds. In 2016, the bank made a profit before tax of Ksh Following the requirements that banks comply with The firm adopted the name SMEP “We however managed to contain 17 million. Mr.Njihia admits 2017 was a tough year due the IFRS 9, accounting regulations Mr. Njihia points out Microfinance Bank in 2013 in line with “We however managed to our non performing loans (NPL’s) to the protracted electioneering period that Sumac has begun complying the Microfinance Amendment Act of contain our non performing compared to the close of 2016, but which disrupted growth hence the “Sumac’s operations run on with the accounting requirements. 2013. The firm entered the insurance loans (NPL’s) compared growth was impeded, purely because decreasing income. The customers also ICBS core banking, this is a From January 2018, their business in 2015 with the launch of its of the costs of deposits. Retaining were uncertain, making their uptake of provisions for non-performing subsidiary, the SMEP Insurance Agency to the close of 2016, but deposits we had was costly and costs of loans and repayment slow. more robust system. We have loans increased. This explains why Company. growth was impeded, operations was high as well.” adds Mr. The bank has covered significant been slow on mobile tech they are looking for equity capital “From there we expanded opening purely because of the costs Kamore milestones since its establishment. In because, once you open it so that they are not affected in several more branches. We started with Mr. Kamore points out that banks 2016, it moved from tier 3 to tier 2 in the terms of capital adequacy. Tumaini went ahead to open in Mwea, of deposits retaining the should be allowed to do business microfinance segment with a market you cannot close it.” Corporate Governance in Mombasa Nkurummah road, Maua and deposits we had was high and compete, he adds that the laws share of 1.3 per cent in 2016. They have Sumac is as required by the Central Nakuru branches. To date we have been regulating lenders is not of any help employed 45 staff across all branches. Bank, Mr. Njihia says and is quick able to grow the banking branches to 18 and costs of operations with the heavy government borrowing The aggressive Sumac teams led by Mr. Njihia looks to elaborate that the board has various committees across the country and we are opening was high as well.” crowding out the banking sector. forward to doing Ksh 150 million loans every month, which monitor operations of the bank. Shareholders another one in Ngong very soon.” He The church affiliated bank hopes to and close the year at Ksh 1.5 billion. The team also looks have to borrow as any other client does. Insider loans adds. conquer and tap into other different forward to opening another branch; they have already are very few and are treated as per laid down regulations With more than 267,000 current accounts and 30,000 markets. “We want to grow SMEP into a household name done a feasibility study of a marketing unit. and ought to be approved by the whole board. “If a board on loans, the micro finance bank serves the customers in every church. We see churches remaining a major “ Marketing units are marketing offices; but director wants a loan, it is no longer a management issue through three main business lines, Micro division, vehicle of transformation. We want to venture into deposits are not received in these units. Marketing but it is discussed at the board level and the same is the SME; individuals that cannot fit within the group those markets because we believe that the church gives unit is cheaper to start than a branch considering the reported to CBK.” Njihia notes. framework can also borrow as long as they are secure and us a platform to serve people. We will also continue to standards to be met for a branch by Central Bank.” notes “By 2022, we are looking forward to being a tier have a bit of history with the bank or other banks. Lastly heavily invest in technology and partner with technology Mr.Njihia 1 microfinance bank with a market share of 5 per cent there is a segment focusing on churches and related providers. Strategic partnerships will in addition be key Innovation is key for financial institutions where and having presence in the entire country in the major institutions that need financial services. to moving forward.” conludes Mr.Kamore. products should suit the needs of the consumers who towns. We want to have branches in those towns.” “Our loan book has Ksh 1.9 billion and deposits of are a key part of their business. “In 2015 we got a core explains Mr. Njihia. 116 BANKING SURVEY | 2018 BANKING SURVEY | 2018 117 CEO INTERVIEWS CEO INTERVIEWS PRIME BANK Propelling on more The turnaround strategy is regional growth and digitization stirring hope at Sidian Bank The reality of the effect of interest rate cap and challenges that come with rebranding have been among the hard nuts Sidian bank has been trying to crack for the last one year. Having rebranded from K-Rep, a microfinance bank that had been in existence for over 30 years, Sidian Bank had to Prime Bank Ltd is one of the leading private commercial banks in Kenya that was founded in introduce itself to their target market and public in general. 1992, with a total number only 20 employees at the time. The tier II bank marked 25 years since — Mr. Chege Thumbi CEO Sidian Bank inception in 2017. With current a total asset base of Ksh 73.6 billon the lender has also regional presence in Malawi, Botswana, Mozambique and Zambia. “I joined Sidian Bank in the beginning of August 2017, a time banks business model.” — Mr. Bharat Jani Managing Director, Prime Bank when it reported losses. The good thing is that I saw potential; He noted that the tough macroeconomic environment in a huge customer base of 0.5 million, a good branch network 2017 hurt Sidian Bank as it did to other players, “Economically and strong shareholders (Centum Group), a rich history in 2017 was difficult, we saw an impact on the performance of Prime Bank has currently employed over 400 staff members reveals. supporting SMEs. My aim is to leverage on the strong points of SMEs dealing with county and national government. There was across all its operations and has in excess of 30,000 individual Mr. Jani asserts that the introduction of IFRS 9 will have the bank.” says Mr. Chege Thumbi CEO Sidian Bank. delay in payments. Some of their loans were in arrears for some and corporate customers with loans extended to over 4000 minimal impact on the bank’s operations since only 3.4 per Banking on this potential he explains that they setup a time.” customers. cent of the loan book is non-performing. “However we have turnaround strategy in the bank that saw liquidity improve by Sidian reported Ksh 274 million loss in the year ended “From our first Branch at Kenindia House in 1992, the Bank already reviewed our credit policy in order to realign with the about 25 per cent and trade finance rose to over Ksh 6 billion by September 2017 compared to a net profit of Sh220 million made now has 20 branches across the country with the latest entry IFRS 9 requirements. “ he says December 2017. He further notes that they made their business in a similar period a year earlier. at the UAP/ Old Mutual Towers. Over the 25 years, the Bank “The bottom line adverse impact of the interest capping model client centered, focusing on providing practical solutions Being in a technologically evolving world Mr. Chege notes has achieved remarkable milestones which have made the law on our net profit is around 2 per cent compared to the and doing things in a different way. that the bank is automating its processes investing heavily in brand a respectable institution in the banking sector in Kenya. industry’s average of 12 per cent. Our average lending rates The Sidian team leader adds that the transformation of the system upgrades. “We are investing in a robust internet and The year 2017 availed us an opportunity to celebrate our were only marginally lower than the capped interest rates. bank started around 2015 but had shocks when Imperial Bank mobile banking. And also working with partners to integrate glorious past as we look forward to shaping our future filled In addition, we have embarked on boosting our income while and Chase Bank collapsed in 2016 scaring away customers and all our systems, to be able to provide end to end solutions to with innovation and progress,” says Mr. Bharat Jani Managing reducing our expenditure through austerity initiatives.” He thereafter the interest cap was introduced. our customers right from salary processing, cash management, Director, Prime Bank. says. “We are in the middle of a transition so some things may origination of big bonds, where customers can originate the In the course of last year, Prime Bank acquired 80 per cent He adds that during the 2016 financial year, the bank’s loan work while others may not work. My view is that the shocks request and we deliver the request to them in an automated shareholding of Tausi Assurance Limited along with acquiring book stood at KSh 39.3 billion compared to Ksh 38.7 billion in around the failure of some banks are the ones that caused the manner.” majority shareholding of Barclays Bank of Zimbabwe through 2017 indicating a slight decrease in loan uptake. bank not to perform well. We expect 2018 to be better.” He Mr.Chege’s vision for Sidian Bank is to make it a strong tier First Merchant Bank. Prime Bank has adopted technology reveals that Sidian Bank is in a strategic partnership with the 2 bank by 2022, with a balance sheet in excess of Ksh 60 billion. “We are the only Kenyan bank that “The bottom line adverse and fintech extensively with the launch national Chamber of Commerce through which they can reach Shareholders have committed more capital, Ksh 1.5 billion this more customers across the country. This partnership is to use year, to help them continue growing. has ventured into the South African impact of the interest of virtual branches -the intelligent ATMs Development Community (SADC) - with multi-functional capabilities some of the excess space in their branches He hopes to sustain the momentum markets with presence in Malawi since capping law on our net including cash deposit and withdrawal, to set up business hubs where any customer Sidian Bank, just like other that started last year. He reveals, “We do 1995 through First Merchant Bank and profit is around 2 per cent cheque deposits at any time, day or night, or member of the Chamber of Commerce can banking industry players not have plan to raise money in the stock in Botswana since 2008 through Capital bill payment for utilities, just to mention have dedicated place where they can meet market, already our main shareholder is Bank Botswana; we are also present compared to the industry’s a few. The lender has also launched the and discuss business and structure financial were hard hit by the interest listed. They have given us a promise that through First Capital Bank both in average of 12 per cent. Our banking on wheels concept – a fully solutions. They aim at starting with Kenyatta rate cap leading to a 30 per capital will not be a challenge.” Mozambique and Zambia.” Adds Mr.Jani average lending rates were functional mobile unit branch delivering Avenue, which will be fully operational in the cent decrease in net interest Mr.Chege says he is a team player. 2017 was not an easy year for most a full range of banking services with the next few months. After that, they hope to roll “Having risen from a teller I understand lenders in the country mainly due to only marginally lower than aim of taking its services closer to its it out to the rest of the country especially in income. “Interest income has many challenges my colleagues go the long electioneering period and the capped interest rates.” customers. The bank however does not county headquarters where they have presence. come down but the interest through. I am part of them; I focus more bitter taste left on the mouths after the have a mobile lending platform but is Currently they have 40 branches across the expense has not reduced at on providing solutions than blaming interest rate cap in 2016, which made considering the idea in the future. country. anyone.” banks device new ways to stay afloat. Mr. Jani says high dependence on technology, fraud, Sidian Bank, just like other banking the same rate because of the His engineering background has For Prime Bank however, Mr. Jani says the growth was competition from new entrants, credit risk and risk industry players were hard hit by the interest floor on deposits. shaped him to be a solution provider satisfactory and organic from investments in government bills management quality are the biggest threats to East Africa’s rate cap leading to a 30 per cent decrease in net to colleagues and clients. “Many value and bonds. We remained focused on ways to boost our income banking sector. He goes on to say that the future of the interest income. “Interest income has come customers value knowledge, when you while reducing avoidable expenditure. He is however hopeful. banking sector lies in leveraging technology, innovation and down but the interest expense has not reduced at the same rate sit with the customers and you give them a different view, they 2018, he says is equally significant to to the bank as they diversification of distribution channels. Through this, banks because of the floor on deposits. There is minimum interest that will value it more than probably walking out with money.” He embark on the second phase of their strategic plan that aims will be able to drive efficiency in operations in order to serve we can pay. Customers will not accept the bare minimum, they further explains to position Prime Bank as a key player in the banking sector in customers better with relevant products that meet their ask for more especially when they competing with treasury bills From where he sits, he notes that the banking sector needs the region. expectations and bonds. The upper cap is 14 percent put the lower limit can go to focus on needs of the middle class; housing, educations. SMEs “We are above board with our non performing loans under When asked about Prime Bank’s growth plan in the next as low as 10 percent. The margin can go as low as 4 percent.” Mr. will be the key drivers of the economy, he says control at 3.4 per cent compared to the industry’s 8.8 per five years Mr. Jani says “I see Prime Bank as a very strong Chege comments. Mr. Chege noted that banking industry is experiencing cent as at 31st December 2017. Our average loan size is KSh brand in the financial sector. We are geared towards moving The banking environment has been further tightened threats that could hurt it more, “Regulation such as interest 9.7million with an average loan repayment period of 4 years. to the next level which will propel the growth of the bank into following the introduction of IFRS 9 implementation beginning rate cap and unhealthy competition where banks are regulated 30 per cent of the loan book is lent out to wholesale and retail more countries in the African continent as we digitalize our January 2018. Mr. Chege says, “The first impact of IFRS 9 is on whereas other financial services providers are serious threats. trade, 22 per cent to manufacturing, 15 per cent to real estate, operations.” the capital ratio. Our capital is still high the impact may not be Lack of regulation may see pyramids scheme slowly formed 15 per cent to business services, 13 per cent to others.” He felt immediately, going forward, the level of provisioning will making customers lose trust with geniune financial services be slightly higher than it has been in the past but it depends on providers.” 118 BANKING SURVEY | 2018 BANKING SURVEY | 2018 119 CEO INTERVIEWS CEO INTERVIEWS I&M BANK: COUNTING ON KCB : Leveraging on the future CUSTOMER-CENTRIC ‘IMARA STRATEGY’ of the Fintech and SMEs I&M Bank is a dominant player in the Kenyan market that has been consistently growing, and is evidently innovative in terms of the type and range of products and services it offers. CDC Group plc, a development The Bank bagged a few accolades last year, winning 2017 Bank of the year particularly finance institution wholly owned by the government of the United Kingdom owns approximately 10.68 per recognized for ‘pursuing sustainable growth and for its efforts at championing financial cent of I&M Holdings, the holding company of I&M Bank Ltd. In addition, it has technical support agreement inclusion’ by the Financial Times. The lender was also named the Best Bank in East Africa in the with International Finance Corporation for staff training, product development and risk management. It also African Banker Awards 2017 in India in 2017. — Mr. Joshua Oigara, Group CEO, KCB. enjoys medium term foreign currency credit facilities from European Development Financial Institutions – Proparco, IFC, DEG and FMO. — Mr. Kihara Maina, Managing Director, I&M Bank In 1896 KCB, Eastern Africa’s oldest and largest into the digital space. commercial bank started its operations in Zanzibar as “First we advocate for the repeal of the entire rate The year 2017 was quite a difficult year for most sectors platforms versatile as they need to be in today’s context a branch of National Bank of India. The bank extended cap, but this doesn’t mean banks go back to the old of the economy across the board. The Banking sector was of capturing multiple facets of the customer. its operation to Nairobi in 1904, which had become regime. There’s need for consumer protection guidelines not left behind, with it being a full year since the interest “We have invested on two fronts really, the first the headquarters of the expanding railway line to in the financial sector so that the customers don’t feel rate capping and the prolonged electioneering period is the technology that enables you to make faster Uganda. In 1970 The Government of Kenya acquired exploited, so there has to be an element of responsible leading to a slow down. decisions, bringing down costs, we are in the process majority shareholding and changed the name to Kenya lending by Banks although this has never been “We saw it as an year of opportunity, we spent our of (re)platforming our business by installing a new Commercial Bank. Today the Bank is registered under the demonstrated by banks in the last 50 years,” says Mr. time rolling our IMARA strategy, we have invested core banking system, coming along with that is the KCB Group Plc and is the largest bank Kenya by assets. Oigara. heavily in a lot of things, we also closed our transaction enhancements we lay on top that to make it easier for “Last year we made it to the top 17 banks in the He however adds that if there is no mechanism in in the acquisition of Giro Commercial Bank and we used customers to actually access their bank. More user continent, it is important to have the eye of an African place by the banks to address the concerns of consumers, the rest of the year to integrate the staff coming in from friendly and intuitive interfaces. Accompanying that Transnational Bank which is looking at building an then there is no certainty that the rate cap will be Giro into I&M as well as ensuring we having a seamless will be a change in mindset of the work force and enable ecosystem within the region we operate. Our model is repealed by parliamentarians. transfer of our clients joining us.” says Mr. Kihara Maina, them to think digitally as well.” he says. to build the network of our customer foot print within “There has to be political conversation happening Managing Director, I&M Bank. Mr. Maina adds that corporate governance is key and the East and central Africa where we have got more than between parliament, national treasury and the banks, we Mr. Maina brims with optimism as he speaks upheld to higher standards at I&M. 400 million people which is equivalent to the US/Central must must give alternatives. However we will be ready about the bank’s IMARA 2017-2021 strategy that will “Integrity is at the core at what we do her at I&M, Europe. We are not going to for example open in Nigeria, to give alternatives as an industry as long as we operate work towards deepening the regional presence while we insist on professionalism we make sure it pervades that is not our strategy. Our growth model will not be in a free market.” He adds. entrenching themselves in their home markets and the entire organization, right from the board all based on building branches or opening Earlier this year the lender had up new business, or focus will be announced plans to invest Ksh 1.5 intensifying their operations in the institutional and through to out tellers. The one thing we will certainly “There has to be political corporate banking space. not condone is anyone trying to besmirch our name acquisitions/mergers in areas we have billion to it mobile banking platform. “We have sought to make this a lot and we want to make sure there’s no no presence then scale up our growth conversation happening This was set to be built by Huawei more customer centric. That meant “Integrity is at the core at room for questioning the integrity I&M potential.” Says Joshua Oigara, CEO, between parliament, Technologies to replace the current KCB we had to create segments within has when it comes to conducting its KCB Group. MPESA platform and enable seamless our business so that we could create what we do her at I&M, we affairs. If you look at the partners we In the last decade the element of national treasury and banks payments across all ecosystems such customer value propositions that insist on professionalism have in our shareholders structure, we certainty and predictability has been must give alternatives. as KPLC, hotels e.t.c. The second phase speak to the needs of clients. It has we make sure it pervades have the British government through hard to come by for companies due However we will be ready will enable customers open accounts, also meant that we have invested in the CDC; prior to them we had the to the disruption caused by Fintechs, make savings and withdrawals and the new approaches technology wise, the entire organization, German government and the French new regulations, young generation to give alternatives as an third phase will bundle all services on thinking of how we use data about our right from the board all government as well. We learnt early in dynamics change. KCB is is focusing industry as long as we a smart device which is basically like on being more customer centric. having a bank in your hands. customers to help them make better through to out tellers. our engagement with these partners operate in a free market.” choices about their banking. A lot what kind of corporate governance “Last year was stable; we did not “Our app and mobile banking of this work is still ongoing and we standards they want to see within see much growth, our loans were up platform is carrying 60 per cent of our expect it delivers for us greater depth the organization. This has helped us 10 per cent closing Ksh 500 billion. transactions, today we are not at the in the customer segments and the greater reach we are since we have been able to attract customers who feel On KCB MPESA mobile lending platform we closed Ksh level that we are satisfied as KCB. The platform will scale looking for in our chosen markets.” emphasizes Mr. strongly about an organization that holds integrity and 300 billion with more than 10 million customers. Our up our transactions to 20-30 million per day. We will Maina. corporate governance dearly. I don’t expect anyone to margins came down by over 60 basis points but they include the customer in the journey as we create the new He is however hopeful that IMARA strategy have question marks about I&M‘s integrity and good were compensated by the volumes. We extended more solutions. We have set up an innovation lab that will conceptualized last year will continue to bear fruit in governance,” confidently says Mr. Maina. loans into the consumer space and some sectors of the walk the journey with the customer.” 2018 with expectations stemming from better and strong Mr. Maina says the IFRS 9 is a welcome move and the economy but our mortgage lending, SME and micro He says the IFRS 9 model is very complex for the sales efforts from his teams, “ we expect to see greater bank has put in place mechanisms to comply with the enterprises showed negative growth on y/y basis,” he banks. Banks will be required to have a model for each focus on non-funded income from transactions systems accounting regulations. He goes on to say that; adds. customer segment. KCB has been building this model and approaches we are putting in place will start yielding “As we continue to recover from 2017 upheavals, Mr. Oigara is adamant on the removal of interest since 2010 and has already complied with the accounting the results that we are expecting to finally grow our loan initially NPL’s will continue to rise but, you will see rate caps with the personal opinion and belief that the standard. book as the economy starts to recover.” banks set aside greater capital to absorb possible losses. interest rate does not solve the challenges faced in the “Our capital adequacy ratio will drop by 100-150 basis He feels the banking industry in the country has We can appreciate is the need for strongly capitalized banking industry. On the other hand he agrees banks points, but because we have an internal buffer of 250 not come of age in terms of adoption and investment banks that will give everybody in the industry the have had to change their business models finding new points then we are well within our own expectations. in technology. This not implying the banks have not comfort that our banks are well run and capitalized.” He opportunities in mobile lending, creating algorithms for We had set aside capital of Ksh 10 billion under statutory embraced technology but they have not made their concludes. credit scoring for the customers and pushing payments loan reserves. 120 BANKING SURVEY | 2018 BANKING SURVEY | 2018 121 Mayfair Approved 4.pdf 4 30/06/2018 11:52 CEO INTERVIEWS Mr. Oigara is excited about the growth of the banking to lend to our customers, our portion of that market will sector driven by loan growth of up to 10-15 per cent from start shrinking. We want to be part of this business that 2018-2020. The downside of this growth he says will be will disrupt our traditional businesses.’ the no of regulations, interest rate caps, capital adequacy The Bank has aligned itself to the government’s Big issue and enhanced supervision coming in from the CBK 4 transformation agenda namely, housing, security, that might hinder growth of the sector. He goes on to say affordable health-care and manufacturing. KCB has a that the Fintechs will slowly get into the financial space market share of about 30 per cent in the mortgage sector. in coming years. “We looking closely to design a project for 20,000 “The future of banking will be on the payment space, houses, we are looking at double digit growth in our if we are not playing in this space we will be limited to earnings and net income in the next 4 years” he traditional services of lending, and as new intelligent concludes. lenders with algorithms and machine learning come in MaYFAIR Bank: the new entrant The Bank was licensed to commence operations in June 2017 and became operational in August 2017; the Bank aspires to create deep and sustainable customer banking relationships, through new and innovative business models, higher levels of operational efficiency and consistently delightful standards in customer experience. — Mr. R. B. Singh. C Mayfair Bank Limited, is a private commercial bank After just 5 months of operation after getting its M within the Tier 3 segment of the Kenyan banking license from CBK, the Bank’s financials remain on Y industry that aspires to become a truly omnichannel a firm footing, with a record KShs 2billion worth of digital bank focusing principally on the Corporate customer deposits as at 31-12-2017, the depressed CM target market as its niche. economy and prolonged electioneering of 2017 MY Fully locally owned, and with Mayfair Insurance notwithstanding. Ltd being a key shareholder, the Bank takes particular As at June 30th, 2018, total customer deposits had CY pride on being the first case of vertical integration grown to KShs 3.1 Billion, while the advances portfolio CMY from insurance to banking in Kenya. stood at KShs 1.3 Billion and liquidity levels at 80%, The Bank is at an advanced stage of introducing pointing to the immense potential that the new bank K a variety of digital offerings as part of its online holds. and digital banking solutions, as it seeks steady “In 2018 and beyond we are optimistic because of growth of its virtual corporate and the direction the economy is taking. geographical footprint. As part of There are a lot of activities planned. its ambitious growth targets, it will “In 2018 and beyond we We are looking at supporting the be expanding its current 3-branch are optimistic because government’s Big Four Agenda.” Mr network in Nairobi and Mombasa Singh reveals. with an additional 2 branches by end of the direction the He further notes: of 2018. economy is taking. There ‘Mayfair Bank’s journey this far is a ‘We continuously think ahead of are a lot of activities testament to the continued confidence the curve and transform traditional and encouragement from the Bank’s ways of conducting banking business planned. We are looking shareholders and the Board, the trust into viable and pleasurable digital at supporting the and loyalty of its customers and our experiences, thus entrenching government’s Big Four business partners, and the commitment and transforming into reality our and professionalism of its employees aspiration of evolving into a true Agenda.” exhibited so far since inception, and for relationship bank,’ said R.B. Singh, which I would like to thank them. With the MD/ CEO of Mayfair Bank Ltd. stronger partnerships and our continued “We are relationship-based and pay great attention support, I am sure that not only positions our Bank to how our customers are handled. Excellence in as a bigger, better and stronger bank that delivers customer service is at the heart of our business enormous value to its stakeholders but also grows into strategy, and all our operations revolve around that. a recognized and trusted brand. We are totally focused in providing professional On leadership he notes that it is about loving the banking services to our customers. We believe in people you work with, holding their hands and moving competitive rates at all times, a key element of our together as a unit that makes all the difference. customer-centric focus.” he added, noting that the He stated that loyalty, dedication, honesty and bank had strong shareholder support and experienced integrity matter of the team are the key to success of bankers running the show. any institution. 122 BANKING SURVEY | 2018 BANKING SURVEY | 2018 123 CEO INTERVIEWS CEO INTERVIEWS CONSOLIDATED BANK still Plans to Untold story: Equity Bank’s bring in a strategic investor Impact on the economy Equity was built on an emotional bond with the customers. It was the human interface that built the bank. It gave banking a human face and a soul as they democratized the bank. With the technological innovation Equity has moved all transaction services on devices and Dr. James Mwangi, CEO Equity Consolidated Bank was incorporated in 1989 in an effort to stabilize the financial sector through Bank says that they have realized it is no longer emotional bonding that counts, but the performance of the acquisition of 9 insolvent institutions and thereafter restructuring them into a viable and the devices. — Dr. James Mwangi, Group CEO, Equity Group professionally run commercial bank. — Mr. Thomas Kipkemei CEO Consolidated Bank From where Dr. Mwangi sits, he has an aerial view of the and where it was low and we could afford to lend at 14 per banking sector, an industry to which he has devoted 28 years cent. The outcome as we had predicted in strategy was that we Consolidated Bank is fully owned by the Government performing loans rose from 1.48 billion in 2016 to 17.2 of his life. Equity’s business model is unique and beats all improved the NPL position while the industry’s deteriorated. with the majority shareholding in the bank (78%) held billion in 2017 due to the difficult operating environment odds, its strategy too and execution has enabled it tower the We also created a better risk adjusted return on public debt by The National Treasury. The remaining shareholding is in the course of the year. banking sector in Kenya. higher than risk adjusted return of private sector lending. spread over 25 parastatals and other quasi government “The level of non-performing loans generally Dr. James has learnt a unique thing that some in the These two strategic intents held all the way and that is what organizations. increased in 2017; not just for the Bank but for the entire sector have failed to note, that the greatest strength of resulted in the bank being more profitable, having a very agile The bank commenced the year on the back of growing Banking Industry. The level of NPL rose to 25% from 20% any organisation is the human capital. He explains that and liquid balance sheet. I could say we mitigated the risk liquidity and capital challenges that have undermined its in 2016 while the Industry standard rose to about 13% they fortified the human capital because it is strategy and but at the same time positioned the balance sheet to be very growth for the last two years. from 8%.” execution that will determine who’s the winners. responsive in case something like removal of interest capping “This situation was further compounded by a difficult “Being an SME Bank the loan book is spread across “If you look at the strategy we adopted from 2015, there were to take place.” He explains. operating environment manifested in the slowdown various sectors with an average loan size of about Kshs. were three areas that we focused on, the first one was on To generate high value yields or quality of streams of in economic activity – it is estimated that real GDP 7 million while the average repayment period is slightly delivery mechanism; we felt that time had ran out for brick income the bank focused on non-funded income. “We growth declined to an estimated 5 per cent in the year, over 3 years. In terms of sector distributions, our biggest and mortal, we had to virtualize the bank and digitize the bank increased non-funded income contribution from 35 per cent to due to subdued credit growth caused by caps on interest exposure is to Trade & Commerce (44%) followed by and more importantly use third party channels. We felt we 42 per cent and more importantly the stream of public lending rates, drought, and the prolonged political impasse Mortgages (17%), Transport & Communication (11%), needed bridges to digitize cash. So far we have 35,000 agents had no risk in terms of default.” He further explains that over the presidential election period. The extended Personal/Household (10%), Building & Construction that have effectively formed a bridge.” He says. digitization has helped reduce costs. When they compound, electioneering during the second half of the year (9%), Manufacturing (2%), Agriculture (1%) and Tourism, “The second aspect we looked at digitization required a there is decline in terms of cost of operations despite rapidly completely slowed down business activity and affected Restaurants & Hotels (1%).” He adds. channel that we had control of and that could be secure and expanding in Uganda and DRC. The total cost of the group existing customers’ ability to service their facilities “We are adjusting the business model appropriately to essentially Equitel came very handy to be declined by 2 per cent. In 2018, they expect resulting in higher levels of ensure it is aligned to emerging economic the means of digitization so that strategy “We increased non-funded the cost income ratio of the group to come non-performing loans and and regulatory situations. A key driver “The level of non-performing changed our infrastructure. Basically, we down to 42 per cent. provisions for bad debts. The of business rejigging right now is IFRS 9. income contribution from decided to really focus on removing all The bank reduced risk by improving year also saw the full impact loans generally increased in The Bank has reviewed its risk appetite banking transaction from the branches and 35 per cent to 42 per cent quality of asset book. “I am really happy of the interest rates capping appropriately to ensure it takes on board 2017; not just for the Bank but convert branches into SME service centers that focus on quality of asset portfolio implemented from September risks commensurate with its capacity and and more importantly the for the entire Banking Industry. and focus on intermediation and wealth bore significant fruits reducing cost of 2016 which bore heavily on appetite. The Bank has also strengthened creation.” He adds. stream of public lending risk on credit from 2.4 per cent to 1.6 per the sector.” emphasizes The level of NPL rose to 25% its underwriting processes and risk The most notable strategy employed had no risk in terms of cent. That is very significant change. We Mr. Thomas Kipkemei CEO monitoring processes to achieve its from 20% in 2016 while the was the way that the decision would be became the only bank that has improved Consolidated Bank. objectives” says Mr Kipkemei. default.” Industry standard rose to made on who to lend to. He explains that its NPL for the year ended 2017 and the He says the Bank expects Introduction of capping interest rates they decided to create algorithm that could only large bank to register positive growth 2018 to be a much better one about 13% from 8%.” in 2016 has affected the Banking Industry help in validating database based decisions. Essentially, 92 per in profitability.” He happily notes. judging from the evident negatively generally because banks are cent of the credit decisions are now made by algorithms that Dr. Mwangi, has a huge responsibility of plotting Equity’s resurgence of economic activity unable to price risk. Banks have been validate the decisions with data and data is available. They future and noting potential dangers from a distance. “There after the general elections. “Indeed, the economy is forced to be innovative to increase their revenues. have removed the human biases that clouded the decisions are a couple of things that keep me awake and pretty projected to rebound this year to grow at 5.6% and “The effect has been more pronounced for the SME that were made. He happily notes that the quality of credit challenging both physically and mentally. The first is risk accelerate to 6.2% in 2019. It is anticipated that the sector where banks are shying away from lending to has improved significantly. “Digital lending has an NPL of 2 management. We recognize that the risk profile of the group Government will review or scrap the interest rate more risky customers due to inability to price the risk per cent compared to 6 per cent where human intervention has changed significantly. Once we digitized cash, it meant capping law to allow banks to price loans appropriately associated with that type of clientele. The law reduced is made. Machine learning has become very significant.”He that the two meter concrete walls that protected our volts and in accordance with the level of risk they are taking. bank interest margins by up to 30% and hence reduced says. have zero value now. We need to create firewalls against This will definitely spur loan growth in the sector.” He the total interest income. The uptake of loans for the To survive the unpredicted interest rating cap era, Dr. our platforms and that is a new area. The worst thing is the adds. banks has also reduced predominantly because banks Mwangi explains that they resorted to remain in the lending evolution and innovation at the cybercrime level is faster than The Tier IV bank recorded a marginal drop of total are shying away from riskier assets. Demand for credit business but only lend to sectors where interest capping the way the defense mechanisms or innovative tools to defend income to Ksh 2.12 billion in 2017 from 2.42 billion in increased yet Commercial Banks with liquidity headroom took the risk of lending. “Essentially, we ended up shifting are being developed.” He reveals. 2016. Total interest income dropped as well from Ksh tended to prefer parking such liquidity in less risky our portfolio to public sector. We increased our holding of Technology risk comes second. “Technology seems to 1.67 billion in 2016 to 1.34 billion in 2017. assets like Government Papers.” admits Mr. Kipkemei”. government stock from Ksh 35 billion to Ksh 150 billion. At the be changing much faster than ever before in the history Non-performing loans ratio among Kenyan lenders “The Bank is optimistic to overcome its capital end of the year it was at Ksh 128 billion. We also shifted the of mankind. How quick could you be deploying technology rose to a 10-year high in the third quarter of 2017 as challenges in 2018 by bringing on board a Strategic private sector lending from Micro and Small and Consumer to and at what rate do you replace the same technology? We commercial banks struggled with loan defaults in a Investor to take up majority shareholding in 2018. Large and Medium Enterprises where risk would be accessed are realizing that while it took us 12 years to depreciate the tough economic environment. Consolidated bank total 124 BANKING SURVEY | 2018 BANKING SURVEY | 2018 125 CEO INTERVIEWS CEO INTERVIEWS investment in brick and mortal branches, it is now taking us effect Equity has on the economy is surely large. three years; initially it was 8 years and later 5 years. We are Equity’s contribution to the education and financial literacy now depreciating our technology every 3 years. The disruption cannot go unnoticed. “We have 15000 wings to fly scholars in innovation technology is that much faster.” fully paid for and 7,000 scholars in Equity leadership program. PARAMOUNT BANK: growING The question of how to attract, retain and keep human Between these two programs, we have 13,000 scholars in capital motivated is the third hard nut to crack. “We have public universities, 443 students who have benefited from identified that the most pricy assets is human capital. We airlift that leads them to scholarships.” He notes. “We have FOOTPRINT AND mobile BANKING need to attract different skills from the traditional banker 1.6 million people who have been taken through financial skills. We are now looking for data scientists to constitute the literacy and entrepreneur program to engage in the economic To further strenthen its base, acquire market share and take advantage of economies of scale executive management of the bank. We are looking at building activities. It is bigger when you see 600,000 small peasant Paramount Bank underwent a merger in 2000 with Universal Bank resulting in Paramount technology teams. The question is do they speak to the brand farmers being converted to agribusinesses and the fact that 76 of the bank. Everything in the bank is challenged. Technology per cent of all our lending is SMEs, we see industrialization of Universal Bank eventually changing its name to the current one. — Mr. Ayaz Merali, MD, again becomes our greatest risk.” He further reveals. the country happening through local capital. It is now Kenyans Paramount Bank The unique position of being a market leader is admired by in the front line of industrializing the country. Eventually, the many players; it comes with its own challenges though. “The support of local entrepreneurs the wealth being created in the success of our strategy has propelled us to be a market leader country, is being used in the country. For the first time, we can and exposed us and visibility has increased dramatically. The associate the rapid and sustainable growth of our GDP to the question is how many people would replicate our strategy funding of local entrepreneurs by Equity Bank.” and how quickly would they replicate the strategy? We are There are strategic changes in Equity Group Management Paramount Bank was established in 1993 as a non- institutions, my observation of the results of many heavily driven by organization culture. Organization culture is that have set in, specifically in the CEO’s office, Dr. Mwangi banking financial institution known as Combined banks is that the ones that has a wide margin between being tampered by the performance of devices. Who is likely explains, “We recognizing the structure of Equity has grown, Finance Ltd, with a share capital of Kshs 25 million, what they were lending and they were paying on to be our next disruptor? When we map the list, we see fin the focus has been on getting best brains we could get on offering general deposits and personal lending products. deposits showed depressed results, the ones that were techs being a greatest disruptor. This defines my next job of board. The question is how do you provide leadership?” In 1995, it commenced banking business as a fully- competitive enough had equal gain and loss.” admits Mr. development of a fin tech that can disrupt us such that it is “The CEO’s office has been strengthened significantly fledged commercial bank offering a complete range of Merali. friendly fire that is disrupting us.” He adds. to have an Executive Director, Mary Wamae. The board has banking services including foreign exchange, current “I think it will be repealed in some manner, it came Dr. Mwangi explains Equity Contribution to the economy granted that position to the long service Director of Strategy accounts and corporate finance products. The share in as a blanket rate, and you cannot compare every which is undoubtedly enormous. The bank has a balance sheet and Company Secretary to really focus on deepening the capital was then enhanced and it changed its name to borrower with the same yard stick. Having a standard of Ksh 550 billion this is 27 per cent of the national budget and contribution of the subsidiaries. The Director of Strategy Brent Paramount Bank Limited. model is not possible, I think there will be different 8.7 per cent of Kenya’s GDP. It has 7,800 high value employees Malahay has been extended to cover strategic partnerships To further strengthen its base, acquire market products for different banks in relevance to the services/ all concentrated in one organization. These employees are part relationships, investors’ relation and business model share and take advantage of better economies of scale, products you require and convenience for them as well.” of the highest earning per cent of Kenyans. evolution. This becomes a focal point because we are in a very Paramount Bank Limited underwent a merger in the year adds Mr. Merali. The institution commands a market share of 14 per cent dynamic environment; you need a dedicated director who 2000 thus resulting in Paramount Bank Limited. The With the notion that the banking sector is flooded has 12.1 million bank accounts opened by individual Kenyans just looks at value creation by the business model and sticks bank went live on the SWIFT network in March, 2003, by players offering the same products and services, one who are facilitated to achieve their aspirations by the bank. of measuring. This will ensure that all strategies are not just thus providing her customers with secure and efficient would say there is room for consolidation to better work Equity directly and indirectly has created 689,000 jobs. This is formulated but by the end of the year there is measurement worldwide money transfer services. together. Mr. Merali however thinks there is no need for equal to jobs created by Kenyan government in terms of civil that is been done and deep stick. The fourth pillar in the Like for many other banks, 2017 was a difficult year for consolidation of smaller upcoming banks with the bigger service. “When you look at the capability of that Ecosystem, in CEO’s office is human capital development. We realize the Paramount Bank, with the electioneering period slowing players, he says the more the diversity the more stable terms of employment it is definitely huge.” He notes. most important asset is the human capital. We have decided down economic growth and full effect of the interest the market is. “ the ones that are non competitive or Equity is one of the top five largest tax payers in the country to move leadership development from HR to the CEO’s office capping in 2016 felt during the period. For Paramount charge too much will be driven out by they will have no as an institution, When you bring this ecosystem, 20, 000 so that we do not grow faster than we are developing leaders, it was an year of consolidation, and trying to maintain business at all.” enterprises, 7800 employees, the tax contribution is great. this responsibility is a acquiring, retaining and developing what they had. Mr. Merali is confident that IFRS 9 will have no effect More importantly is the engagement that Equity Bank leadership and creating a leadership and entrepreneurial “The bank performed steadily, the for Paramount Bank, “our loans are has with the informal sector. “Given that 76 per cent of all spirit. There is group directorate that provides support to bottom-line stayed the same with net “I think it will be repealed in collateralized and asset backed. For interest income going up. The loan the banking industry it will be a big our business is in the small and medium enterprises. The all subsidiaries and also shared services platform that will some manner, it came in as a implication it has in terms of economic transactions and be executed by Bhartesh. While each subsidiary has its book did not grow, however the base turnaround especially if lending economic activities to the country is big. Lastly is if you managing director, their responsibility is purely to execute for our deposit expense improved blanket rate, and you cannot is not securitized. We re already remove the wallet mobile based bank account, Equity would and customize the group strategy to the environment they increasing out net interest income. compare every borrower with compliant, we have had extensive be holding 56 per cent of all bank accounts in Kenya. Equity are operating and managing the human capital and the Lending stayed stable because it was training on how this would impact has 48 per cent of all custodial accounts in the country.” He interaction with customers. ” Dr. James reveals. difficult to take up risky borrowers. the same yard stick. Having a the Bank. We came up with a explains. “The picture becomes even bigger when you look “My role will be to coordinate the CEO’s office ensuring As for government securities we did standard model is not possible, standard on how to do probability on at Equity Insurance agents maybe when you disaggregate that it is well coordinated by holding the group executive not invest much making, we did not I think there will be different the risk and further base that on the the individuals in the group policy that we sell, we sell more authority and then thinking using the insights that I have change our model that much.” says accounts.” policies more than the 56 insurance companies put together.” build over my 28 years career in Equity bank, seeing whether Mr. Ayaz Merali, MD, Paramount Bank products for different banks Paramount Bank has invested on He reveals. this insights can be turned into great knowledge and wisdom Mr. Merali is very optimistic in relevance to the services/ cyber security which is a progressive about 2018, now that the political challenge and imperative to the “Of the total national public debt, Equity as a single to try and project the future path of Equity and particularly products you require and institution with Ksh 130 billion of public debt, we are the trying to shape the fin tech space for the group while temperatures have gone down. “Now sector. Fraud and anti money biggest holder and funder of the Kenyan government.” maintaining oversight of our motherboard Kenya because we are down to business, the prospect convenience for them as well.” laundering detection mechanisms He adds. “We play a significant role in the economy and essentially Kenya contributes 75 per cent of our total assets look good for next year, the new hitch have already been automated. The particularly getting the SME sector to create opportunities in and may be 85 percent of our profits and maintain oversight is the new accounting standard that Bank is on course in innovating the economy. With Equitel, hopefully we will take 36 per cent as Bhartesh creates the shared platform in what we call the will be a bit challenging for some players in the sector. mobile platforms with ongoing plans to offer mobile of all money transferred in the country and 42 per cent of all corporate office, the shared platform is human capital.” He Our clients are high net worth individuals and SME’s who lending. mobile payments in the country. In Diaspora banking, this adds. came in as smaller businesses that we have seen grow. Mr. Merali says in 5 years time Paramount Bank’s year, Equity will process more than 50 per cent of all Diaspora “The bank is becoming a sales organization and this is now We dedicate our time to our clients, nurture them and balance sheet will double and it will be propelled by remittances coming to the country.” He further adds. the new strategy. After 28 years of being in the trenches, Mary take them to the next level.” steady growth and a better business environment in the Equity has given a single loan of Ksh 11 billion to KPLC for has taken over the trenches and I can sit on the hill and see The interest rate capping in 2016 coerced many banks next few years. “We want to increase our foot hold both the Last Mile program, rural electrification. Today, Equity the potential risks on our journey.” He happily concludes. to re think their organizational focus, with priority physically and using mobile technology to get a better is the largest single non-government shareholder of Kenya shifting to survival mode till when the turbulent storm diversified client base, we want to be twice the size by Airways, 9 percent of the total shareholding. The multiplier quells. then.” he concludes. “The interest rate cap meant different for various 126 BANKING SURVEY | 2018 BANKING SURVEY | 2018 127 CEO INTERVIEWS CEO INTERVIEWS BOA is now Focusing on Returns CITI BANK: focused ON GROWTH rather than market share SECTORS and the BIG 4 AGENDA Bank of Africa is a subsidiary of Morocco’s BMCE Bank. BCME holds 75 per cent of the group. BMCE is the second largest bank in Morocco with total asset of US$ 20 billion and over 650 branches in Citibank N.A. Kenya has been operating in Kenya since 1974 and has two branches in Morocco. It also has about 14 per cent market share in Morocco both in banking and bancassurance. Nairobi and Mombasa, serving Corporate and Institutional clients. Citibank Kenya is the BMCE is owned by Finansco Group and CIC a French bank. BMCE owns Bank of Africa Group (BOA). regional hub for the Citi East Africa cluster, which covers Kenya, Uganda, Tanzania and BOA Group has a shareholding of 80 per cent in BOA Kenya Limited. BOA Group has subsidiaries in 17 Zambia. It’s the only solely corporate bank in Kenya. countries in Africa including; Benin, Madagascar, Côte d’Ivoire, DRC and Djibouti. — Mr. Ronald Marambii, Managing Director, Bank of Africa Kenya Ltd — Joyce Ann Wainaina Managing Director Citi Bank Kenya By Njeri Murigi This has been increasing because we have been doing integration through technology with public institutions. The bank offers a range of banking services to strata of the economy that was by no means affected by BOA Kenya has been in Kenya since 2004. It has presence We have integrated our systems with customs, KRA, companies, including commercial finance, inter-bank the rate cap. in all East African countries and a representative office NHIF and Nairobi City County, customers can transact transactions, investment services, deposits, cash “As for Citi the fact that we have blue chip high in Ethiopia. “This means we are ready to enter the with these institutions through BOA. The next big thing management and electronic banking. We assist our quality corporate clients who are on the supply side of Ethiopian market as soon as it opens up to foreign banks. is to integrate with schools on school fees payments.” customers with managing their finances to increase the the economy, our rate were already very low, because We have 30 branches in Kenya, 32 in Uganda we have and He explains. value of their investments and finance their projects. Citi our rate affects what happens downstream, therefore we 25 in Tanzania. We are quite spread in these markets.” In the technology space they are working on a project Kenya also provides global transaction services, treasury do not have space to offer high rates on the supply side Notes Mr. Ronald Marambii, Managing Director, Bank of that started last year of centralized data centers. “BOA and corporate finance services. of the economy. We have remained very flat in terms Africa Kenya Ltd. will have two data centers, one in Casablanca and the Last year was a challenging year for most sectors not of our rates to our clients before and after interest rate “2017 was a very challenging year for the whole other in Kenya. These will be linking seven countries leaving out the banking sector, having had two back to capping.” says Mrs. Wanaina. industry because, we had just implemented the interest where our subsidiaries are located.” He reveals. The back presidential elections, full impact of the drought She is however emphantinc on the need to avoid rate cap which was signed into law in September 2016, whole idea is to make the business across the continent and a New Year post the interest rate cap in 2017. price controls of any kind like interest rate capping. at the same time, private sector credit growth was very seamless, such that if you are a client of one subsidiary, However with Citi Bank recorded impressive results There is a need for lending; if you fix prices then you low at 4 per cent and had signs of growing lower. ALSO, you can make transaction with any subsidiary without for the year, with total operating income going up from squeeze access. This has created an uneven playing field 2017 was an election year, usually, election years slow inconvenience. This will be immediate transfers. They Ksh 8.98Bn in 2016 to Ksh 9.51 Bn in 2017, a 23.08 per where one sector like the micro finance institutions and down the economy. The presidential election of US expect to complete this project by end of this year. cent rise in after-tax profit while net profit rose to technology firms are providing credit under different had just finalized with Trump coming in. There were They also plan to have a treasury platform where Ksh2.86 Bn from Ksh2.20 Bn. rules. Mrs. Wainaina is optimistic that the rate cap will many uncertainties coming from that and also IFRS 9 again they will be able to do international business “Citi had a very good year; our performance in 2017 be repealed. the new accounting reporting standards meant to be seamlessly. “Right now we are doing parallel trial runs was outstanding despite the headwinds and unfavorable “The impact of IFRS 9 on our bank is going to be implemented in January 2018.” He elaborates. in Kenya. Uganda did theirs three months earlier. This is environment. We were able to grow our balance sheet; negligible, we tested the new model of IFRS 9 on our Mr. Marambii reveals that they resorted to shrinking being rolled out in all the subsidiaries of BOA. Whatever corporate loans went up by 30 per cent upwards. We had loan portfolio, and the entire impact was about 0.2 per their balance sheet and reduce expensive deposits the technology, it must have a wider scope because it is to be very careful with margins, before interest rate caps cent. The capital adequacy statutory minimum required because there was nothing much they could do with looked at a continental level not a country.” He notes. our rate was well below 12 per cent and post interest rate by Central Bank is 14.5 per cent; Citi’s is at 25.6 per cent them. “Our balance sheet shrunk but there was more To remain relevant in the retail sector, they are cap our rates remained the same. However what aided in so we still have a buffer of about 10 per cent. We are also efficiency. We saved a lot on interest expense, and we focusing on mobile banking apps. “As we speak, we our good performance was the volume, client experience very well capitalized and internally we have been using were also able to reduce our risky assets.” He says. are already in the development stage. This the will be and engagement, foreign exchange volumes rather the U.S gap model which looks at actual losses rather They went ahead to close bank branches that were not launched within the next few months.” He asserts. than foreign exchange margins.” emphasizes Joyce Ann than expected losses.” Says Mrs.Wainaina. contributing positively to the bank. But still were able “Currently we do not have any agents; it is an area Wainaina, Managing Director Citi Bank Kenya The bank has invested a lot in technology which is to serve our clients through technology.” They reduced we are looking at to see whether we will focus on it. She says the bank had a strategy session across East a necessary spending in excess of US$1Bn in a year on staff by offering voluntary early retirement packages. 45 Our bank focuses on medium, large businesses and Africa with CEO’s and business heads, some clients and technology. More than 98 per cent of transactions are staff volunteered for early retirement. The staff numbers international trade finance in the region but the mobile technology and innovation companies. The plan is to initiated by the clients. The Bank has 2 deployed robotics currently range between 421 and 425. banking is quite rich. The only thing missing is mobile keep on focusing on the growth sectors of the economy aliases Bob and Amina that do the checks such as anti Mr. Marambii is among the few banking heads who lending, the other features are on the mobile banking which has lead to the year on year growth that has money laundering (AML), manage size of the volume, perceive the positive side of interest rate cap. He notes platform.” He adds. been witnessed for the last 4 years as well as The Big 4 risks and parameters at higher execution speeds. that, “capping has helped banks become more cautious BOA is among the few banks that are prepared for agenda introduced by President Uhuru Kenyatta which “For all global banks it is necessary because you in their lending. Now we cannot price for risk with IFRS 9 compliance. “This is partly because we are part focuses on value addition in Manufacturing, Universal need to continue the disruption within yourselves to margins as big as before. You will see a lot of discipline. of a bigger group of banks. We believe we are resilient Healthcare, Affordable Housing and Food Security. stay ahead of the curve. This is deliberate, because it’s Banks are not ready to do unsecured loans. This is an enough to handle any shocks that could come from IFRS “We are already aligned to the country’s growth the bank’s service strategy. For us technology is a risk effect of the interest rate cap and IFRS 9.” 9. We will follow the regulations of CBK in how they want strategy; a closer look at our corporate balance sheet management tool, service and baking tool. It is the only There will be a wider framework in which to manage it spread out especially on capital plans because currently today will show that 50 per cent goes to manufacturing way you can ensure consistency of service delivery. With consumer credit. The capping was dealing with consumer there is a draft paper that is yet to be finalized. We are and agribusiness. We bank with almost all global technology comes with its fair share of challenges we credit because the person with little bargaining power in eight European countries; these laws are applicable in pharmaceutical companies, 20 per cent of our balance have to ensure the best and most secure systems that can is the consumer market not the corporate market. those countries also.” He affirms sheet goes to the supply side of the housing like the be offered in this environment.” Corporates were getting prime rates even before the Moving forward, BOA is concentrating in expansion, cement and cable companies. What we are not doing is Mrs. Wanaina believes that the growth of the economy capping. Being a Pan-African Bank, BOA prides itself in they have a market share of less than 2 per cent. They changing our strategy from corporate and investment will drive growth in the banking sector. Government strong connections that other commercial banks do not are looking at return on Equity. The group is aiming at banking and we are not going to provide consumer/retail execution of its strategy of vision of 2030 and big 4 have. The bank plans to ride on its connectivity. “BOA is ROE of 10 to 15 per cent. “We are currently on 13 per cent. business, however what we have done over the past agenda will have a very direct bearing on how the quite strong on the foreign exchange side. We have one We are pushing ourselves to reach 15 per cent and later few years is finance the supply chain for our corporate banking industry performs. The improvement of working of the most vibrant and competent treasury departments on move it to 20 per cent by end of 5 years period. We clients.” Says Mrs.Wainaina capital financing driven by changes in the retail sector, because we are a Pan African Bank; we are able to are concentrating on particular niches of business and Interest rate capping did not at all affect business better weather conditions and quite a bit of time before manage currencies much easier through synergies with making sure we meet the changing needs of our client.” operations at Citi bank as the lender does not play in the the next elections on the economy will be phenomenal. our subsidiaries. This has resulted in revenue growth. He affirms. consumer and retail space. The bank was already in the 128 BANKING SURVEY | 2018 BANKING SURVEY | 2018 129 CEO INTERVIEWS CEO INTERVIEWS size bank, striving to enhance stakeholders’ value with Any new investments or advancements in ICT? care, concern and competence. BANK OF BARODA: “WE PERCIEVE During the year, the Bank introduced, VISA Debit Card, SMS alert and it is free until 31/12/2018, Mpass What do you see as the biggest threats to East Africa’s book banking sector? CHALLENGES AS OPPORTUNITIES” • Lack of uniform Central Banks Prudential Guidelines. Does your bank have a mobile money lending platform? • Corruption. What is the loan uptake from the platform and the • Terrorism activities. While many Banks may have face multifaceted challenges, remained sound, in terms of liquidity overall quality of the loans taken? • Poor network infrastructure. and steady performance. Thanks to our strong Bank policies and our sound banking system which It is in progress and is expected to be launched soon What are the next growth drivers in Kenya’s banking we foster to sustain. We not only remain focused and look ahead, but learned to perceive our Is your bank connected to Pesa link and how many sector and why do you think so? challenges and threats as potential opportunities. — Mr. Saravanakumar A. transactions go through Pesa link as compared to • Industrialization RTGS and other funds transfer methods? • proposed Affordable housing It is in progress and is expected to be launched soon • Improved infrastructure as all this will lead to increased income and demand for credit Has there been an increased usage of your online • Recent developments within the last one year BANK OF BARODA: The year 2017, describe what it Overall, how do you rate the quality of your loan banking platform? • Begun construction of the Bank`s Head Office along meant for you and the bank? portfolio? Yes. Muthithi Road and same is expected to be ready for We may say that, the year was a litmus test since it was The ratio of Gross NPA as a percentage of total advances occupation by February 2019. challenging in terms of economic and political pressures. improved to 6.07per cent as at December 31, 2017 The relative instability of the macroeconomic Despite these, the Bank was able to increase total business compared to a ratio of 8.91 per cent as at December 2016 environment is worrying many players in the economy. and profit. From our analysis we ranked amongst the top while the Ratio of Net NPAs to Gross Advances was 2.26 Share Capital (Kshs `000) 989,717 How is the volatile exchange rates and high interest Bank`s n terms of profitability growth. Profit before Tax per cent in the year down from 4.47 per cent of 2016. rates regime affecting you? No. of Branches 13 was Ksh 5.05 Billion (increase by 30.15 per cent) for the Gross NPAs were Ksh 2.66 Billion as at December 31, 2017 We are cautiously increasing business / new relationships period ended December 31, 2017 compared to Ksh 3.88 compared to Ksh 3.32 Billion of year 2016. This indicates No of Agents (if any) Non but with controlled aggression with a view to have long Billion of 2016. the Bank`s continued efforts to continuously improve the No. of Employees 207 term sustainable and balanced business mix. quality of assets. No. of ATMs Non Where did growth come from in 2017 if any? What is your growth plan, where do you see your selves Interest income increased by 8.95 per cent to reach Ou did your loan book perform? No of Active Accounts 42,326 in 5 years? Ksh 10.45 Billion for the year ended December 31, We grew our advances by Ksh 5.85 billion during the No of Dormant Account s 4,836 We envisage to have reached Ksh 250 billion in terms of 2017compared to Ksh 9.59 billion of year 2016. Included period ended December 31, 2017 to close at Ksh 43.94 Business Volume and increase our profits substantially. No of Current Accounts 20,629 in the interest income was Ksh 5.26 Billion relating to billion compared to Ksh 38.09 billion as at December 31, Provide State of Art technology platform to Customers interest earned on government securities. It is as a result 2016 translating to a growth of 15.36 per cent. No of Savings Accounts 9,699 and Staff and its continuous periodic up gradation. We of prudent and timely decisions that, we have been able No of Mortgage Accounts 172 also vision to be the most respected and preferred mid to increase Interest income from treasury investments How will the new accounting reporting standard (IFRS which accounts for 50.5% of the total interest income for 9) affect your bank and the industry? the period ended December 31, 2017. We have already assessed the impact of IFRS 9 for the The total interest paid on deposits marginally increased year ended December 31, 2017 and noted that there was to Ksh 4.59 Billion for the period ended December 31, 2017 no impact on specific provisions but there was impact on compared to Ksh 4.53 Billion for period ended December general provisions. However, the provisioning marginally 31, 2016. Subsequently, this increased our Net Interest affected our total capital as a bank. income. This indicates the positive result of the Bank`s KWFT REMAINS FAITHFUL TO ITS agenda efforts to bring down the cost of deposits by going for With the introduction of the Interest rate capping law more low cost deposits accounts. in September 2016, how has your Financial Performance KWFT Microfinance significant number of the population durations and most of their target During the year we sold one of the Bank`s property been affected so far? Has there been an increase in loan Bank’s purpose is to help is still unbanked,” observes Mr. customers seek their services for located along Tom Mboya Street at a profit of Ksh 325 uptake? women at the bottom Mwangi Githaiga, Managing Director, consumption purposes. Similarly, million and this boosted other non interest income. While the aim of the law was to make credit more of the pyramid. Since KWFT (pictured). microfinance banks serve the low Additionally, we were been able to put under control accessible and help businesses expand by adopting more it began three decades Mr. Githaiga has over 20 years income and micro borrowers, as the operating expenses and this has boosted the bottom line. capital intensive models of production, Banks reacted by ago, it has been on a of experience, among his notable banking fraternity has its own client limiting lending and investing more of their deposits in growth path. The bank accomplishments was guiding base.” He says. The year 2018, what does it mean for you and the bank? ‘risk-free’ government papers that are currently fetching has remained faithful to the institution’s successful Mobile money proliferation has The Bank will continuously look for available a decent yield. its purpose which is to transform their transformation to a deposit taking aided in advancing financial literacy opportunities to tap business to ensure a sound and During the year ended December 31, 2017, the Bank customers socially and economically. microfinance. especially in rural Kenya and the healthy business portfolio. To achieve this, we intend to managed to increase advances despite the interest rate From a humble beginning of two The local financial sector has been microfinance industry believes there increase promotional / awareness activities relating to capping and challenging business environment. offices in Kilifi and Karatina, KWFT attracting diversity and embracing is immense opportunity in the micro recently introduced services and products. As a part of the has spread and has over 245 offices innovation, with the latest entrants lending sector. Bank’s efforts to enhance alternative delivery channels Any recent management changes in the past year? spread out across 45 counties. In 2008 being financial technology service Mr. Githaiga affirms that the specific to different customer segments, the Bank will Our Bank is a subsidiary of Bank of Baroda (India) and the the microfinance bank became a providers. Mr. Githaiga argues shareholders have provided consider partnering with other stakeholders in setting up position of the CEO /Managing Director is rotated after subsidiary of Kenya Women Holdings that the existing service providers, significantly leeway for product an innovative Banking module. a period of -3- years. We therefore have a new CEO Mr. Company and two years later received have mastered functionality to innovation and investment in The bank will continue on same path of credit recovery Saravanakumar A. who succeeded Mr. Yatish Tewari. the license from the regulator their respective demographics and social impact products that would efforts in addition to ensuring that all Non-Performing allowing the deposit taking function. the coexistence between different de-incentivize one whose sole motive advances are adequately provided for. The bank will How long have key management been holding their “To date we remain keen on financial services providers is more is profit. continue in its efforts to give back to the society current positions? continuously attracting micro clients complementary than competitive. The lender has received both local through efforts towards transforming lives of citizens. The locals have been holding their positions since into the KWFT fray because, despite “For instance, the local fin techs and international recognition, as the Contributions in the areas of environmental, social and appointments but some of the expatriates have been increase in number of financial typically disburse small amounts, best microfinance within its space. economic promotions would be our endeavor this year. repatriated back to India after expiry of their terms. services providers over the years, a at higher interests for very short Basically, no labor turnover of key management team. 130 BANKING SURVEY | 2018 BANKING SURVEY | 2018 131 CEO INTERVIEWS CEO INTERVIEWS Understanding your target Faulu Microfinance Bank grows market is Paramount its profitability by 73 per cent With a share capital of Ksh 480 million, 64 outlets; 43 banking branches and 21 marketing offices, 371,914 active accounts, 340,848 current accounts and 22 mortgage accounts, In a span of ten years, U & I Microfinance Bank has made significant steps which comprise of Faulu Microfinance Bank is technically bigger than several Tier III & IV banks in Kenya. growing their profits after tax 7 times from Ksh 1.4 million to Ksh 7 million, growing their loan — Mr. Apollo Njoroge, Managing Director Faulu Microfinance Bank book by having their average loan size grow to Ksh 736,744 with an average repayment period of 3 years and getting a foreign exchange and national wide license. — Simon Ngigi, CEO U & I Microfinance Bank. The Central Bank of Kenya (CBK) has recommended that that provisions now be made for performing loans under the capital ratios of the micro-finance banks to be raised to a expected credit loss model. The new standard has created a yet-to-be-established threshold. Currently, the CBK requires push towards secured lending which may further escalate them to have a core capital of Sh60 million which Faulu Bank problem of access to finance for customers who are considered “We got a foreign exchange and national wide license. retain a certain percentage. If we can disburse Ksh 350 surpasses by far. to be at the bottom of the pyramid hence viewed as more risky. We can open branches at any place in the country. million and we retain 10 per cent of that, the deposit Just like it was for other banking industry players, 2017 Interest rate cap has indirectly affected Microfinance Banks We have also enhanced our mobile banking platform will have increased. We struggle to maintain customers. was quite difficult for Faulu Bank. “2017 was characterized by because their interest rates are high than the interest rates in terms of customer base. We are trying to put more Customers come and borrow from us when they are a myriad of challenges ranging from political activities that by commercial banks. “Some of our customers moved to products on this platform. The customers are able to small but when they want to do big deposits, they go to caused significant decline in business operations, market commercial banks because of their low rates which slightly deposit, withdraw using their mobile phones. We are the mainstream banks.” Mr. Ngigi further explains. disruptions that saw liquidity become a challenge as well as affected our income.” explains Mr. Njoroge. Mr. Njoroge notes looking forward to enabling customers borrow and even “Our growth strategy is opening branches at unfavorable climate caused by prolonged drought in some that there has been a decrease in loan uptake in the MFI. Faulu open account on their phones and only come to come Muthurwa, Thika and Nakuru this year. We have parts of the country leading to subdued growth in economic bank disbursed an average Ksh 0.8 billion per month in year to the bank to activate.” notes Simon Ngigi, CEO U & I customers in these places but we do not have physical sectors that are hinged on agriculture. Levels of NPLs increased 2017 compared to a target of Ksh 1.2 billion; demand for loans Microfinance Bank. branches. We continue to look for areas with more significantly due to many businesses being unable to meet was suppressed due to tough business environment that made Similar to most businesses in Kenya, the protracted potential and by end of 2018 we will have six branches. their bank loan repayment obligations. This significantly it difficult for customers to borrow. electioneering period made the bank record significant We want to offer more products that are in line with impeded growth.” reveals Mr. Apollo Njoroge, Managing To enhance corporate governance, the Faulu Bank board decrease in income. The bank recorded a decrease of technology.The staff members are currently undergoing Director Faulu Microfinance Bank. comprises of individuals with strong academic backgrounds Ksh 12 million in disbursement. The bank activities had training on foreign exchange and the board looks forward With the heated political period and drought being a thing of and technical expertise encompassing, finance, audit, risk, slowed down because payments were not flowing as to have the appropriate infrastructure to enable the bank the past, Faulu Bank aims to rise to historical heights in 2018, law, corporate governance and management amongst others. expected and still had to meet their budget. tap forex opportunities” he further explains. Mr. Njoroge notes, “The projected economic growth presents The CBK has proposed a review of the shareholding limits “The customers did not want to apply to get more On the technology front, the bank is enhancing mobile numerous business opportunities and creation of non-operating holding funds. They too like other investors banking. Initially they had pay that the bank has aligned itself to “Our recent development companies and entrenchment of the vetting had, a wait and see attitude. The bank “Our growth strategy bill user services but had not been take advantage of. We look forward in technology is upgrade of of significant shareholders into the Act. also recorded an increase in non- connected to customers’ accounts. to leverage on our strengths in terms This will boost corporate governance in the performing loans, because most of the is opening branches at “The customer would pay through of existing strong band, wide network our core banking system Microfinance industry. clients businesses were destroyed in Muthurwa, Thika and Nakuru ‘pay bill’ then we move the money coverage across the country with a total which has cost us of Ksh 830 “Our recent development in technology the election period and the insurance manually which was very risky. This 66 marketing offices which includes 43 is upgrade of our core banking system which firms had not compensated them.” this year. We have customers has been improved by automating the banking branches, alternative channels million to a new version with has cost us of Ksh 830 million to a new adds Mr.Ngigi in these places but we do not process; they are real time in terms of delivery and increased efficiency in superior capabilities from version with superior capabilities from the However, U & I managed to grow have physical branches. We the alerts that are sent to customers meeting our customer’s expectation the perspective of lending perspective of lending (ability to do retail their interest income by 44 per cent after carrying out a transaction. The through the efficient system.” banking) as well as enhanced savings & from Ksh 53 million to Ksh 76 million. continue to look for areas bank has a bulk SMS through which Mr. Njoroge discloses that they are (ability to do retail banking) transactional features.” notes Mr. Njoroge. They also managed to open a branch with more potential and by customers are notified when money working towards growing their loan as well as enhanced savings Recent developments within the last one at Gikomba in January 2017. end of 2018 we will have six is credited in their accounts. The book by 38 per cent to Ksh 24 billion & transactional features.” year are upgrade of T24 system to T24 RT 16. Gikomba is a strategic location for customer also gets notified on charges in 2018, which currently stands at Ksh And launch of VISA enabled ATMS and U & I microfinance bank. They target branches.” before they transact. Craft Silicon 17.3billion, grow deposit book by 29 seen the growth of VISA usage both at POS importers who bring in containers full is helping the bank come up with a per cent to Ksh 22.8 billion it currently stands at Ksh 17billion and ATM of goods like second hand clothes and product to centralize technologies.” and consequently bottom line which exited the year at Ksh 170 Faulu Bank’s mobile money lending platform, Faulu Chap electronics. They have a product dubbed ‘Faster Faster’ says Mr. Ngigi million. Chap loan, allows Group clients with a loan security fund to for these traders. The bank is able to mobilize Ksh9 Mr. Ngigi says they have a sturdy corporate Faulu Bank balance stood at Ksh 26 billion, with profitability borrow up to Ksh 10,000 payable within 10 days. Interest is million in deposits a day in that branch. governance. The board meets on a monthly basis growing by 73 per cent to stand Ksh 170million from Ksh 98 recovered upfront. The loan uptake on this platform currently In the balance sheet the bank has grown its loan to enhance monitoring of the business; the various million in 2016. Like some of the Tier 1 banks such as Equity stands at Ksh 961,661. The Portfolio at risk is 67% (644,900) portfolio by 16 per cent to Ksh 407 million. They have committees in the board meet quarterly and report to the and Stanbic banks, Faulu experienced growth in their non- meaning the performance book has deteriorated over time. also increased share capital by 32 per cent from Ksh board on progress of various tasks. interest revenue as well. Bancassurance which picked up, Faulu’s mobile banking platform has 211,000 active 104 million to Ksh 138 million. They repriced interest “We follow set guidelines on borrowing and we are recording the highest number of last expense policies ever sold customers. The micro finance bank is eyeing is connecting to on deposits to 4 per cent for them to attract more strict on insider loans. They have to be approved by the in the bank. Pesa link by end of Quarter 2 2018. Mr. Njoroge also reveals customers. “We netted new customers despite others board and reported to the Central Bank of Kenya before Mr. Njoroge discloses that on average Faulu Bank’s loan that they are in the process setting up an advanced online going away.” he reveals 14 days are over. All insider loans are discussed at the size is Ksh. 0.5 million, the bank’s portfolio stands at Ksh 17.3 banking platform. “Our main challenge as a microfinance bank is that, board level. Other than two shareholders, Access and billion and is spread to cover retail sector –Ksh 10.5billion, SME Mr. Njoroge says that Faulu’s strategy remains that of customers borrow in microfinance banks then put the Trade wave that have a stake of 15 percent each, all other –Ksh 4.3billion and Group/micro loans Ksh 1.9 billion. becoming bank of choice for all Micro Small and Medium money in the mainstream banks, they do not want to shareholders have a stake less than 10 percent. The new accounting standard will have an impact on Enterprises (MSMEs). They plan to transform into a tier two shareholder funds in Faulu Bank because IFRS 9 requires bank with a long term goal of becoming a tier one bank. 132 BANKING SURVEY | 2018 BANKING SURVEY | 2018 133 CEO INTERVIEWS CEO INTERVIEWS CRAFT SILICON: revolutionizing KBa Head otimistic that interest the Banking system rate cap law will be repealed Advocacy for the banks is the key mandate for Kenya Bankers Association (KBA). For Kenya Bankers Association policy articulation is backed up with research. Their other mandate is to steer efficiency in the banking sector. — Dr. Habil Olaka, CEO, KBA Craft Silicon is creating revolutionary FinTech innovations that are driving tremendous advances across the financial services ecosystem. The status quo is being reshaped in a complex and highly regulated industry as the FinTech innovator delivers more tailored, efficient, faster, convenient and affordable solutions while creating profitable new segments. — Kamal Budhabatti, CEO, Craft Silicon Innovation in the banking space is one role that with legislative proposal.” He states. The law is not the association is tasked with. PesaLink, a product solving the problem of the high cost of credit. It was developed by Integrated Payment Services Limited, a aimed at bringing down the cost but has instead reduced subsidiary of KBA is one of their great achievements. availability of credit. Entities that have been rationed out It is an innovation in the payment space that Dr. Habil of the market are the ones with higher risk; individuals, Olaka, CEO, KBA says will be most preferred by banks SMEs and the retail sector. By Nelius Kanyingi as a status symbol for the bank and very differentiated and customers in the next five years; it will be a game “We also have the crowding out effect; treasury bills products are now being offered. changer in the payment space. and treasury bonds have been fairly attractive, given the With more than 150 banks from across the continent “Financial institutions have started to focus on how KBA also launched a sustainable finance initiative risk adjusted return on t-bills and t-bonds to banks. The on its channel platform, processing over US$5.5 much return on investment they are making by investing to ensure banks have at their core sustainability from first step would be to repeal the law then address the billion in 2017, Craft Silicon provides customized on a core banking system? They look at their needs and an environmental, social and economic perspective. issue of the cost of fund in the market, if it comes down, software solutions for the financial sector in Kenya and re-evaluate what is important. Our core banking system This is geared at seeing ways in which people can raise then the cost of credit can come down. If the t-bills rates internationally. It offers core financial solutions, such as is exceptional because we understand how the Kenyan appropriate funding to support sustainable finance. were to be brought down, it would address the crowding BRmfs, bankers realm (BR) core microfinance solution banking system operates.” He adds. From where he sits, Dr. Habil has both a panoramic out effect. Banks would demand less from consumers.” that helps to manage small to large customer records, In February the government revealed its plans to and aerial view of the banking sector, an industry he He explains volumes of transactions, portfolios, and profits, as leverage on emerging block chain technology. The has been in for 13 years now. Few in the sector have The Credit Information Sharing program (CIS) enables well as analyzes the risk factors; BR integrated banking Ministry of ICT set up an 11 member taskforce headed had the privilege of having an banks to price risk based on available solution, which automates banking processes and by former Information Permanent Secretary Dr. overview of the sector. He compares information. With this banks will not provides customer services Bitange Ndemo to explore the use of distributed ledger The Credit Information the industry’s growth phases and perceive all people to have the same “We are all about providing products that get you technology and artificial intelligence for development in Sharing program (CIS) enables undoubtedly, Dr. Habil reckons risk. The ideal value of CIS is that the in tune with your finances; we are a B2B company Kenya. significant changes have taken banks to price risk based on good borrowers can use their track that provides software to institutions enabling easier Mr. Kamal reveals that Craft Silicon is already working place. record to bargain for a favourable access to financial services for customers.” says Kamal on two products that will use blockchain technology, available information. With “He concurs that 2017 was a interest rate on a loan. Budhabatti, CEO, Craft Silicon. for lending and storing lending documents by the end this banks will not perceive all difficult year for the banking sector. The Annual Percentage Rate Mr. Kamal admits that the company sits at unique and of the last quarter of 2018. He is confident that banks in There was drought that affected food people to have the same risk. framework (APR) has enhanced interesting position in regards to the country will be willing to take up the supply, prolonged electioneering transparency. It is a measure where capping of interest rate for banks technology in the future. The ideal value of CIS is that “Market knowledge of crypto process; the impact of the interest all other cost that go into the credit is in 2016. He adds that the banks “Market knowledge of crypto capping law was strongly felt,”says the good borrowers can use shown rather than only the interest have since shifted focus from currencies is lacking and currencies is lacking and the currencies Dr. Olaka. their track record to bargain rate. Dr. Olaka notes that all banks interest income to transactional the currencies are based are based on blockchain technologies Just like most players in the are coming on board to use the revenues increasing growth making it very secure. As Craft silicon, for a favourable interest rate on blockchain technologies banking sector, he sees a ray of hope, framework. This aims at transferring “Craft Silicon has products we are trying to come up with something “We look at 2018 with optimism. on a loan. power to the consumer who can for both the interest income making it very secure. As Craft for crypto currencies which will be in The rains this year are encouraging, check the rates from their phones and transactional revenues use, before the end of this year.” silicon, we are trying to come food supply has gotten adequate, and discuss with the bank they select. departments, when the interest Mr. Kamal goes ahead to encourage elections are now behind us and the government is in “There is need to promote transparency in the banking rates came down there has seen up with something for crypto banks and other financial institutions place with its big four agenda and we hope something sector, so that a consumer can choose an appropriate some of growth of transactional currencies which will in use, to invest in technology and artificial will be done about the interest rate cap law soon.” bank to take a loan from.” He adds. revenues.” says Mr.Kamal intelligence to be able to make better before the end of this year.” Dr. Olaka. is quick to point out one fact; that the Currently, credit is being accessed outside the banking He goes on to say that Banks decisions using AI engines which economy has not yet shot up yet and the pickup is not system and informal lenders are the ones punishing have become more innovative will predict customers behavior and guaranteed. He notes that the unpredictable policy borrowers, the lack of discipline is being perpetrated by especially after the capping of innovation products around that. environment, the legislative aspect of it where a law the informal lenders. interest rates and introduction of accounting regulations “Craft Silicon will continue to focus on the channels can spring up from nowhere and before assessing the The implementation of IFRS 9 compounds the IFRS 9. “They are getting creative in terms of increasing which are realizing more growth as noticed. We have implication it is already a law is a factor to worry about. existing problem of the interest rate law cap. In IFRS revenues while reducing costs, and of course technology been carrying out our business in Africa and Asia, but “Once a law is enacted it is a whole process for it to be 9 you anticipate the expected default and you provide is playing a very key role in this. He adds. in the next five years, we want to venture into the reversed. Some of the laws come in place and affect every for it immediately. The riskier market attracts more Mr. Kamal says their core banking system has been Latin America markets and East European markets” he sector.” He explains. provisioning. This is the sector that is expected to be revolutionized banking over a period of time not like in concludes. the past where financial institutions used core banking He is among the many players who are optimistic more affected. Banks would prefer to go for individuals that there will be a repeal of the interest rate law cap. who are least likely to default. “There are two aspects, possibly the treasury may come Dr. Olaka notes that under IFRS 9, there are 134 BANKING SURVEY | 2018 BANKING SURVEY | 2018 135 CEO INTERVIEWS areas that are not clear, such as whether banks are bringing players to understand the long term impact. expected to make provision for t-bills and t-bonds The bank charges Ksh 300 for EFT and Ksh 500 RTGS. since governments are not known to default domestic With PesaLink, you can transfer Ksh 1,000,000 at a borrowing since they can print the money and borrow. fraction of the cost, in the range of Ksh 10. Banks have On the other hand governments have been known to given their departments different targets to meet in EFT default on foreign debts and have actually defaulted. and RTGS transaction. PesaLink needs to be driven from “The likelihood of default is low but not zero, what per the top, volumes generated from it can be able to sustain cent should we do the provision?” He asks. it despite it bringing low income. We wanted to bring Expected loss and incurred loss will differ. “Through transaction cost down so that even consumers get low modelling the loss you anticipate from the loan is what cost for transaction and feel the impact of cost coming you are required to book, in the event you overbooked, down.” He notes. you release the provisions but you will have booked At KBA, there are three categories of membership; provisions when the loan is disbursed. It can deviate ordinary, associate members and honorary member, positively or negatively.” He adds. where CBK is the only member. The amount of bank The present portrayal of banks not having thought contribution depends on membership. through their business models easily blindside the Incidents of fraud have been on the rise with the efforts banks have put to see to it that they are cost advancement in technology. Banks are leveraging more efficient and have been deliberate at promoting financial on technology to drive efficiency and make processes inclusion. The man who has been there to oversee it all more secure. Through automation it is easier for fraud for the last seven years and eight months maintains a to happen. Cyber criminality is on the rise and the level clarity of though as he explains the transformational of detection has been enhanced. A number of banks journey. including the regulator are ensuing that risk mitigants He points out that in regard to cost efficiency; banks are enforced to ensure that banks have robust banking have been doing it even before the introduction of the systems. interest rate cap law. “The country has made great “There is framework of information sharing because progress in terms of financial inclusion. Some years fraudsters use similar approaches. Ensure you have back, only 25 per cent was included, in 2016, only 23 the right people, at the vetting process, put the right per cent were excluded. This was contributed to by measures. Banks are working on that so that they have mobile and agency banking. Banks were able to access the right people who also will not have the incentives customers in the remote areas through agency banking to commit the same. If you mistreat somebody, they even though the services are limited. In mobile banking, can result to committing fraud to punish you. Detection banks are leveraging on mobile networks. This change of mechanism is a notch higher, information is available on CUSTOMER SATISFACTION SURVEY INDEX 2018 model was in the minds of banks, the law just accelerated typologies being used to commit fraud, how many have relooking at the mobile.” He elaborates been stopped and how many have gone through.” Dr. Tracking mobile and agency banking, it is 5 years since Habil points out. Prepared by Infotrak Research it was introduced but some have not even started. “A lot The collapse of Imperial Bank in October 2015, Dubai more needs to be done but agency banking is growing. Bank in August 2015 and later Chase Bank in April 2016 This growth is being driven by few players who have because of poor corporate governance made Kenyans networks across the country. Led by those banks that are loose trust in the lenders. CBK governor has been ahead, other banks have picked up doing mostly mobile focusing on transparency and governance and fair play banking.” He notes. since 2016, this is the new normal framework. “The Banking M-PESA popularized the idea of transacting via bottom line is that we realized as an industry that action mobile. Customers ask whether you can transfer money of individual entities affects the whole banking sector. between the bank account and M-PESA or Airtel. There Profiling of banks started “small banks are not good.” Survey is room for mobile and agency banking. There is another “Asians banks are not safe”. We learnt our lesson and 2018 concept on giving a customer is given many channels focused on keeping each other accountable. We came up through which they can reach the banks; internet, with KBA charter to enable self regulation in the banking branch, ATM, mobile, agency. Fin techs are bridging sector.” He further states. what banks are offering and what customers appreciate The head honcho of KBA views the Central Bank of and find convenient. Kenya (CBK) governance to be proactive. When the “You will see partnerships between banks and fin CBK governor, Dr. Njoroge came into office in July techs and banks forming fin techs to provide seamless 2016, before the end of that year, he identified bank service to the customer.” He predicts supervision department needed a lot of work. “He went Being in the banking industry for financial services right in there and did significant changes from the industry for about 20 years, he reckons how M-Pesa leadership department because he knew its significance. was viewed on introduction. “Banks viewed M-pesa as This change began to be felt. The effect of these changes a competitor initially who is not regulated as the banks was to put some of the banks under receivership. They are. M-pesa was not playing a banking role but enabling have their grip well in terms of supervision of banks. people transfer money from one point to another. It is a This is the key role of CBK.” He states. He adds that in payment system not a banking system. Banks went into regard to monetary policy, they have handled this pretty partnership with Mpesa. They have a symbiotic kind of well. There is a level of confidence that they will steer relationships. Fin techs re likely to go through the same the industry to greater heights. kind of process. They may end up leveraging on each.” He further predicts. Being in at the core of introduction of PesaLink, he has a clear report on the product. “It is an issue of 136 BANKING SURVEY | 2018 BANKING SURVEY | 2018 137 CUSTOMER SATISFACTION SURVEY INDEX 2018 CUSTOMER SATISFACTION SURVEY INDEX 2018 The Best Performer: DTB Kenya emerged the top overall in other than their main banks majority of the respondents The Customer Satisfaction Index for the Banking Customer Satisfaction Index 2018 with an index indicated that they viewed Co-operative Banking as their top of 88.5% shifting one place up from position 2 in 2017. alternative bank. the Banking Industry (BankTrak) The Top league Most Improved: GT Bank Kenya jumped from position 18 with an Index of 57.9% in 2017 to position No. Bank Percentage Introduction: computation of the overall CSI, it will undoubtedly provide 10 with an Index of 75.4% while Sidian Bank jumped from In today’s fast paced world, gauging stakeholder perception all banks that participated in the Survey with valuable and position 18 in 2017 with an Index of 62.4% to position 8 1. Equity Bank 37.5% is not only necessary for ensuring satisfaction and fascinating insights into the levels of their employees’ morale with an Index of 77%. 2. KCB 28.5% commitment, it is also imperative for tracking identifying and enthusiasm. 3. Barclays Bank 11.9% key success factors. This was calculated by asking the respondents how happy The Top League Retainers: DTB Kenya The dynamism and competitive nature of the financial they think the staff who serve them at their main banks are The Top League Drop Outs: The only participating banks Table 3: Top 3 Alternative Banks Used by Respondents services sector dictates that unless stakeholders are kept generally. that dropped from the Top 10 was Habib A.G. Zurich. Most Prestigious Bank happy and loyal by their service providers, they will move The New Top League Members: The banks that made an Prestige is often described as reputation or influence elsewhere. The Methodology: entry into the Top 10 were I&M Bank, Prime Bank, Sidian arising from success, achievement, rank, or other favourable The BankTrak Index employs a purely quantitative approach Bank, Bank of Africa and GT Bank Kenya. attributes. It is more often than not driven by pride and The BankTrak Index has been designed to: with a semi – structured questionnaire using a Likert Scale aspiration. • Assess level of satisfaction with both functional and of 1 - 5. RANK When all the respondents were asked to name the most emotional aspects of key customer performance areas The data was collected through Face to Face Computer 2017 RANK prestigious bank overall, the bank most mentioned was within the financial services sector; Assisted Personal Interviews (CAPI) within the banking 2018 BANK BANKTRAK BANKTRAK Barclays Bank. • Determine overall customer loyalty of the various banks halls of the 20 banks that have made up the 2018 Index. 5 INDEX INDEX No. Bank Percentage using the Net Promoter Score (NPS); Microfinance Banks participated in the Survey this year. 2018 1. Barclays Bank 28.4% • Design an industry wide Customer Satisfaction Index Prior to the fieldwork, communication was sent to all the 2017 +/- (CSI) that facilitates benchmarking and highlights best concerned banks informing them of the pending survey and 2. Standard Chartered Bank 12.8% GROWTH practice. requesting their cooperation in allowing the Infotrak team to 3. KCB 6.4% access their banking halls. 2017/8 Happiness Score: The survey was conducted within a three week window 2 1 DTB Kenya 88.5% 80.4% 10.1% Table 4: Top 3 Most Prestigious Banks According to Customer Satisfaction is to a large extent determined by how where customers of the respective banks in different areas of - 2 I&M Bank 86.5% - - Respondents happy a service provider’s staff members are more so those Nairobi were randomly selected and requested to participate 7 3 NIC Bank 85.4% 73.1% 16.8% Most Affordable Bank who are customer - facing. It is to that end that Infotrak in the survey. Only those customers who indicated that 6 4 Equity Bank 85.3% 75.0% 13.7% The difference in bank charges between various service Research & Consulting chose to measure this most critical the bank in question was their main bank qualified to 1 5 Stanbic Bank 84.2% 83.1% 1.3% providers many times determines whether a customer measurement in the BankTrak Survey this year. participate in the survey. 4 6 Barclays Bank 82.0% 75.9% 8.0% will stick with one bank or move to another. When the Although the score has not contributed to the - 7 Prime Bank 80.9% - - respondents were asked to name the most affordable bank 18 8 Sidian Bank 77.0% 62.4% 23.4% overall, the bank most mentioned was Equity Bank. The BankTrak Sample 11 9 Bank of Africa 76.6% 68.3% 12.2% A total of n = 1070 banking customers were interviewed No. Aspect Weighting Factor Percentage 23 10 GT Bank Kenya 75.4% 57.9% 30.2% No. Bank Percentage 1 Customer Loyalty 0.2 20 1. Equity Bank 52.4% between mid - March and the beginning of April. 2 Trust & Corporate Image 0.16 16 Table 1: BankTrak 2018 Top League Tier Sample (n) Top Bank by KPI 2. KCB 7.4% 3 Technology 0.15 15 1 360 3. Barclays 3.3% 4 First Point of Interaction 0.12 12 KPI BANK 2 200 with the Bank Customer Loyalty DTB Kenya 3 240 Table 5: Top 3 Most Affordable Banks According to 5 Bank Personnel 0.10 10 Trust & Corporate Image DTB Kenya 4 120 Respondents 6 Service Delivery 0.10 10 Technology DTB Kenya MFB 150 7 Product & Services 0.09 9 First Point of Interaction with the Bank I&M Bank Most Stable Bank TOTAL 1070 8 Access 0.08 8 Personnel I&M Bank Stability is most easily described as the strength to stand or Total 1 100 Service Delivery I&M Bank endure. When the respondents were asked to name the most The BankTrak Index Product & Services DTB Kenya stable bank, the bank most frequently mentioned was KCB. In developing the Overall Customer Satisfaction Index (CSI), Key BankTrak Findings Access Equity Bank No. Bank Percentage the perceived level of importance of different aspects was 1. Top 10 Banks Overall (Top League) determined based on the level of importance attributed 2. Top Bank by KPI Table 2: Top Bank by KPI 1. KCB 32.6% by bank customers’ interaction with their Main Bank. 3. Banks Used by Respondents other than their Main Banks The BankTrak Index continues to demonstrate that each 2. Barclays Bank 14.5% This resulted into assigning weights to different aspects. 4. Most Prestigious Bank bank has inherent strengths that when leveraged contribute 3. Equity Bank 12.4% Thus the eight Key Performance Indicators were assigned 5. Most Affordable Bank 6. Most Stable Bank to their competence and excellence in different KPIs. weighting factors summing up to 100% to assess the CSI. To 7. Most Innovative Bank Notably, DTB Kenya was the best in Customer Loyalty, Trust & Table 6: Top 3 Most Stable Banks According to obtain the Overall CSI, the overall score of each Bank was 8. Favourite Bank Adverts/Jingles Corporate Image, Technology as well as Products & Services. Respondents then multiplied by the weight assigned to its Tier. This is as 9. Awareness vs Usage of Mobile Loan Services I&M Bank was best in First Point of Interaction, Personnel, as Most Innovative Bank shown in the table below: 10. MFB Customer Satisfaction Index well as Service Delivery, while Equity Bank topped the Access Innovation is defined as the act or process of introducing 11. Overall Banking Industry Customer Satisfaction Index category. new ideas, devices or methods. It also described as the Top 10 Banks Overall (Top League) Banks Used By Respondents Other Than Their Main Banks process of translating an idea or invention into a good or There were interesting shifts in the Top League. When asked what other banks they had accounts with 138 BANKING SURVEY | 2018 BANKING SURVEY | 2018 139 CUSTOMER SATISFACTION SURVEY INDEX 2018 service that creates value or for which customers will pay. highest awareness and usage levels. For an idea to be called an innovation it must be replicable Overall Banking Industry Customer Satisfaction Index 2018 at a cost that is economic and specific or identified need. When asked which bank they thought was the most No. Bank Overall CSI innovative most respondents indicated that it was KCB. 1 DTB Kenya 88.5% No. Bank Percentage 2 I&M Bank 86.5% 1. KCB 25.3% 3 NIC Bank 85.4% 2. Equity Bank 23.5% 4 Equity Bank 85.3% 3. Barclays Bank 10.2% 5 Stanbic Bank 84.2% 6 Barclays Bank 82.0% Table 7: Top 3 Most Innovative Banks According to 7 Prime Bank 80.9% Respondents 8 Sidian Bank 77.0% Favourite Bank Adverts/Jingles 9 Bank of Africa 76.6% No. Adverts/Jingles Percentage 10 GT Bank Kenya 75.4% 1. Bankika/Pepea Account/KCB Mtaani/KCB 47.5% 11 HFC Bank 75.3% Tujiajiri/Lions’ Den (KCB) 12 Guardian Bank 74.8% 2. Equitel/Mimi ni Member/Karibu Member/ 17.4% 13 ABC Bank 73.5% Jijenge (Equity) 14 Paramount Universal Bank 71.8% 3. Agency banking /We are you/Co-op kwa 4.0% 15 Habib A.G. Zurich 70.1% jirani (Co-op) 16 Gulf African Bank 69.3% Table 8: Favourite Bank Adverts/Jingles According to 17 UBA Kenya 69.0% Respondents 18 Bank of Baroda 68.7% 19 Credit Bank 65.6% Awareness vs Usage of Mobile Loan Services 20 Consolidated Bank 63.2% AVERAGE 76.2% RANKINGS AND RATINGS Table 9: Overall Banking Industry Customer Satisfaction Index 2018 MFB Customer Satisfaction Index 2018 No. BANK CSI 1 U&I Microfinance Bank 71.8% Banking 2 Rafiki Microfinance Bank 71.0% 3 SMEP Microfinance Bank 68.6% Survey 4 Faulu Microfinance Bank 67.5% 2018 5 Kenya Women Microfinance Bank 65.7% Of the Mobile Loan Services available in this highly AVERAGE 68.9% competitive space, M – Shwari, and KCB M-PESA enjoy the Table 10: MFB Customer Satisfaction Index 2018 140 BANKING SURVEY | 2018 BANKING SURVEY | 2018 141 RANKINGS AND RATINGS RANKINGS AND RATINGS capital and that all insider loans do not exceed 100 per cent of Bank Perfomance Rankings the core capital in aggregate. The lower the ratio is advisable. These bank rankings are compiled from the financial statements issued by the banks at the end of the year as required by OVERALL PEER RANKING TOTALS RANKING Total Assets INSTITUTION % ge the Central Bank of Kenya. Banks are assessed based on selected key parameters in the following measures a) Asset Quality Tier I >150 B 2017 2016 2017 2016 Change b) Capital Adequacy c) Profitability d) Liquidity and e) Efficient use of assets. It is from their individual performance in 2017 2,016 INSTITUTION 2017 2016 the ten key parameters that we have always used for the banking survey that form the financial rankings in their respective 1 1 Kenya Commercial Bank 555,630 504,775 10.07% 1 1 Equity Bank 90 110 Tiers and overall performance. 2 2 Equity Bank 406,402 379,749 7.02% 2 6 Kenya Commercial Bank 145 141 3 3 Co-operative Bank of Kenya 382,830 349,998 9.38% The 11 Ranking Criteria resulting ratio is referred to as the cost income ratio, which is 2 3 Co-operative Bank of Kenya 145 130 regarded as measure of efficiency. A lower ratio is desirable. 4 5 Standard Chartered Bank 285,125 250,274 13.92% 4 8 Barclays Bank of Kenya 153 164 1. Total Assets 5 4 Barclays Bank of Kenya 271,682 259,498 4.70% Here, we assess the cumulative asset portfolio owned by banks. We 7. Total Non-Performing Loans to Total Advances 5 2 Standard Chartered Bank 154 119 6 6 Diamond Trust 270,082 244,124 10.63% rank banks according to the volume of assets they own. However, Non-performing loans is the single most important threat that 6 5 Diamond Trust 161 137 this alone is not a good measure of a bank’s performance as a a bank can face. To assess its magnitude, it is weighed against 7 8 Stanbic Bank 239,408 204,895 16.84% large portion of a bank’s assets could be non-performing. What the total portfolio of all loans and advances that the bank has 7 9 Commercial Bank of Africa 167 167 8 7 Commercial Bank of Africa 229,525 210,877 8.84% adds to the bank’s bottom line is the quality of assets it owns. extended. A high ratio of non-performing loans to advances 8 4 I&M Bank 175 131 192,817 161,847 19.14% Our contention here is that a large bank is much more difficult is a reflection of imprudent lending practice and poor credit 8 9 NIC Bank 175 167 9 10 NIC Bank and challenging to run than a small one. This measure is purely a management. It poses a threat to customer’s deposits. A low ratio 10 9 I&M Bank 183,953 164,116 12.09% reward for size. is therefore desirable. 10 7 CFC Stanbic Bank 176 157 Tier II Ksh 50> 142 BANKING SURVEY | 2018 BANKING SURVEY | 2018 143 RANKINGS AND RATINGS RANKINGS AND RATINGS RETURN ON AVERAGE RETURN ON AVERAGE RANKING AVERAGE COST OF FUNDS RANKING PROFIT BEFORE TAX RANKING RANKING ASSETS CORE CAPITAL INSTITUTION INSTITUTION INSTITUTION INSTITUTION % ge % ge % ge 2017 2016 2017 2016 % ge 2017 2016 2017 2016 2017 2016 2017 2016 Change 2017 2016 2017 2016 Change Change Change 1 1 First Community Bank 1.23 1.50 (0.26) 1 1 Kenya Commercial Bank 27,471 28,482 -3.55% 1 2 Citibank 6.32 6.30 0.02 1 2 Equity Bank 41.80 46.06 (4.25) 2 * DIB Bank Kenya 1.39 * 2 2 Equity Bank 23,086 22,777 1.35% 2 1 Equity Bank 5.87 6.32 (0.44) 2 1 Kenya Commercial Bank 40.88 48.06 (7.18) 3 2 Citibank 1.60 1.71 (0.12) 3 3 Co-operative Bank of Kenya 16,502 18,024 -8.44% 3 7 Bank of Baroda 5.64 5.13 0.51 3 3 Commercial Bank of Africa 36.45 42.01 (5.56) 4 3 Equity Bank 1.99 2.09 (0.09) 4 5 Barclays Bank of Kenya 10,005 10,440 -4.16% 4 3 Kenya Commercial Bank 5.18 5.86 (0.68) 4 9 Bank of Baroda 34.02 31.40 2.62 5 4 Gulf African Bank 2.19 2.19 0.01 5 4 Standard Chartered Bank 9,510 12,764 -25.50% 5 8 Bank of India 5.12 4.86 0.27 5 7 Citibank 33.97 32.67 1.30 6 5 Barclays Bank of Kenya 2.91 2.96 (0.05) 6 6 Diamond Trust 8,227 8,876 -7.31% 6 6 Co-operative Bank of Kenya 4.50 5.23 (0.72) 6 4 Co-operative Bank of Kenya 29.79 37.86 (8.07) 7 7 Kenya Commercial Bank 2.95 3.34 (0.39) 7 7 I&M Bank 7,515 8,650 -13.12% 7 4 I&M Bank 4.32 5.55 (1.23) 7 11 Bank of India 27.81 28.16 (0.35) 8 14 Family Bank 3.14 5.15 (2.01) 8 8 Commercial Bank of Africa 7,189 7,593 -5.32% 8 9 Barclays Bank of Kenya 3.77 4.17 (0.40) 8 6 I&M Bank 27.59 35.86 (8.27) 9 8 Stanbic Bank 3.16 3.66 (0.50) 9 10 Citibank 6,373 6,033 5.63% 9 5 Standard Chartered Bank 3.55 5.27 (1.72) 9 5 Standard Chartered Bank 26.83 37.26 (10.43) 10 6 Standard Chartered Bank 3.21 3.20 0.00 10 11 NIC Bank 5,676 5,926 -4.21% 10 12 Victoria Commercial Bank 3.51 3.75 (0.24) 10 10 Barclays Bank of Kenya 26.20 28.68 (2.48) 11 9 National Bank of Kenya 3.29 4.09 (0.80) 11 9 Stanbic Bank 5,599 7,186 -22.09% 11 14 Commercial Bank of Africa 3.26 3.71 (0.44) 11 8 Diamond Trust Bank 25.29 32.19 (6.90) 12 18 Ecobank 3.43 5.47 (2.04) 12 12 Bank of Baroda 5,053 3,876 30.39% 12 13 NIC Bank 3.20 3.72 (0.52) 12 14 NIC Bank 21.41 25.26 (3.86) 13 * Mayfair Bank 3.61 * 13 14 Bank of India 2,675 2,185 22.41% 13 10 Diamond Trust Bank 3.20 4.08 (0.88) 13 13 Prime Bank 18.90 25.82 (6.92) 14 11 Co-operative Bank of Kenya 3.74 4.13 (0.39) 14 13 Prime Bank 1,977 2,335 -15.36% 14 15 Prime Bank 2.79 3.58 (0.80) 14 12 Stanbic Bank 18.55 26.38 (7.83) 15 10 NIC Bank 4.09 4.10 (0.01) 15 16 Victoria Commercial Bank 849 796 6.65% 15 16 Stanbic Bank 2.52 3.56 (1.04) 15 16 Victoria Commercial Bank 16.63 19.44 (2.81) 16 12 Commercial Bank of Africa 4.23 4.95 (0.72) 16 28 National Bank of Kenya 740 59 1159.10% 16 11 Habib A.G. Zurich 2.29 3.95 (1.66) 16 30 National Bank of Kenya 16.21 0.76 15.45 17 13 HFC Bank 4.46 5.03 (0.57) 17 20 Habib A.G. Zurich 409 621 -34.24% 17 20 Guardian Bank 1.49 2.06 (0.57) 17 32 First Community Bank 15.07 -2.79 17.86 18 17 Bank of Africa 4.51 5.42 (0.91) 18 15 HFC Bank 393 1,445 -72.81% 18 22 Credit Bank 1.34 1.40 (0.06) 18 15 Habib A.G. Zurich 14.39 23.00 (8.61) 19 22 GT Bank Kenya 4.60 6.81 (2.21) 19 17 Gulf African Bank 254 754 -66.33% 19 32 First Community Bank 1.34 -0.28 1.62 19 19 Guardian Bank 10.21 14.61 (4.40) 20 16 I&M Bank 4.72 5.35 (0.63) 20 18 GT Bank Kenya 241 659 -63.43% 20 28 Oriental Commercial Bank 1.13 0.39 0.74 20 21 ABC Bank 8.34 9.75 (1.41) 21 26 Sidian Bank 5.06 7.26 (2.20) 21 21 Guardian Bank 227 302 -24.68% 21 23 Paramount Universal Bank 1.01 1.05 (0.04) 21 22 Credit Bank 7.13 8.38 (1.25) 22 19 Diamond Trust Bank 5.21 5.60 (0.38) 22 34 First Community Bank 216 -42 -619.89% 22 17 Gulf African Bank 0.87 2.91 (2.04) 22 17 Gulf African Bank 5.98 18.58 (12.60) 23 15 Bank of India 5.25 5.35 (0.10) 23 22 ABC Bank 203 222 -8.67% 23 24 ABC Bank 0.86 1.00 (0.14) 23 24 Paramount Universal Bank 5.96 6.96 (1.00) 24 20 Habib A.G. Zurich 5.32 5.74 (0.42) 24 24 Credit Bank 179 158 13.32% 24 18 GT Bank Kenya 0.84 2.24 (1.39) 24 18 HFC Bank 4.67 17.39 (12.72) 25 23 Trans-National Bank 5.40 7.05 (1.65) 25 30 Oriental Commercial Bank 116 36 -1252.50% 25 30 National Bank of Kenya 0.67 0.05 0.62 25 20 GT Bank Kenya 4.50 12.58 (8.08) 26 24 Victoria Commercial Bank 6.27 7.15 (0.88) 26 25 Paramount Universal Bank 96 105 -8.27% 26 19 HFC Bank 0.60 2.11 (1.51) 26 29 Oriental Commercial Bank 4.22 1.50 2.72 27 25 Prime Bank 6.36 7.22 (0.86) 27 26 Development Bank of Kenya 57 95 -39.56% 27 27 Development Bank of Kenya 0.35 0.57 (0.22) 27 25 Development Bank of Kenya 3.42 5.44 (2.03) 28 27 Bank of Baroda 6.42 7.40 (0.98) 28 33 Bank of Africa 35 -17 -310.56% 28 21 Trans-National Bank 0.33 1.52 (1.19) 28 23 Trans-National Bank 1.78 8.20 (6.42) 29 21 UBA Kenya Bank 6.56 6.16 0.40 29 23 Trans-National Bank 34 160 -78.54% 29 26 UBA Kenya Bank 0.23 0.75 (0.52) 29 31 Bank of Africa 0.67 -0.27 0.93 30 28 Guardian Bank 6.62 7.81 (1.19) 30 29 UBA Kenya Ltd 14 50 -72.33% 30 31 Bank of Africa 0.06 -0.03 0.09 30 27 UBA Kenya Bank 0.64 3.08 (2.44) 31 31 Middle East Bank 6.97 8.59 (1.62) 31 35 Middle East Bank -42 -101 -59.02% 31 33 Middle East Bank -0.80 -1.86 1.05 31 33 Middle East Bank -3.58 -8.37 4.79 32 30 Credit Bank 7.07 8.48 (1.41) 32 31 Mayfair Bank -298 * 32 25 Family Bank -1.98 0.84 (2.82) 32 26 Family Bank -12.02 5.43 (17.45) 33 29 Consolidated Bank 7.65 8.31 (0.67) 33 39 SBM Bank (Fidelity Bank) -361 -2,268 -84.09% 33 36 Ecobank -2.85 -5.80 2.95 33 28 Sidian Bank -17.81 1.63 (19.44) 34 33 Oriental Commercial Bank 8.01 9.00 (0.99) 34 36 Consolidated Bank -438 -277 58.27% 34 29 Sidian Bank -3.15 0.31 (3.46) 34 36 Ecobank -22.54 -36.02 13.48 35 35 ABC Bank 8.24 10.62 (2.38) 35 27 Sidian Bank -633 62 -1127.43% 35 34 Consolidated Bank -3.20 -1.97 (1.23) 35 34 Jamii Bora Bank -30.65 -20.15 (10.51) 36 36 Paramount Universal Bank 8.33 10.76 (2.43) 36 37 Jamii Bora Bank -762 -491 55.17% 36 38 SBM Bank (Fidelity Bank) -3.33 -18.19 14.86 36 * DIB Bank Kenya -132.49 * 37 32 Spire Bank 8.35 8.78 (0.42) 37 31 DIB Bank Kenya -839 * 37 35 Jamii Bora Bank -5.33 -3.02 (2.31) 36 * Mayfair Bank -50.98 * 38 38 SBM Bank (Fidelity Bank) 8.57 14.30 (5.74) 38 19 Family Bank -1,371 633 -316.48% 38 37 Spire Bank -12.63 -6.85 (5.79) 37 35 Consolidated Bank -79.73 -30.25 (49.48) 39 34 Jamii Bora Bank 8.60 10.40 (1.80) 39 40 Ecobank -1,434 -2,889 -50.36% 39 * Mayfair Bank -16.79 * 38 37 Spire Bank -123.32 -60.57 (62.75) 40 37 Development Bank of Kenya 12.05 10.90 1.14 -1,576 -968 62.82% 40 * DIB Bank Kenya -64.31 * 40 38 SBM Bank (Fidelity Bank) -661.59 -948.28 286.68 40 38 Spire Bank AVERAGE 3.75 4.21 (0.46) TOTAL 133,465 145,325 -8.16% AVERAGE 3.47 3.96 (0.50) AVERAGE 27.25 32.07 (4.82) 144 BANKING SURVEY | 2018 BANKING SURVEY | 2018 145 RANKINGS AND RATINGS RANKINGS AND RATINGS TOTAL NPL/TOTAL ADVANC- LOAN LOSS PROVISION/ CORE CAPITAL/ TOTAL RANKING EFFICIENCY RATIO RANKING RANKING RANKING ES OPERATING INCOME DEPOSIT LIABILITY INSTITUTION % ge INSTITUTION INSTITUTION INSTITUTION 2017 2016 2017 2016 % ge % ge % ge Change 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 Change Change Change 1 1 Bank of India 17.08 18.95 (1.87) 1 1 Victoria Commercial Bank 0.08 0.00 0.08 1 1 Citibank 0.36 -1.06 1.42 1 * DIB Bank Kenya 98.62 * 2 2 Bank of Baroda 17.37 19.61 (2.24) 2 2 Bank of India 2.06 1.39 0.67 2 2 Victoria Commercial Bank 2.15 0.85 1.30 2 * Mayfair Bank 56.17 * 3 3 I&M Bank 31.38 29.71 1.67 3 4 Citibank 3.59 1.87 1.73 3 4 Bank of India 2.82 1.62 1.20 3 1 UBA Kenya Bank 51.55 64.09 (12.54) 4 5 Citibank 32.67 33.90 (1.23) 4 3 UBA Kenya Bank 4.30 1.81 2.49 4 * Mayfair Bank 3.50 * 4 3 Jamii Bora Bank 40.67 32.57 8.10 Diamond Trust Bank 35.47 30.67 4.80 5 4 5 8 Prime Bank 4.77 3.54 1.22 5 3 UBA Kenya Bank 4.51 1.46 3.05 5 2 Oriental Commercial Bank 37.25 38.90 (1.64) 6 6 NIC Bank 37.34 34.32 3.02 6 17 Barclays Bank of Kenya 5.28 7.37 (2.08) 6 16 Equity Bank 4.89 9.96 (5.07) 6 5 GT Bank Kenya 31.66 29.66 2.00 7 8 Victoria Commercial Bank 46.17 42.92 3.26 Bank of Baroda 5.55 8.13 (2.58) Middle East Bank 29.25 29.35 (0.10) 7 20 Bank of Baroda 5.63 8.08 (2.45) 7 13 7 6 8 7 Commercial Bank of Africa 46.51 37.00 9.51 8 11 ABC Bank 5.60 6.75 (1.15) 8 7 Citibank 29.08 29.10 (0.02) 8 15 Equity Bank 5.66 6.17 (0.52) 9 12 Equity Bank 46.74 44.78 1.96 9 29 Guardian Bank 6.38 21.47 (15.09) 9 4 Victoria Commercial Bank 28.40 30.89 (2.50) 9 14 Commercial Bank of Africa 5.70 5.86 (0.16) 10 11 Kenya Commercial Bank 46.80 44.59 2.22 10 7 Habib A.G. Zurich 6.66 4.16 2.50 10 14 Bank of India 23.79 22.57 1.23 10 10 Stanbic Bank 6.42 4.92 1.50 11 13 Standard Chartered Bank 48.36 45.21 3.15 11 8 Prime Bank 7.34 4.61 2.73 11 10 Trans-National Bank 23.75 24.29 (0.55) 11 7 Diamond Trust Bank 6.76 3.17 3.59 12 14 Co-operative Bank of Kenya 49.91 49.81 0.10 12 10 Kenya Commercial Bank 8.16 6.46 1.70 12 12 Sidian Bank 23.51 23.73 (0.21) 12 9 Co-operative Bank of Kenya 6.85 4.20 2.65 13 10 Prime Bank 50.03 43.99 6.05 13 * DIB Bank Kenya 8.22 * 13 8 Family Bank 22.74 28.26 (5.51) 13 16 Kenya Commercial Bank 7.14 6.47 0.68 14 9 Habib A.G. Zurich 54.09 43.54 10.55 14 31 National Bank of Kenya 8.33 22.85 (14.52) 14 9 Credit Bank 22.59 25.64 (3.05) 14 6 Credit Bank 7.19 2.98 4.20 15 15 Stanbic Bank 55.17 50.26 4.90 15 14 Trans-National Bank 8.42 8.96 (0.54) 15 16 HFC Bank 22.44 21.97 0.47 15 18 Standard Chartered Bank 8.12 7.67 0.45 16 17 Barclays Bank of Kenya 55.94 53.94 2.00 16 9 Co-operative Bank of Kenya 8.89 6.34 2.56 16 18 I&M Bank 22.19 20.47 1.72 16 13 GT Bank Kenya 8.31 5.55 2.76 17 20 Oriental Commercial Bank 63.79 60.32 3.46 17 27 Middle East Bank 9.47 19.47 (10.00) 17 19 Paramount Universal Bank 21.50 20.15 1.35 17 12 Guardian Bank 8.36 5.47 2.89 18 24 Gulf African Bank 65.87 67.06 (1.19) 18 18 Credit Bank 10.07 12.18 (2.11) 18 15 Development Bank of Kenya 21.10 22.33 (1.23) 19 30 First Community Bank 68.57 83.67 (15.10) 18 5 Habib A.G. Zurich 8.56 1.94 6.62 19 21 Paramount Universal Bank 10.23 12.61 (2.38) 19 20 Bank of Baroda 20.85 19.93 0.93 20 22 Paramount Universal Bank 69.38 65.53 3.85 19 21 Gulf African Bank 8.93 8.95 (0.02) 20 20 Barclays Bank of Kenya 10.46 12.59 (2.13) 20 21 Co-operative Bank of Kenya 20.58 19.75 0.83 21 19 Guardian Bank 70.23 54.05 16.18 20 25 Oriental Commercial Bank 9.57 10.82 (1.25) 21 26 Commercial Bank of Africa 12.31 19.38 (7.07) 21 17 Barclays Bank of Kenya 20.48 20.70 (0.22) 22 16 HFC Bank 71.00 50.40 20.60 21 19 Paramount Universal Bank 9.83 7.69 2.14 22 28 Development Bank of Kenya 12.35 20.81 (8.46) 22 13 Habib A.G. Zurich 20.06 23.13 (3.06) 23 23 GT Bank Kenya 71.99 66.82 5.17 22 24 NIC Bank 10.17 10.64 (0.46) 23 15 Family Bank 14.38 9.42 4.97 23 26 Equity Bank 19.82 18.48 1.34 24 21 Development Bank of Kenya 76.27 63.57 12.70 23 32 Jamii Bora Bank 11.14 15.33 (4.19) 24 25 First Community Bank 14.61 19.20 (4.58) 24 11 NIC Bank 19.47 23.77 (4.29) 25 25 Credit Bank 76.71 75.03 1.68 24 11 I&M Bank 12.16 5.45 6.71 25 38 SBM Bank (Fidelity Bank) 14.62 230.81 (216.18) 25 22 Prime Bank 18.96 19.08 (0.12) 26 18 Bank of Africa 77.02 53.95 23.07 25 22 HFC Bank 13.21 9.11 4.09 26 17 Stanbic Bank 14.81 10.12 4.69 26 27 Stanbic Bank 17.78 18.47 (0.70) 27 28 ABC Bank 81.74 78.63 3.11 26 27 Consolidated Bank 17.41 14.33 3.08 27 6 GT Bank Kenya 15.14 3.44 11.71 27 29 Guardian Bank 17.58 17.46 0.13 28 27 National Bank of Kenya 83.51 76.59 6.92 27 31 ABC Bank 17.73 15.20 2.53 28 12 Standard Chartered Bank 15.78 8.05 7.73 28 31 Diamond Trust Bank 16.89 16.00 0.89 29 26 Trans-National Bank 87.98 76.25 11.73 28 26 Family Bank 17.81 11.22 6.59 29 23 Diamond Trust Bank 15.86 16.72 (0.86) 29 23 Gulf African Bank 16.27 18.94 (2.67) Ecobank 88.36 230.55 (142.19) 30 38 29 34 Development Bank of Kenya 18.02 22.53 (4.51) 30 22 HFC Bank 17.24 16.17 1.07 30 32 Kenya Commercial Bank 16.16 15.92 0.24 31 32 UBA Kenya Bank 93.20 90.07 3.13 30 23 Trans-National Bank 18.61 9.99 8.62 31 33 NIC Bank 20.60 25.30 (4.70) 31 24 Standard Chartered Bank 15.76 18.69 (2.93) 32 33 Consolidated Bank 103.40 97.77 5.63 Oriental Commercial Bank 21.91 34.93 (13.02) SBM Bank (Fidelity Bank) 14.90 -21.26 36.17 31 29 Sidian Bank 19.07 14.82 4.25 32 34 32 38 33 34 Middle East Bank 104.98 110.92 (5.93) 33 35 Bank of Africa 22.44 46.36 (23.92) 33 30 Bank of Africa 14.84 16.19 (1.35) 32 33 Bank of Africa 22.96 21.93 1.03 34 29 Family Bank 106.79 83.55 23.24 34 24 I&M Bank 23.26 17.09 6.17 34 28 Spire Bank 14.47 18.37 (3.89) 33 28 Ecobank 28.76 14.55 14.22 35 31 Sidian Bank 109.92 85.10 24.83 35 5 Gulf African Bank 24.48 2.14 22.35 35 25 Ecobank 12.58 18.65 (6.08) 34 30 Spire Bank 32.57 14.98 17.59 36 37 SBM Bank (Fidelity Bank) 184.77 199.53 (14.76) 36 19 Sidian Bank 27.24 12.44 14.81 36 33 ABC Bank 12.37 14.42 (2.05) 35 37 National Bank of Kenya 35.04 39.80 (4.76) 37 35 Jamii Bora Bank 210.04 113.83 96.21 37 30 Consolidated Bank 30.96 21.50 9.46 37 35 Commercial Bank of Africa 10.94 11.01 (0.07) 36 36 First Community Bank 36.08 29.31 6.77 38 36 Spire Bank 248.19 135.74 112.45 38 32 Jamii Bora Bank 47.00 24.53 22.47 38 34 First Community Bank 9.52 11.56 (2.04) 37 35 Middle East Bank 36.30 23.08 13.22 38 * Mayfair Bank 549.91 * 39 37 Ecobank 60.45 93.95 (33.50) 39 36 Consolidated Bank 4.00 7.78 (3.79) 38 38 SBM Bank (Fidelity Bank) 48.02 60.56 (12.54) 40 * DIB Bank Kenya 6,359.97 * 40 36 Spire Bank 138.43 79.23 59.19 40 37 National Bank of Kenya 3.50 5.77 (2.27) AVERAGE 9.17 8.13 1.04 AVERAGE 51.01 48.38 2.63 11.70 12.23 (0.53) AVERAGE 16.70 17.31 (0.62) 146 BANKING SURVEY | 2018 BANKING SURVEY | 2018 147 RANKINGS AND RATINGS RANKINGS AND RATINGS QUICK ASSETS/TOTAL RANKING Total Insider Loans to LIABILITIES INSTITUTION RANKING Core Capital % ge INSTITUTION 2017 2016 2017 2016 % ge Bank Performance Ratings (BPR) 2016 - 2017 Change 2017 2016 2017 2016 Change The Think Business Bank Performance Rating [BPR] is designed to 1 * Mayfair Bank 113.45 * 1) Loan loss provisions to Operating Income 1 2 Bank of India 0.70 0.73 (0.04) be a simple yet credible measure of how stable a bank is. Our rating This ratio measures to what extent the operating income is weighed 2 1 Habib A.G. Zurich 80.48 80.45 0.03 adopts 12 key stability indicators which essentially, are the standard down by the provisions set aside for non-performing loans (NPL). 2 6 GT Bank Kenya 1.32 7.62 (6.29) measures used globally by rating agencies to rate banks. We have 3 2 Bank of India 77.65 72.00 5.65 A lower ratio is desirable. The industry score here was FE. The 3 3 Bank of Baroda 2.59 2.17 0.42 focused on the following key measures, which we have explained industry average was 28% in 2017 from 22% in 2017. This indicates 4 3 Bank of Baroda 67.67 66.39 1.28 further below: increase in the non-performing loans which is undesirable for the 4 4 Habib A.G. Zurich 2.95 2.98 (0.03) banking Industry. 5 * DIB Bank Kenya 64.92 * A. Asset Quality 5 1 SBM Bank (Fidelity Bank) 4.98 6.20- 11.19 INSTITUTION Loan Loss Provision / RATING SCORE 6 12 Ecobank 64.22 42.14 22.07 l Loan loss provisions to Operating Income 6 5 Victoria Commercial Bank 5.57 5.01 0.55 l Gross NPL to Total Loans Operating Income (%) 7 6 UBA Kenya Bank 62.43 59.19 3.24 2017 2016 % 2017 2016 2017 2016 7 15 Guardian Bank 5.74 15.04 (9.30) B. Capital Adequacy Change 8 5 Citibank 58.44 59.34 (0.90) 8 DIB Bank Kenya 6.35 l Core Capital to Total Deposits ABC Bank 22.25 6.75 15.5 E B 1 4 9 7 Standard Chartered Bank 53.44 50.12 3.33 l Core Capital to Total Risk Weighted Assets Bank of Africa 22.44 46.36 23.92- E F 1 0 9 Mayfair Bank 6.92 l Total Capital to Total Risk Weighted Assets 10 4 GT Bank Kenya 53.32 59.98 (6.66) Bank of Baroda 5.55 8.13 B B 4 4 10 7 Middle East Bank 7.28 7.65 (0.37) 11 9 Commercial Bank of Africa 51.34 47.49 3.85 C. Earnings Bank of India 3.66 1.62 2.05 A A 5 5 11 8 Citibank 8.67 9.44 (0.78) l Return on Average Assets (ROAA) Barclays Bank of Kenya 10.46 12.59 -2.13 C C 3 3 12 16 Prime Bank 49.20 40.42 8.78 l Return on Average Core Capital 12 9 NIC Bank 10.20 9.58 0.62 CFC Stanbic Bank 14.81 10.12 4.69 C C 3 3 13 30 Middle East Bank 47.34 30.65 16.70 l Average Funding Cost 13 13 Diamond Trust Bank 11.01 13.82 (2.81) l Efficiency Ratio Citibank 0.36 -1.06 1.42 A A 5 5 14 32 SBM Bank (Fidelity Bank) 46.52 29.47 17.05 Co-operative Bank of Kenya 8.89 6.34 2.56 B B 4 4 14 12 I&M Bank 11.64 11.70 (0.06) D. Liquidity 15 10 Diamond Trust Bank 45.29 44.45 0.83 Commercial Bank of Africa 12.31 19.38 7.07- C D 3 2 15 16 Equity Bank 13.12 15.21 (2.09) l Quick Assets to Total Liabilities 16 15 Equity Bank 44.99 40.63 4.36 l Quick Assets to Total Deposits Consolidated Bank 54.82 21.5 33.32 F E 0 1 16 10 Sidian Bank 15.91 10.57 5.34 Credit Bank 24.12 12.18 11.94 E C 1 3 17 18 Stanbic Bank 44.45 39.23 5.22 Rating Methodology 17 19 Co-operative Bank of Kenya 16.11 17.34 (1.23) Development Bank of Kenya 224.51 20.81 203.7 F E 0 1 Assessment scores are assigned to each bank on each of the 18 13 National Bank of Kenya 44.38 42.10 2.29 Diamond Trust 15.86 16.72 0.86- D D 2 2 18 25 Bank of Africa 16.99 25.99 (9.01) 12 parameters on the basis of grading benchmarked globally 19 8 Development Bank of Kenya 44.06 47.63 (3.57) acknowledged optimal levels, industry averages or statutory CBK DIB Bank Kenya - A 5 19 21 Prime Bank 17.52 18.73 (1.21) requirements, or all. Depending on their individual scores, the Ecobank 101.06 93.95 7.11 F F 0 0 20 26 NIC Bank 43.37 32.27 11.10 20 14 Spire Bank 17.74 14.32 3.42 banks have been graded as follows: Equity Bank 4.89 9.96 -5.07 A B 5 4 21 14 Paramount Universal Bank 42.71 41.82 0.89 Rating Score 21 20 Standard Chartered Bank 17.91 17.72 0.18 Grading Family Bank 14.38 9.42 4.97 C B 3 4 22 36 First Community Bank 41.02 21.06 19.96 Very Good A 5 First Community Bank 65.03 19.2 2.2 F D 0 2 UBA Kenya Bank 18.29 10.67 7.63 22 11 Good B 4 23 17 Guardian Bank 40.48 40.18 0.29 Giro Commercial Bank 3.55 3.04 2 A 5 23 23 HFC Bank 18.40 20.21 (1.81) Satisfactory/Average C 3 Gulf African Bank 38.94 42.83 (3.88) GT Bank Kenya 14.06 3.44 10.62 C A 3 5 24 11 Below Average D 2 24 17 Stanbic Bank 18.62 15.56 3.06 Guardian Bank 43.83 21.47 22.36 F E 0 1 25 27 Barclays Bank of Kenya 37.77 32.03 5.73 Poor E 1 25 24 Jamii Bora Bank 18.62 21.78 (3.16) Gulf African Bank 22.75 2.14 20.61 E A 1 5 Very Poor F 0 26 20 Trans-National Bank 37.68 38.37 (0.69) Habib A.G. Zurich 7.45 4.16 3.29 B A 4 5 26 26 Kenya Commercial Bank 19.21 27.37 (8.16) 27 19 Oriental Commercial Bank 36.35 39.00 (2.65) The grading for each bank in each of the parameters is summed up Habib Bank Ltd 2.21 0.3 0.5 B A 4 5 27 22 Ecobank 22.49 19.61 2.87 and averaged. This average becomes the overall rating of the bank Housing Finance 17.24 16.17 1.07 D D 2 2 28 29 Bank of Africa 36.29 31.14 5.15 28 28 Oriental Commercial Bank 28.84 28.82 0.02 for the year. Our overall rating of each bank and the industry follows I&M Bank 23.26 17.09 6.17 E D 1 2 the same scoring above. We have adopted a double alphabetical 29 25 Sidian Bank 36.21 33.07 3.14 Jamii Bora Bank 127.43 24.53 102.9 F E 0 1 29 31 Family Bank 30.18 31.95 (1.78) rating style, with each rating referring to a specific year. For 30 21 I&M Bank 34.11 36.01 (1.90) example, an AA rating implies a rating of A for 2016 and another Kenya Commercial Bank 8.16 6.46 1.7 B B 4 4 30 33 Barclays Bank of Kenya 30.23 34.72 (4.49) M Oriental Bank Limited 47.55 34.93 12.63 F F 0 0 31 28 ABC Bank 33.25 31.14 2.11 A for 2015. AA is the highest rating possible while FF is the lowest. 31 30 Gulf African Bank 30.25 29.63 0.61 It is important to note that our workings were based on published Mayfair Bank - A 32 24 Spire Bank 33.13 34.81 (1.68) financials approved by the Central Bank of Kenya. Where we have Middle East Bank 73.81 19.47 54.34 F D 0 2 32 29 ABC Bank 31.17 29.37 1.80 used averages, we considered the closing and opening figures for 33 22 Credit Bank 32.62 35.21 (2.59) National Bank of Kenya 8.33 22.85 -14.52 B E 4 1 33 32 Commercial Bank of Africa 36.55 34.60 1.95 each year, which implies that our closing figures for 2016 is the 34 31 Co-operative Bank of Kenya 32.58 30.18 2.41 opening for 2017 and closing figures for 2017 is opening figure NIC Bank 20.6 25.3 4.7- E F 1 0 34 27 Paramount Universal Bank 38.53 28.07 10.46 for 2018. Our rating includes 39 commercial banks for both 2016 Paramount Universal Bank 28.64 12.61 16.03 F C 0 3 35 23 Victoria Commercial Bank 28.85 34.85 (6.00) and 2015 and excludes Chase Bank, Dubai Bank and Imperial Bank 35 18 Credit Bank 42.83 17.11 25.72 Prime Bank 7.34 4.61 2.73 B A 4 5 (under receivership). We have also included the new banks that 36 34 Consolidated Bank 28.83 26.93 1.90 SBM Bank (Fidelity Bank) 431.04 230.81 200.23 F F 0 0 36 34 Trans-National Bank 54.98 54.08 0.90 acquired license last year. These are Mayfair Bank, DIB Bank and 37 33 Kenya Commercial Bank 28.12 29.08 (0.96) SBM Bank. Sidian Bank 39.73 12.44 27.29 F C 0 3 37 35 Development Bank of Kenya 63.27 65.61 (2.34) Spire Bank 275.61 79.23 196.38 F F 0 0 38 37 Family Bank 27.56 18.81 8.75 38 37 First Community Bank 76.49 79.41 (2.93) A. ASSET QUALITY Standard Chartered Bank 15.78 8.05 7.73 D B 2 4 39 38 HFC Bank 15.07 15.64 (0.57) A bank’s assets, comprise largely of its loans and advances to Trans-National Bank 52.88 8.96 43.92 F B 0 4 39 36 National Bank of Kenya 135.52 75.21 60.31 customers. These loans from a shareholders perspective are meant 40 35 Jamii Bora Bank 13.80 22.65 (8.85) UBA Kenya Ltd 4.91 1.46 3.45 A A 5 5 40 38 Consolidated Bank 152.06 85.60 66.46 to earn returns through various investments but mainly through AVERAGE 46.39 43.98 2.41 interest from loans to customers to ensure profitability of the entity. Victoria Commercial Bank 0.92 0.85 0.07 A A 5 5 AVERAGE 51.01 48.38 2.63 When loans become non-performing, they hurt the bank’s liquidity AVERAGE 28.29 12.23 16.06 F C 0 3 and impact negatively on its earnings. We have used 2 assessment parameters to ascertain asset quality as explained below; Source: Think Business Research 148 BANKING SURVEY | 2018 BANKING SURVEY | 2018 149 RANKINGS AND RATINGS RANKINGS AND RATINGS the following three ratios. The foregoing conclusion is that 2) Core Capital to Total Risk Weighted Assets 3) Total Capital to Total Risk Weighted Assets 2) Gross NPL to Total Loans capital adequacy is a major issue of concern for the industry. Total risk weighted assets comprise the total value of the different Over and above their core capital, some banks will have what This measure is an indication of the extent to which the loan asset categories weighted by their level of risk based on CBK is called supplementary capital to boost their capital base. The book is non- performing. The ratio shows whether or not a bank 1) Core Capital to Total Deposits guidelines. For example Cash and Government securities have combination of core capital and supplementary capital is what has been lending prudently. A lower ratio is desirable. The rule of the thumb is that bank’s should progressively convert a zero risk weighting. A higher ratio is desirable. The statutory is referred to as Total Capital. Supplementary capital can come The tough macroeconomic environment and the interest rate some of their earnings into capital to cover any liabilities that minimum ratio is 12 per cent most banks met this requirement. inform of long- term loans. The industry average was 19.2% in capping introduced in the last quarter of 2016 made the stagnate may occur in the future. For institutions with limited earnings The industry average was maintained at 15%.Giving a rating 2016 and 18.7% in 2017 a CC rating. In the loans and advances to customers which stood at Ksh 2.3 there are strategic decisions that need to be taken to ensure of BB for the industry. A few Banks did not the 12% threshold Total Capital/Total Risk trillion as at 31st December 2017. The gross non-performing capital adequacy. These include, rights issues, IPOs, mergers required by the Central Bank and these include, Bank of Africa, Weighted Assets (%) RATING SCORE loans however, increased by 38% from Ksh 219 billion to Ksh 265 and acquisitions or direct injections from shareholders. It is Consolidated Bank, First Community Bank and National Bank of INSTITUTION imperative that a bank is not being run on depositors’ funds, Kenya. Several other banks tinkered on the brink. billion in 2017. Due to the increase in the non-performing loans, 2017 2016 % Change 2017 2016 2017 2016 since these are liabilities on call at any time. the Industry rating dropped to C in 2017 giving an industry Core Capital/Total Risk This is a decisive measure of how much of shareholders’ own RATING SCORE ABC Bank 15.10 16.02 (0.92) C C 3 3 average of CB. INSTITUTION Weighted Assets (%) funds are at stake in the bank in comparison to the funds accessed Bank of Africa 15.78 16.16 (0.39) C C 3 3 through deposits. A higher ratio is desirable. The Central Bank of 2017 2016 % Change 2017 2016 2017 2016 Bank of Baroda 32.29 30.53 A A 5 5 Gross NPL/Total Loans (%) RATING SCORE Kenya (CBK) stipulates that banks must maintain a core capital ABC Bank 12.93 12.78 0.15 C C 3 3 INSTITUTION Bank of India 53.97 45.74 8.24 A A 5 5 of not less than 8 per cent of the total deposits. Bank of Africa 11.17 11.82 (0.65) C C 3 3 2017 2016 % Change 2017 2016 2017 2016 The industry average was 16.7% in 2016 a slight decrease to Barclays Bank of Kenya 18.03 17.86 0.16 C C 3 3 Bank of Baroda 30.94 29.47 0.05 A A 5 5 ABC Bank 21.59 18.91 2.68 E D 1 2 17.3% in 2017. A rating of AA. But there are some banks which CFC Stanbic Bank 16.93 18.12 (1.19) C C 3 3 Bank of India 52.00 43.71 8.29 A A 5 5 Bank of Africa 31.47 28.80 2.67 F F 0 0 need additional capital most notable Consolidated bank and Citibank 25.55 26.37 (0.82) A A 5 5 National Bank. Barclays Bank of Kenya 15.91 15.72 0.19 B B 4 4 Bank of Baroda 6.07 8.91 B B 4 4 Commercial Bank of Africa 17.32 18.45 (1.13) C C 3 3 Bank of India 2.09 1.41 0.69 A A 5 5 CFC Stanbic Bank 15.41 15.91 (0.49) B B 4 4 Consolidated Bank 5.09 7.90 (2.81) E E 1 1 Barclays Bank of Kenya 7.12 6.51 0.61 B B 4 4 Core Capital/Total Citibank 24.61 25.38 (0.77) A A 5 5 CFC Stanbic Bank 7.65 5.92 1.73 B B 4 4 Deposits Liability (%) RATING SCORE Commercial Bank of Africa 13.52 13.62 (0.11) C C 3 3 Co-operative Bank of Kenya 22.68 22.77 (0.09) B B 4 4 INSTITUTION Citibank 4.53 2.85 1.68 A A 5 5 Consolidated Bank 3.03 5.89 (2.86) E D 1 2 Credit Bank 15.85 22.85 (7.00) C B 3 4 2017 2016 % Change 2017 2016 2017 2016 Commercial Bank of Africa 7.29 7.09 0.20 B B 4 4 Co-operative Bank of Kenya 16.47 16.25 0.23 B B 4 4 Development Bank of Kenya 23.55 25.08 (1.53) B A 4 5 Consolidated Bank 25.11 19.75 5.36 F D 0 2 ABC Bank 12.37 14.42 (2.05) B B 4 4 Credit Bank 15.55 22.44 (6.88) B A 4 5 Diamond Trust 19.01 18.50 0.51 C C 3 3 Co-operative Bank of Kenya 7.21 4.67 2.54 B A 4 5 Bank of Africa 14.84 16.19 (1.35) B A 4 5 Bank of Baroda 20.85 19.93 A A 5 5 Development Bank of Kenya 20.06 21.59 (1.53) A A 5 5 DIB Bank Kenya 70.04 A 5 Credit Bank 8.62 8.08 0.53 B B 4 4 Bank of India 23.79 22.57 1.23 A A 5 5 Diamond Trust 17.32 16.22 1.10 B B 4 4 Ecobank 15.99 19.44 (3.45) C C 3 3 Development Bank of Kenya 21.57 25.73 (4.16) E F 1 0 Barclays Bank of Kenya 20.48 20.70 (0.22) A A 5 5 DIB Bank Kenya 69.95 A 5 Diamond Trust 7.59 3.90 3.69 B A 4 5 CFC Stanbic Bank 17.78 18.47 (0.70) A A 5 5 Equity Bank 16.54 15.47 1.07 C C 3 3 DIB Bank Kenya - A 5 Citibank 29.08 29.10 (0.02) A A 5 5 Ecobank 15.38 17.79 (2.41) B B 4 4 Family Bank 19.86 20.78 (0.92) C B 3 4 Ecobank 38.62 19.56 19.06 F D 0 2 Commercial Bank of Africa 10.94 11.01 (0.07) B B 4 4 Equity Bank 15.82 14.39 1.43 B C 4 3 First Community Bank 15.34 13.99 C D 3 2 Equity Bank 6.66 6.99 (0.34) B B 4 4 Consolidated Bank 4.00 7.78 (3.79) D C 2 3 Family Bank 16.36 17.23 (0.87) B B 4 4 GT Bank Kenya 26.87 27.09 (0.21) A A 5 5 Family Bank 20.20 13.11 7.08 E C 1 3 Co-operative Bank of Kenya 20.58 19.75 0.83 A A 5 5 Credit Bank 22.59 25.64 (3.05) A A 5 5 First Community Bank 10.68 10.40 0.03 C C 3 3 Guardian Bank 20.22 19.62 0.60 B C 4 3 First Community Bank 40.00 32.31 F F 0 0 Development Bank of Kenya 21.10 22.33 (1.23) A A 5 5 GT Bank Kenya 26.38 26.52 (0.13) A A 5 5 GT Bank Kenya 10.34 7.40 2.93 C B 3 4 Gulf African Bank 16.20 18.72 (2.52) C C 3 3 Diamond Trust 16.89 16.00 0.89 A A 5 5 Guardian Bank 19.64 19.04 0.60 B B 4 4 Guardian Bank 10.89 8.19 2.69 C B 3 4 DIB Bank Kenya 98.62 A 5 Habib A.G. Zurich 27.06 30.96 (3.90) A A 5 5 Gulf African Bank 14.23 18.60 (4.37) C B 3 4 Gulf African Bank 9.74 9.69 0.05 B B 4 4 Ecobank 12.58 18.65 (6.08) B A 4 5 Housing Finance 17.00 17.69 (0.68) C C 3 3 Habib A.G. Zurich 10.43 2.94 7.49 C A 3 5 Equity Bank 19.82 18.48 1.34 A A 5 5 Habib A.G. Zurich 26.37 30.36 (3.99) A A 5 5 I&M Bank 18.58 18.15 0.43 C C 3 3 Housing Finance 15.60 10.91 4.70 D C 2 3 Family Bank 22.74 28.26 (5.51) A A 5 5 Housing Finance 15.49 15.73 (0.24) B B 4 4 Jamii Bora Bank 19.33 20.08 (0.75) C B 3 4 I&M Bank 13.91 7.40 6.51 C B 3 4 First Community Bank 9.52 11.56 C B 3 4 I&M Bank 17.17 16.64 0.54 B B 4 4 GT Bank Kenya 31.66 29.66 2.00 A A 5 5 Jamii Bora Bank 21.21 20.40 0.82 E E 1 1 Kenya Commercial Bank 16.12 17.53 (1.41) C C 3 3 Guardian Bank 17.58 17.46 0.13 A A 5 5 Jamii Bora Bank 18.78 19.34 (0.57) B B 4 4 M Oriental Bank Limited 33.94 38.68 (4.75) A A 5 5 Kenya Commercial Bank 8.30 7.60 0.71 B B 4 4 Gulf African Bank 16.27 18.94 (2.67) A A 5 5 Kenya Commercial Bank 14.87 14.49 0.38 C C 3 3 M Oriental Bank Limited 10.44 12.04 (1.60) C C 3 3 Habib A.G. Zurich 20.06 23.13 (3.06) A A 5 5 M Oriental Bank Limited 32.69 37.44 (4.75) A A 5 5 Mayfair Bank 94.47 A 5 Mayfair Bank - A Housing Finance 22.44 21.97 0.47 A A 5 5 Mayfair Bank 94.47 A 5 Middle East Bank 42.57 31.64 10.93 A A 5 5 Middle East Bank 44.35 29.72 14.63 F F 0 0 I&M Bank 22.19 20.47 1.72 A A 5 5 Middle East Bank 42.06 31.29 10.77 A A 5 5 National Bank of Kenya 5.42 7.15 (1.73) E E 1 1 National Bank of Kenya 40.58 44.58 (4.00) F F 0 0 Jamii Bora Bank 40.67 32.57 8.10 A A 5 5 NIC Bank 11.20 11.24 (0.05) C C 3 3 Kenya Commercial Bank 16.16 15.92 0.24 A A 5 5 National Bank of Kenya 3.98 6.46 (2.48) E D 1 2 NIC Bank 19.90 21.63 (1.73) C B 3 4 M Oriental Bank Limited 37.25 38.90 (1.64) A A 5 5 Paramount Universal Bank 14.64 12.47 2.17 C C 3 3 NIC Bank 16.69 17.22 (0.52) B B 4 4 Paramount Universal Bank 29.46 27.39 2.06 A A 5 5 Mayfair Bank 56.17 A Prime Bank 5.66 4.62 1.04 B A 4 5 Middle East Bank 29.25 29.35 (0.10) A A 5 5 Paramount Universal Bank 28.26 26.02 2.24 A A 5 5 Prime Bank 22.48 21.02 1.46 B B 4 4 SBM Bank (Fidelity Bank) 58.64 64.83 (6.18) F F 0 0 National Bank of Kenya 3.50 5.77 (2.27) D C 2 3 Prime Bank 21.30 19.02 2.28 A B 5 4 SBM Bank (Fidelity Bank) 16.44 (12.81) 29.25 C F 3 0 Sidian Bank 21.05 16.97 4.08 E D 1 2 NIC Bank 19.47 23.77 (4.29) A A 5 5 SBM Bank (Fidelity Bank) 16.11 (14.83) 30.94 B F 4 0 Sidian Bank 16.46 23.25 (6.79) C B 3 4 Spire Bank 34.20 15.89 18.31 F D 0 2 Paramount Universal Bank 21.50 20.15 1.35 A A 5 5 Sidian Bank 16.32 23.05 (6.74) B A 4 5 Spire Bank 12.65 16.27 (3.62) D C 2 3 Standard Chartered Bank 12.64 11.35 1.29 C C 3 3 Prime Bank 18.96 19.08 (0.12) A A 5 5 Spire Bank 10.35 13.47 (3.12) C C 3 3 Trans-National Bank 21.66 12.68 8.97 E C 1 3 SBM Bank (Fidelity Bank) 14.90 (21.26) 36.17 B F 4 0 Standard Chartered Bank 18.52 20.91 (2.40) C B 3 4 Sidian Bank 23.51 23.73 (0.21) A A 5 5 Standard Chartered Bank 15.62 17.51 (1.89) B B 4 4 UBA Kenya Ltd 4.58 2.19 2.39 A A 5 5 Trans-National Bank 30.16 20.79 9.37 A B 5 4 Spire Bank 14.47 18.37 (3.89) B A 4 5 Trans-National Bank 28.33 19.74 8.60 A B 5 4 Victoria Commercial Bank 0.09 - 0.09 A A 5 5 Standard Chartered Bank 15.76 18.69 (2.93) A A 5 5 UBA Kenya Ltd 38.78 38.68 0.09 A A 5 5 UBA Kenya Ltd 38.78 38.46 0.32 A A 5 5 AVERAGE 10.98 9.53 1.46 C B 3 4 Trans-National Bank 23.75 24.29 (0.55) A A 5 5 Victoria Commercial Bank 22.74 25.45 (2.71) B A 4 5 Source: Think Business Research UBA Kenya Ltd 51.55 64.09 (12.54) A A 5 5 Victoria Commercial Bank 22.10 24.74 (2.64) A A 5 5 AVERAGE 18.71 19.21 (0.50) C C 3 3 Victoria Commercial Bank 28.40 30.89 (2.50) A A 5 5 AVERAGE 15.19 15.42 (0.23) B B 4 4 B. CAPITAL ADEQUACY AVERAGE 16.70 17.31 (0.62) A A 5 5 Source: Think Business Research Source: Think Business Research On capitalization, the aim is to measure a bank’s capital Source: Think Business Research sufficiency in relation to its liabilities. To do so, we have selected 150 BANKING SURVEY | 2018 BANKING SURVEY | 2018 151 RANKINGS AND RATINGS RANKINGS AND RATINGS 2) Return on Average Core Capital C. EARNINGS funds within manageable margins. This has a positive impact on The optimal efficiency ratio for banks in 50%. The industry A bank needs to be profitable to remain a going concern. That It is critical for banks to keep perky dividends flowing to their their profitability. A lower ratio is desirable. average in Kenya was also at 48% for 2016 and 51% for 2017 withstanding, it is not just the sheer size of the profit that shareholders. This ratio looks at the return on the actual The average cost of funds is not the absolute indicator of a bank’s giving it a score of CC. matters. Profitability can be measured through important investment made by the shareholders. A higher return is profitability but it is a good pointer to how profitable a bank is. desirable. If a bank’s cost of funds are low, the bank will be able to charge Efficiency Ratio (%) financial rations. To assess earnings, we have used the following RATING SCORE parameters: The industry average rating was CC, at 27% and 32% in 2016 and its borrowers lower interest rates. It will be more competitive. INSTITUTION 2017 respectively. The banks were Initial thought to be underpaying their customers 2017 2016 % Change 2017 2016 2017 2016 in terms of the interest paid on the customer deposits and hence 1) Return on Average Assets (ROAA) ABC Bank 81.74 78.63 3.11 F F 0 0 Return on Average Core the introduction of the Interest rate capping law. Despite this This is the ratio of Profit Before Tax (PBT) to the average of RATING SCORE total assets (at the beginning and at the end of the year). This INSTITUTION Capital (%) law the industry average funding cost was rated CC . Bank of Africa 77.02 53.95 23.07 F C 0 3 ratio is a measure of how well the bank’s assets were utilized 2017 2016 % Change 2017 2016 2017 2016 Bank of Baroda 17.37 19.61 (2.24) A A 5 5 Average Funding in realizing profits. A higher ratio is desirable. The reason for ABC Bank 8.34 9.75 (1.41) E E 1 1 RATING SCORE Bank of India 17.08 18.95 (1.87) A A 5 5 INSTITUTION Cost (%) averaging the total assets is because the assets grow throughout Bank of Africa 0.67 (0.27) 0.93 F F 0 0 Barclays Bank of Kenya 55.94 53.94 2.00 D C 2 3 2017 2016 % Change 2017 2016 2017 2016 the year. Taking the end year total would not tell the true picture Bank of Baroda 34.02 31.40 2.62 C C 3 3 ABC Bank 8.24 10.62 (2.38) E F 1 0 CFC Stanbic Bank 55.17 50.26 4.90 D C 2 3 of how the assets were deployed. This is achieved by deriving the Bank of India 27.81 28.16 (0.35) C C 3 3 Bank of Africa 4.51 5.42 (0.91) C D 3 2 Citibank 32.67 33.90 (1.23) A A 5 5 average over a one year period, at the beginning and at the end Barclays Bank of Kenya 26.20 28.68 (2.48) C C 3 3 Bank of Baroda 6.42 7.40 D D 2 2 of the year.The year 2017 being an election year and also due to CFC Stanbic Bank 18.55 26.38 (7.83) D C 2 3 Commercial Bank of Africa 46.51 37.00 9.51 C B 3 4 the introduction of the Interest Law capping for the commercial Bank of India 5.25 5.35 (0.10) D D 2 2 Citibank 33.97 32.67 1.30 C C 3 3 Consolidated Bank 103.40 97.77 5.63 F F 0 0 banks, the industry profit dropped by 8% from Ksh145 billion in Barclays Bank of Kenya 2.91 2.96 (0.05) A A 5 5 Commercial Bank of Africa 36.45 42.01 (5.56) B B 4 4 Co-operative Bank of Kenya 49.91 49.81 0.10 C C 3 3 2016 to Ksh 143 billion in 2017. The rating for the industry is CD. CFC Stanbic Bank 3.16 3.66 (0.50) B B 4 4 Consolidated Bank (79.73) (30.25) (49.48) F F 0 0 The ROAA thus dropped from 3.96% to 3.47% in 2017 giving an Citibank 1.60 1.71 (0.12) A A 5 5 Credit Bank 76.71 75.03 1.68 F F 0 0 Co-operative Bank of Kenya 29.79 37.86 (8.07) C B 3 4 industry rating of ED. Commercial Bank of Africa 4.23 4.95 (0.72) C C 3 3 Development Bank of Kenya 76.27 63.57 12.70 F D 0 2 Credit Bank 7.13 8.38 (1.25) E E 1 1 Return on Average Consolidated Bank 7.65 8.31 (0.67) D E 2 1 Development Bank of Kenya 3.42 5.44 (2.03) F E 0 1 Diamond Trust 35.47 30.67 4.80 B A 4 5 Assets (%) RATING SCORE Co-operative Bank of Kenya 3.74 4.13 (0.39) B C 4 3 INSTITUTION Diamond Trust 25.29 32.19 (6.90) C C 3 3 DIB Bank Kenya 6,359.97 F 0 Credit Bank 7.07 8.48 (1.41) D E 2 1 DIB Bank Kenya (132.49) F 0 Ecobank 88.36 230.55 (142.19) F F 0 0 2017 2016 % Change 2017 2016 2017 2016 Development Bank of Kenya 12.05 10.90 1.14 F F 0 0 Ecobank (22.54) (36.02) 13.48 F F 0 0 ABC Bank 0.86 1.00 (0.14) E E 1 1 Diamond Trust 5.21 5.60 (0.38) D D 2 2 Equity Bank 46.74 44.78 1.96 C B 3 4 Equity Bank 41.80 46.06 (4.25) B A 4 5 Bank of Africa 0.06 -0.03 0.09 E F 1 0 DIB Bank Kenya 1.39 A 5 Family Bank 106.79 83.55 23.24 F F 0 0 Bank of Baroda 5.64 5.13 0.51 A A 5 5 Family Bank (12.02) 5.43 (17.45) F E 0 1 Ecobank 3.43 5.47 (2.04) B D 4 2 First Community Bank 68.57 83.67 E F 1 0 Bank of India 5.12 4.86 0.27 A B 5 4 First Community Bank 15.07 (2.79) 17.86 D F 2 0 Equity Bank 1.99 2.09 (0.09) A A 5 5 Barclays Bank of Kenya 3.77 4.17 (0.40) D C 2 3 GT Bank Kenya 4.50 12.58 (8.08) F E 0 1 GT Bank Kenya 71.99 66.82 5.17 E E 1 1 CFC Stanbic Bank 2.52 3.56 (1.04) E D 1 2 Family Bank 3.14 5.15 (2.01) B D 4 2 Guardian Bank 10.21 14.61 (4.40) E E 1 1 Guardian Bank 70.23 54.05 16.18 E C 1 3 Commercial Bank of Africa 3.26 3.71 (0.44) E D 1 2 First Community Bank 1.23 1.50 A A 5 5 Gulf African Bank 5.98 18.58 (12.60) E D 1 2 Consolidated Bank -3.20 -1.97 (1.23) F F 0 0 GT Bank Kenya 4.60 6.81 (2.21) C D 3 2 Gulf African Bank 65.87 67.06 (1.19) E E 1 1 Habib A.G. Zurich 14.39 23.00 (8.61) E D 1 2 Co-operative Bank of Kenya 4.50 5.23 (0.72) B A 4 5 Guardian Bank 6.62 7.81 (1.19) D D 2 2 Habib A.G. Zurich 54.09 43.54 10.55 C B 3 4 Credit Bank 1.34 1.40 (0.06) E E 1 1 Housing Finance 4.67 17.39 (12.72) F D 0 2 Gulf African Bank 2.19 2.19 0.01 A A 5 5 Housing Finance 71.00 50.40 20.60 E C 1 3 Development Bank of Kenya 0.35 0.57 (0.22) E E 1 1 I&M Bank 27.59 35.86 (8.27) C B 3 4 Habib A.G. Zurich 5.32 5.74 (0.42) D D 2 2 Diamond Trust 3.20 4.08 (0.88) E C 1 3 Jamii Bora Bank (30.65) (20.15) (10.51) F F 0 0 I&M Bank 31.38 29.71 1.67 A A 5 5 DIB Bank Kenya -64.31 F 0 Housing Finance 4.46 5.03 (0.57) C D 3 2 Kenya Commercial Bank 40.88 48.06 (7.18) B A 4 5 Jamii Bora Bank 210.04 113.83 96.21 F F 0 0 Ecobank -2.85 -5.80 2.95 F F 0 0 I&M Bank 4.72 5.35 (0.63) C D 3 2 M Oriental Bank Limited 4.22 1.50 2.72 F F 0 0 Equity Bank 5.87 6.32 (0.44) A A 5 5 Jamii Bora Bank 8.60 10.40 (1.80) E F 1 0 Kenya Commercial Bank 46.80 44.59 2.22 C B 3 4 Mayfair Bank (50.98) F Family Bank -1.98 0.84 (2.82) F E 0 1 Kenya Commercial Bank 2.95 3.34 (0.39) A B 5 4 M Oriental Bank Limited 63.79 60.32 3.46 D D 2 2 First Community Bank 1.34 -0.28 1.62 E F 1 0 Middle East Bank (3.58) (8.37) 4.79 F F 0 0 M Oriental Bank Limited 8.01 9.00 (0.99) E E 1 1 Mayfair Bank 549.91 F Giro Commercial Bank 0.00 3.63 (3.63) E D 1 2 National Bank of Kenya 16.21 0.76 15.45 D F 2 0 GT Bank Kenya 0.84 2.24 (1.39) E E 1 1 Mayfair Bank 3.61 B NIC Bank 21.41 25.26 (3.86) D C 2 3 Middle East Bank 104.98 110.92 F F 0 0 Guardian Bank 1.49 2.06 (0.57) E E 1 1 Middle East Bank 6.97 8.59 (1.62) D E 2 1 Paramount Universal Bank 5.96 6.96 (1.00) E E 1 1 National Bank of Kenya 83.51 76.59 6.92 F F 0 0 Gulf African Bank 0.87 2.91 (2.04) E E 1 1 National Bank of Kenya 3.29 4.09 (0.80) B C 4 3 Prime Bank 18.90 25.82 (6.92) D C 2 3 Habib A.G. Zurich 2.29 3.95 (1.66) E D 1 2 NIC Bank 4.09 4.10 (0.01) C C 3 3 NIC Bank 37.34 34.32 3.02 B A 4 5 Habib Bank Ltd 0.00 4.33 (4.33) E C 1 3 Paramount Universal Bank 8.33 10.76 (2.43) E F 1 0 Paramount Universal Bank 69.38 65.53 3.85 E E 1 1 Housing Finance 0.60 2.11 (1.51) E E 1 1 SBM Bank (Fidelity Bank) (661.59) (948.28) 286.68 F F 0 0 I&M Bank 4.32 5.55 (1.23) C A 3 5 Sidian Bank (17.81) 1.63 (19.44) F F 0 0 Prime Bank 6.36 7.22 (0.86) D D 2 2 Prime Bank 50.03 43.99 6.05 C B 3 4 Jamii Bora Bank -5.33 -3.02 (2.31) F F 0 0 SBM Bank (Fidelity Bank) 8.57 14.30 (5.74) E F 1 0 SBM Bank (Fidelity Bank) 184.77 199.53 (14.76) F F 0 0 Kenya Commercial Bank 5.18 5.86 (0.68) A A 5 5 Spire Bank (123.32) (60.57) (62.75) F F 0 0 Sidian Bank 5.06 7.26 (2.20) D D 2 2 Sidian Bank 109.92 85.10 24.83 F F 0 0 M Oriental Bank Limited 1.13 0.39 0.74 E E 1 1 Standard Chartered Bank 26.83 37.26 (10.43) C B 3 4 Spire Bank 8.35 8.78 (0.42) E E 1 1 Mayfair Bank -16.79 F Spire Bank 248.19 135.74 112.45 F F 0 0 Trans-National Bank 1.78 8.20 (6.42) F E 0 1 Standard Chartered Bank 3.21 3.20 0.00 B B 4 4 Middle East Bank -0.80 -1.86 1.05 F F 0 0 UBA Kenya Ltd 0.64 3.08 (2.44) F F 0 0 Standard Chartered Bank 48.36 45.21 3.15 C C 3 3 National Bank of Kenya 0.67 0.05 0.62 E E 1 1 Trans-National Bank 5.40 7.05 (1.65) D D 2 2 NIC Bank 3.20 3.72 (0.52) E D 1 2 Victoria Commercial Bank 16.63 19.44 (2.81) D D 2 2 UBA Kenya Ltd 6.56 6.16 0.40 D D 2 2 Trans-National Bank 87.98 76.25 11.73 F F 0 0 AVERAGE 27.25 32.07 (4.82) C C 3 3 Paramount Universal Bank 1.01 1.05 (0.04) E E 1 1 Victoria Commercial Bank 6.27 7.15 (0.88) D D 2 2 UBA Kenya Ltd 93.20 90.07 F F 0 0 Prime Bank 2.79 3.58 (0.80) E D 1 2 Source: Think Business Research AVERAGE 3.75 4.21 (0.46) B C 4 3 SBM Bank (Fidelity Bank) -3.33 -18.19 14.86 F F 0 0 Victoria Commercial Bank 46.17 42.92 3.26 C B 3 4 Source: Think Business Research Sidian Bank -3.15 0.31 (3.46) F E 0 1 3) Average Funding Cost AVERAGE 51.01 48.38 2.63 C C 3 3 Spire Bank -12.63 -6.85 (5.79) F F 0 0 This is the interest rate paid for funds accessed and deployed 4) Efficiency Ratio Source: Think Business Research Standard Chartered Bank 3.55 5.27 (1.72) D A 2 5 by the bank. It is the ratio of interest expense to total deposits This is the ratio of Operating expenses to Total Net Operating Trans-National Bank 0.33 1.52 (1.19) E E 1 1 and borrowed funds (average at the beginning and close of end UBA Kenya Ltd 0.23 0.75 (0.52) E E 1 1 Income, also known as Cost Income Ratio. It is a measure of of the year). Victoria Commercial Bank 3.51 3.75 D D 2 2 how efficiently the bank is utilizing its resources to generate Citibank 6.32 6.30 0.02 A A 5 5 income. An efficient bank is a promising one because share- AVERAGE 3.47 3.96 (0.50) E D 1 2 Banks, like other businesses, have to strive to reduce their holders can expect higher returns in the future. A lower ratio is Source: Think Business Research funding cost to the barest minimum and control their cost of desirable. 152 BANKING SURVEY | 2018 BANKING SURVEY | 2018 153 RANKINGS AND RATINGS RANKINGS AND RATINGS that a bank plays an inter-mediatory role by accessing funds Quick Assets/Total D. LIQUIDITY RATING SCORE Quick Assets/ through deposits and lending it out as loans to those who need Liabilities (%) RATING SCORE A bank must be liquid enough to meet its day-to-day obligations INSTITUTION Total Deposits (%) to its customers. The objective of maintaining a certain liquidity it for production. This is what fuels economic growth as well as INSTITUTION earnings for the bank and the depositors who earn an interest. 2017 2016 % Change 2017 2016 2017 2016 ratio is to ensure that depositors are able to get their money as and 2017 2016 % Change 2017 2016 2017 2016 when they require it. Every bank seeking to maintain its integrity in A lower ratio is safer although it could imply a high ability to ABC Bank 35.79 36.83 (1.04) A A 5 5 ABC Bank 33.25 31.14 2.11 A A 5 5 the market and continue in business must ensure that it always has mobilize deposits faster than the bank can disburse or a high Bank of Africa 49.77 42.94 6.83 A A 5 5 Bank of Africa 36.29 31.14 5.15 A A 5 5 enough cash to pay its depositor. For this assessment, we have used level of risk averseness therefore the tendency to channel money Bank of Baroda 68.14 67.28 A A 5 5 Bank of Baroda 67.67 66.39 67.67 A A 5 5 the following: to more secure investments like government securities. A bank Bank of India 77.96 72.54 5.43 A A 5 5 may therefore not be earning an optimal return if this ratio is Bank of India 77.65 72.00 5.65 A A 5 5 Barclays Bank of Kenya 45.51 38.33 7.19 A A 5 5 1) Net Loans to Total Deposits too low. Barclays Bank of Kenya 37.77 32.03 5.73 A A 5 5 CFC Stanbic Bank 51.33 44.27 7.06 A A 5 5 Banks attract deposits, which they in turn loan out. Ideally, if HFC Bank and Family Bank did not perform well in this category. CFC Stanbic Bank 44.45 39.23 5.22 A A 5 5 Citibank 69.69 78.21 (8.52) A A 5 5 banks were to lend out all the money received as deposits, they Housing Finance, previously a mortgage finance company Citibank 58.44 59.34 (0.90) A A 5 5 Commercial Bank of Africa 54.51 50.33 4.18 A A 5 5 appears to be the worst hit by this ratio but is because of the wouldn’t have anything left to pay a depositors who come back Commercial Bank of Africa 51.34 47.49 3.85 A A 5 5 Consolidated Bank 40.33 35.17 5.16 A A 5 5 long-term nature of its mortgages, which is previously all it did to get their money. Consolidated Bank 28.83 26.93 1.90 B B 4 4 Co-operative Bank of Kenya 35.84 33.28 2.56 A B 5 4 in terms of lending. The critical approach is to maintain a good balance, considering Co-operative Bank of Kenya 32.58 30.18 2.41 A A 5 5 Credit Bank 33.52 36.30 (2.78) B A 4 5 Credit Bank 32.62 35.21 (2.59) A A 5 5 Development Bank of Kenya 76.96 82.74 (5.77) A A 5 5 Development Bank of Kenya 44.06 47.63 (3.57) A A 5 5 2) Quick Assets to Total Liabilities Diamond Trust 49.15 49.71 (0.56) A A 5 5 Net Loans/ Diamond Trust 45.29 44.45 0.83 A A 5 5 RATING SCORE Quick assets are those assets that are either in cash form or DIB Bank Kenya 67.79 A 5 INSTITUTION Total Deposits (%) DIB Bank Kenya 64.92 A 5 can quickly be converted into cash, for example treasury bonds Ecobank 65.84 44.97 20.88 A A 5 5 Ecobank 64.22 42.14 22.07 A A 5 5 2017 2016 % Change 2017 2016 2017 2016 and bills. Items falling into this category must have a maturity Equity Bank 51.89 47.98 3.91 A A 5 5 Equity Bank 44.99 40.63 4.36 A A 5 5 ABC Bank 76.52 86.64 (10.12) B C 4 3 period of less than five years. The bulk of a bank’s liabilities Family Bank 33.23 25.20 8.03 B C 4 3 Family Bank 27.56 18.81 8.75 B C 4 3 Bank of Africa 82.16 91.43 (9.26) B C 4 3 are often the deposits it takes from customers. But an overall First Community Bank 43.42 22.30 21.8 A D 5 2 First Community Bank 41.02 21.06 19.96 A B 5 4 Bank of Baroda 54.33 53.71 A A 5 5 look at the bank’s total liabilities, which includes deposits and GT Bank Kenya 61.09 69.22 (8.14) A A 5 5 GT Bank Kenya 53.32 59.98 (6.66) A A 5 5 Bank of India 46.05 50.66 (4.61) A A 5 5 borrowed funds is advisable, if one is to look at the bank in its Guardian Bank 41.43 40.76 0.67 A A 5 5 Guardian Bank 40.48 40.18 0.29 A A 5 5 Barclays Bank of Kenya 88.96 92.74 (3.78) C C 3 3 totality. Essentially, this ratio will establish a bank’s ability to Gulf African Bank 40.13 43.59 (3.46) A A 5 5 Gulf African Bank 38.94 42.83 (3.88) A A 5 5 CFC Stanbic Bank 73.05 74.68 (1.63) A A 5 5 meet its liabilities. The CBK has a regulatory minimum of 20% Habib A.G. Zurich 92.47 90.02 2.46 A A 5 5 Habib A.G. Zurich 80.48 80.45 0.03 A A 5 5 Citibank 56.81 43.20 13.60 A A 5 5 on this ratio. A high ratio implies a high level of liquidity. Housing Finance 21.25 23.51 (2.26) D D 2 2 Housing Finance 15.07 15.64 (0.57) C C 3 3 Commercial Bank of Africa 54.39 57.97 (3.58) A A 5 5 All banks met the requisite minimum of 20%. In fact the I&M Bank 37.84 39.66 (1.82) A A 5 5 industry average was 74.9% and 79.6% in 2017 and 2016 I&M Bank 34.11 36.01 (1.90) A A 5 5 Consolidated Bank 95.10 95.60 (0.50) D D 2 2 Jamii Bora Bank 23.11 33.33 (10.21) D B 2 4 respectively. An AA score. Jamii Bora Bank 13.80 22.65 (8.85) C B 3 4 Co-operative Bank of Kenya 88.24 89.93 (1.69) C C 3 3 Kenya Commercial Bank 29.46 31.42 (1.96) C B 3 4 Our conclusion is that Kenya’s banking sector remains highly Kenya Commercial Bank 28.12 29.08 (0.96) B B 4 4 Credit Bank 84.45 83.59 0.86 B B 4 4 M Oriental Bank Limited 36.76 39.30 (2.53) A A 5 5 liquid and there is scope for more innovation in creating new M Oriental Bank Limited 36.35 39.00 (2.65) A A 5 5 Development Bank of Kenya 120.02 112.24 7.78 F E 0 1 Mayfair Bank 129.73 A and more investment opportunities to channel funds. Mayfair Bank 113.45 A Diamond Trust 70.97 73.59 (2.61) A A 5 5 Middle East Bank 47.97 30.99 16.97 A B 5 4 Middle East Bank 47.34 30.65 16.70 A A 5 5 DIB Bank Kenya 22.62 A 5 National Bank of Kenya 45.59 45.42 0.18 A A 5 5 National Bank of Kenya 44.38 42.10 2.29 A A 5 5 Ecobank 35.70 65.58 (29.88) A A 5 5 NIC Bank 50.05 39.75 10.30 A A 5 5 NIC Bank 43.37 32.27 11.10 A A 5 5 Equity Bank 71.81 77.11 (5.30) A B 5 4 Paramount Universal Bank 42.99 42.17 0.83 A A 5 5 Paramount Universal Bank 42.71 41.82 0.89 A A 5 5 Family Bank 91.28 118.32 (27.05) C F 3 0 Prime Bank 51.83 43.15 8.68 A A 5 5 Prime Bank 49.20 40.42 8.78 A A 5 5 First Community Bank 65.80 86.44 A C 5 3 SBM Bank (Fidelity Bank) 68.93 73.23 (4.30) A A 5 5 SBM Bank (Fidelity Bank) 46.52 29.47 17.05 A B 5 4 GT Bank Kenya 79.54 70.09 9.45 B A 4 5 Sidian Bank 40.60 35.25 5.35 A A 5 5 Sidian Bank 36.21 33.07 3.14 A A 5 5 Guardian Bank 73.30 72.89 0.42 A A 5 5 Spire Bank 48.37 48.84 (0.47) A A 5 5 Spire Bank 33.13 34.81 (1.68) A A 5 5 Gulf African Bank 74.26 72.35 1.91 A A 5 5 Standard Chartered Bank 56.87 54.83 2.04 A A 5 5 Standard Chartered Bank 53.44 50.12 3.33 A A 5 5 Habib A.G. Zurich 39.80 41.69 (1.89) A A 5 5 Trans-National Bank 38.69 39.74 (1.05) A A 5 5 Trans-National Bank 37.68 38.37 (0.69) A A 5 5 Housing Finance 134.23 140.46 (6.23) F F 0 0 UBA Kenya Ltd 64.65 61.55 3.10 A A 5 5 UBA Kenya Ltd 62.43 59.19 3.24 A A 5 5 I&M Bank 89.88 88.39 1.49 C C 3 3 Victoria Commercial Bank 31.12 38.51 (7.39) B A 4 5 Victoria Commercial Bank 28.85 34.85 (6.00) B A 4 5 Jamii Bora Bank 148.10 113.45 34.65 F E 0 1 AVERAGE 46.39 43.98 2.41 A A 5 5 AVERAGE 41.80 38.77 3.03 A A 5 5 Kenya Commercial Bank 87.10 90.23 (3.13) C C 3 3 Source: Think Business Research Source: Think Business Research M Oriental Bank Limited 97.66 95.97 1.69 D D 2 2 Overall assessment tally Mayfair Bank 11.32 A AA 1 Very good Middle East Bank 70.86 90.51 (19.64) A C 5 3 3) Quick Assets to Total Deposits AB 0 Good National Bank of Kenya 52.28 56.44 (4.16) A A 5 5 This ratio is a much better measure of just how quickly a bank BA 0 Good NIC Bank 79.10 100.29 (21.19) B D 4 2 can respond to demands for cash from their depositors. If the BB 15 Good Paramount Universal Bank 76.36 75.13 1.23 B B 4 4 ratio of quick assets to total deposits is high it implies that the BC 2 Good Prime Bank 65.85 77.08 (11.24) A B 5 4 bank is liquid enough to settle its obligations with depositors CA 0 Above average CB 0 Above average SBM Bank (Fidelity Bank) 64.38 113.84 (49.47) A E 5 1 promptly. The industry average was equally high at 46.3% In CC 8 Average Sidian Bank 80.69 85.06 (4.37) B C 4 3 2017 and 43.9% in 2016%. An AA score. CD 1 Average Spire Bank 76.80 87.02 (10.22) B C 4 3 DC 5 Below average Standard Chartered Bank 55.87 65.05 (9.18) A A 5 5 DD 7 Below average Trans-National Bank 83.49 79.87 3.62 B B 4 4 UBA Kenya Ltd 77.98 91.97 B C 4 3 We have attributed the industry overall score to the Central Bank of Kenya because the performance of the industry largely reflects Victoria Commercial Bank 99.91 97.43 2.48 D D 2 2 its performance as the regulator. In which case the industry AVERAGE 74.91 79.63 (4.72) A B 5 4 Source: Think Business Research overall score of BB implies a score of “Good” performance rating for the CBK. 154 BANKING SURVEY | 2018 BANKING SURVEY | 2018 155 RANKINGS AND RATINGS OVERALL RATING OF BANKS INSTITUTION Total score Average Overall rating score 2017 2016 2017 2016 2017 2017 Kenya Commercial Bank 64 66 4 4 B B Co-operative Bank of Kenya 63 66 4 4 B B Equity Bank 71 71 4 4 B B Barclays Bank of Kenya 58 61 4 4 B B Standard Chartered Bank 56 67 4 4 B B Commercial Bank of Africa 55 57 3 4 C B CFC Stanbic Bank 54 59 3 4 C B Diamond Trust 53 60 3 4 C B I&M Bank 55 62 3 4 C B NIC Bank 49 52 3 3 C C National Bank of Kenya 37 30 2 2 D D Citibank 76 76 5 5 A A Bank of Africa 33 31 2 2 D D Family Bank 36 37 2 2 D D Housing Finance 32 38 2 2 D D Prime Bank 54 60 3 4 C B Ecobank 34 35 2 2 D D Bank of India 70 68 4 4 B B GT Bank Kenya 47 52 3 3 C C ABC Bank 33 35 2 2 D D TBL MFB SURVEY 2017 - 2018 Gulf African Bank 50 57 3 4 C B Victoria Commercial Bank 54 58 3 4 C B RESULTS AND ANALYSIS Development Bank of Kenya 28 33 2 2 D D Micro - Finance Bank Results and Analysis as at 31st December 2017 Spire Bank 25 30 2 2 D D SBM Bank (Fidelity Bank) 28 10 2 1 D E Sidian Bank 32 40 2 3 D C First Community Bank 31 30 2 2 C D Giro Commercial Bank 54 60 4 4 C B Banking Consolidated Bank 19 24 1 2 E D Guardian Bank 43 47 3 3 C C Survey 2018 Jamii Bora Bank 21 25 1 2 E D Habib A.G. Zurich 51 61 3 4 C B Paramount Universal Bank 42 43 3 3 C C Trans-National Bank 37 45 2 3 D C Habib Bank Ltd 57 57 4 4 B B Credit Bank 42 45 3 3 C C M Oriental Bank Limited 39 39 2 2 D D Middle East Bank 34 31 2 2 D D UBA Kenya Ltd 50 49 3 3 C C DIB Bank Kenya 55 3 C Mayfair Bank 55 3 AVERAGE 52 56 3 4 C B 156 BANKING SURVEY | 2018 BANKING SURVEY | 2018 157 TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB Survey 2018 – 2017 Results and Analysis 2017 MFB Sector Results 31st December 2017 Overall Sector Results (Selected) The financial results in this report do not include those for % Balance Sheet - KSh Billions 2017 2016 Rafiki Micro – Finance Trust which had not been published at Change the time of compilation of the report. Total Assets -16.1% 60,854 72,502 Executive Summary Customer Deposits -9.0% 35,612 39,153 Selected Sector Results at a Glance Loans & Advances to Customers -15.3% 41,750 49,300 Micro Finance Banking Sector Key high-lights of the past year % Income - KSh Billions 2017 2016 Change Interest on Loans & Advances -9.6% 10,596 11,726 In our endeavor to provide insightful and extensive coverage June 2017- Rafiki Microfinance and its parent company are set Total Assets -16.1% 60,854 72,502 Total Interest Income -10.0% 11,340 12,602 of the financial markets as is our tradition, we will be to be acquired by either largest bank by assets, France’s third- Customer Deposits -9.0% 35,612 39,153 Income from Fees & Commissions -14.9% 1,175 1,381 presenting the data on Micro Finance Banks differently Societe Generale, or Mauritius-based SBM Holdings who Loans & Advances to Customers -15.3% 41,750 49,300 Total Non-Interest Income -28.0% 1,484 2,063 beginning this year and in subsequent publications of the emerged as the frontrunners among the top list of investors Profit / (Loss) before Tax 103.3% 14 (435) Operating Income -10.4% 10,350 11,549 Banking Survey. We have created a separate section in the bidding to acquire Chase Bank and its subsidiary Rafiki Total Interest Income -10.0% 11,340 12,602 Total Income -12.6% 12,825 14,670 survey which will be dedicated to the Micro Finance Banking Microfinance. Total Non-Interest Income -28.0% 1,484 2,063 Expenses - KSh Billions Sector, with MFB Ranking Tables; Analysis of the Sector’s 2017 Operating Income -10.4% 10,350 11,549 Total Interest Expense -20.7% 2,474 3,119 Financial Statements’ Results; 2017 MFB Market Share Results April 2017- Rafiki Microfinance, a subsidiary of Chase Bank Operating Expenses 8,548 9,593 Operating Expenses -10.9% 8,548 9,593 and Analysis; These new sections will augment the MFB which was placed under receivership, reported a KSh 297.6 -10.9% Individual Pages where we present the financial results of million full-year loss attributed to increased provisions for Losses on Loans & Advances -34.8% 440 674 each bank, as well as other information pertaining to each doubtful loans and un-realised interest income from deposits Total Expenses -17.0% 9,960 11,999 institution. In addition, this MFB Section in the survey will locked at its principal shareholder. Rafiki, which is 75 per cent Selected Sector Results at a Glance Profit Before Tax 103.3% 14 (435) contain the CEO interviews and other research articles of owned by Chase Bank, says its earnings were also negatively §. The overall sector performance declined in 2017 with Total Disclosures - KSh Billions interest. impacted by loss of income from significant deposits held at Assets and Customer Deposits decreasing by 16.1% and Loan Loss Provision -21.7% 1,757 2,243 its parent company which the Central Bank of Kenya (CBK) 9.0% respectively. Operating Income decreased by 10.4%, Gross Non - Performing Loans & 2.5% 7,560 7,373 The financial results of the MFB Sector in 2017 recorded a placed under receivership in 2016. while PBT increased by 103.3% Advances general decline in almost all counters, a situation that may §. Sector Losses on Loans & Advances decreased by 34.8% Total Insider Loans -9.2% 1,238 1,363 have been exacerbated by the absence of the results for Rafiki Jan 2018- Kenya Women Holding, the holding company of which is a significant improvement. Loan Loss Provisions Core Capital (Bank) -9.2% 9,138 10,065 Micro – Finance Trust which had not been published by the Kenya’s largest micro-financier in asset terms is set to change also decreased by 21.7% which may be an indication of Quick Assets -26.9% 11,800 16,134 time of publication of this survey. Total Assets are down its name to Echo Network Africa Ltd following an extra better loan recovery efforts in the sector Total Risk Weighted Assets -11.6% 45,187 51,091 16.1% to KSh 61bn in 2017 from KSh 73bn in 2016; Total ordinary general meeting called by the firms’ board of §. Gross NPL have increased by 2.5% to KSh 7.56bn in 2017 is also down from in to directors to deliberate on the issue. from KSh 7.37bn in 2016 Income 12.6% KSh 15bn 2016 KSh 13bn in 2017; Sector PBT has however turned around from an §. Sector Insider Loans have reduced from KSh 1.36bn in 2016 overall loss of KSh 435m in 2016 to a profit of KSh 14m in May 2017- Maisha Microfinance Bank partnered with Airtel to KSh 1.24bn in 2017. This may be as a result of the CBK’s 2017. Money and BlueSky Consultants to launch M-Fanisi – a savings continued tightening of regulation after the events of 2015 and loan mobile money solution that offers registered Airtel and 2016 that saw a number of banks placed under MFB Survey 2018 Money subscribers a better, more affordable way to access receivership cash while receiving the most competitive interest rates for §. 2017 MFB Results & Analysis money saved. §. 2017 MFB Market Share Results & Analysis (5yrs) Overall Sector Growth Results (Selected) §. , a deposit taking microfinance which was 2017 MFB Rankings May 2017- Remu Micro - Finance Banks Assets Deposits Loans Income PBT §. 2017 MFB Tier Aggregates licensed by the Central Bank of Kenya in 2011, is set to change Kenya Women Finance Trust -10.0% -4.6% -11.9% -6.9% -88.6% §. 2017 MFB Individual Pages its name to Key Microfinance Bank following shareholders Faulu Microfinance Bank -7.5% -4.0% -5.6% -4.6% 67.5% proposal. Rafiki Microfinance Trust - - - - - Note: The MFB Market Share Analysis 2013 – 17 and the 2017 SMEP Microfinance Bank 2.8% 10.7% 2.5% -1.1% 17.9% MFB Results Analysis will be posted on our website and are all Caritas 53.0% 97.2% 150.9% 130.8% 196.4% available as separate publications in PDF form. Sumac 41.6% 77.1% 13.5% 15.4% -43.6% Remu DTM Limited -2.3% 28.2% -7.7% -13.1% -49.6% U&I 15.5% -3.1% 19.1% 54.0% 27.0% Uwezo Microfinance Bank -1.2% 1.3% -28.1% -18.8% -448.8% Daraja Microfinance Bank -6.8% 12.4% 20.7% 17.4% -31.3% Maisha Microfinance Bank 77.3% 196.3% 472.2% 268.9% 207.4% Century 33.3% 54.2% 7.6% -22.4% -21.2% Choice -2.1% 6.7% 4.2% 69.1% -10.1% 158 BANKING SURVEY | 2018 BANKING SURVEY | 2018 159 TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB Survey 2018 – 2017 Results and Analysis 2017 TBL MFB Survey 2018 – 2017 Results and Analysis 2017 Five Year Trends 2013 – 2017 (Selected Results) Loans and Advances to Customers Growth in Customer Deposits Balance Sheet Results 2013 – 2017 (Selected) Loans & Advances for the sector have increased by 46.5% The rate of growth of Customer Deposits has been on a TOTAL INCOME (KSH BN) from KSh 28.5bn in 2013 to KSh 41.7bn in 2017 steady decline over the past four years, dropping Total Assets drastically to -0.4% in 2016 from 14% in 2015 and 39.6% Growth in Loans and Advances to Customers in 2014. Deposits growth in 2017 contracted to -9.0% 14 15 TOTAL ASSETS (KSH BN) 12 13 Growth Loans & Advances to Profit & Loss Account Results 2013 – 2017 (Selected) 10 Customers 69.5 72.5 Profit / (Loss) before Tax 60.9 57.1 30.5% PROFIT BEFORE TAX (KSH 27.8% 2013 2014 2015 2016 2017 41.3 MILLIONS) Total Income Total Income for the sector has risen 34.6% from KSh 10bn 3.8% 965 786 in 2013 to the current KSh 13bn in 2017 593 2013 2014 2015 2016 2017 Growth in Total Income 2014 2015 2016 2017 -15.3% Total Assets Growth in Total Income Total Assets have increased by 47.2% from KSh 41.3bn in 14 2013 to KSh 60.9bn in 2017 2013 2014 2015 2016 2017 28.3% Growth in Loans and Advances to Customers Asset Growth -435 The rate of growth in Loans & Advances has also been on a steady decline over the past four years, dropping 15.5% Growth in Total Assets drastically to 3.8% in 2016 from 27.8% in 2015 and 30.5% in 2014. Loans growth in 2017 contracted to -15.3% Profit / (Loss) before Tax Sector PBT has been on an overall decline, from KSh 786m 3.9% 38.0% Customer Deposits in 2013 to the current KSh 14m in 2017 representing an 21.8% overall decrease in profit of 98.2% CUSTOMER DEPOSITS (KSH 2014 2015 2016 2017 4.3% Growth in Profit / (Loss) before Tax -12.6% BN) -16.1% Growth in Profit before 2014 2015 2016 2017 Tax 39.3 39.2 35.6 Growth in Total Income 34.5 24.7 Growth in Total Income has been steadily declining, from Growth in Total Assets 28.3% in 2014 to 15.5% in 2015, 3.9% for 2016 and a The rate of growth in Total Assets has been on a steady 103.25 drastic drop to -12.6% in the current year 2017 decline over the past four years, dropping drastically to % 4.3% in 2016 from 21.8% in 2015 and 38% in 2014. Assets 2013 2014 2015 2016 2017 Interest on Loans and Advances growth in 2017 contracted to -16.1% 22.8% 2014 2015 2016 2017 Customer Deposits -38.6% LOAN INTEREST INCOME Loans and Advances to Customers Total sector Customer Deposits have increased by 44.2% (KSH BN) from KSh 24.7bn in 2013 to KSh 35.6bn in 2017 LOANS & ADVANCES TO -173.5 13 CUSTOMERS (KSH BN) Growth in Customer Deposits % 12 11 10 8 Growth in Customer Deposits Growth in Profit / (Loss) before Tax 47.5 49.3 41.7 39.6% Growth in PBT has also declined over the past four years, 37.2 registering a drastic drop in 2016 to negative growth of - 28.5 14.0% 173.5% from -38.6% for 2015. This is from a positive -0.4% -9.0% growth of 22.8% in 2014. PBT rebounded to positive 2013 2014 2015 2016 2017 growth of 103.25% to KSh 14m in 2017 from an overall 2014 2015 2016 2017 loss of KSh 435m in 2016 Interest on Loans and Advances 2013 2014 2015 2016 2017 Total Income Loan Interest Income for the sector has risen 46.6% from KSh 8bn in 2013 to the current KSh 11bn in 2017 160 BANKING SURVEY | 2018 BANKING SURVEY | 2018 161 TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB Survey 2018 – 2017 Results and Analysis 2017 TBL MFB Survey 2018 – 2017 Results and Analysis 2017 Growth in Loan Interest Income 2.0 Balance Sheet Results (Selected) Growth in Fees and Commission Income 2.10 Top Five MFBs - Total Assets Growth in Loan Interest Growth in Fees and Commission Income has been KSh Billions 2017 2016 2015 2014 2013 Income fluctuating, from a positive 19.9% in 2014, registering a Kenya Women Finance Trust 28,931 32,153 31,861 26,895 21,753 sharp drop to -19.4% in 2015 before rising considerably to Faulu Microfinance Bank 25,325 27,369 25,324 20,319 12,433 2.1% in 2016 and then dropping again to -14.9% in the 30.1% SMEP Microfinance Bank 2,734 2,659 2,592 2,406 2,490 current year 2017 Sumac 1,137 803 634 390 307 19.3% Caritas 879 574 186 69 - Disclosures 2013 – 2017 (Selected) 4.9% KWFT has the highest asset base with KSh 28.9bn in total 2.12 Total Assets Gross Non-Performing Loans assets, followed by Faulu with KSh 25.3bn -10.0% 2014 2015 2016 2017 Total Assets (KSh Bn) GROSS NON-PERFORMING 2.11 Top Five MFBs – Growth in Assets LOANS & ADVANCES (KSH 2017 Tier I Tier II Tier III BN) Maisha Microfinance Bank 77% Caritas 53% Growth in Loan Interest Income 80 Sumac 42% Growth in Loan Interest Income has been steadily declining, 7.4 7.6 Century 33% from 30.1% in 2014 to 19.3% 2015, before registering a 60 sharp drop to 4.9% for 2016 and a drastic contraction of - U&I 15% 10% in the current year 2017 4.3 40 Fees and Commission Income 2.0 2.3 Maisha registered the highest rate of growth in total assets 20 in 2017 at 77%, followed by Caritas which increased its FEES AND COMMISSION asset base by 53% and Sumac came in third with a growth - INCOME (KSH BN) 2013 2014 2015 2016 2017 rate of 42% 2013 2014 2015 2016 2017 1.68 Gross Non-Performing Loans Total Assets 1.40 1.35 1.38 1.18 Gross Non-Performing Loans have risen three-fold, from KSh KSh Billions % 2017 2016 2015 2014 2013 2bn in 2013 to the current KSh 7.6bn in 2017 Tier I -18.8% 54,256 66,849 64,913 53,189 37,867 Tier II 17.7% 4,750 4,036 3,412 2,865 2,797 2013 2014 2015 2016 2017 Growth in Gross Non-Performing Loans Tier III 14.4% 1,848 1,616 1,165 1,015 685 Industry Total -16.1% 60,854 72,502 69,490 57,069 41,349 Growth in Non-Performing Fees and Commission Income Loans and Advances Fees and Commission Income for the sector has reduced The MFB sector recorded a decline in performance, decreasing total assets by 16.1% from KSh 72.5bn in 2016 to KSh 60.9bn in 16% from KSh 1.40bn in 2013 to the current KSh 1.18bn in 81.6% 2017 73.0% 2017. Tier II MFB’s registered the highest increase of 17.7%, followed by Tier III MFB’s which increased their overall assets by 14.4%. Tier 1 MFB’s reduced their assets by 18.8% which can be attributed to the absence of the Rafiki 2017 results. Growth in Fees and Commission Income 2.20 Top Five MFBs - Customer Deposits KSh Billions 2017 2016 2015 2014 2013 14.7% Kenya Women Finance Trust 16,374 17,156 17,806 17,119 12,954 Growth in Fees and 2.5% Commission Income Faulu Microfinance Bank 15,738 16,390 15,466 12,646 8,684 SMEP Microfinance Bank 1,607 1,451 1,287 1,325 1,253 2014 2015 2016 2017 Caritas 564 286 78 - - 19.9% Sumac 413 233 135 128 99 KWFT has the most customer deposits with KSh 16.4bn, followed by Faulu with KSh 15.7bn Growth in Gross Non-Performing Loans Growth in Gross NPL has been on an overall decline over 2.21 Top Five MFBs – Growth in Customer Deposits 2.1% the past four years, rising to a high of 81.6% in 2015 from 2017 Maisha registered the highest rate of growth in customer 14.7% in 2014, before dropping to 73% in 2016 and Maisha Microfinance Bank 196% deposits in 2017 followed by Caritas which and Sumac declining drastically to 2.5% in the current year 2017 2014 2015 2016 2017 -14.9% Caritas 97% -19.4% Sumac 77% Century 54% Remu DTM Limited 28% 162 BANKING SURVEY | 2018 BANKING SURVEY | 2018 163 TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB Survey 2018 – 2017 Results and Analysis 2017 TBL MFB Survey 2018 – 2017 Results and Analysis 2017 3.0 Profit and Loss Account Results (Selected) 2.22 Customer Deposits Customer Deposits 3.10 Top Five MFBs – Profit before Tax Faulu earned the highest profit before tax in 2017 of KSh KSh Billions % 2017 2016 2015 2014 2013 KSh Millions 2017 2016 2015 2014 2013 163m, followed by Caritas with a PBT of KSh 71m and Faulu Microfinance Bank 163 98 183 432 238 Maisha which earned KSh 50m Customer Deposits (KSh Tier I -12.1% 32,112 36,529 37,460 23,049 Bn) 32,639 Caritas 71 (74) (60) (22) - Tier II 31.1% 2,584 1,971 1,499 1,453 1,352 Maisha Microfinance 50 (47) - - - Tier III 40.1% 916 654 348 393 295 Bank Tier I Tier II Tier III Kenya Women Finance Industry 37 324 558 697 571 -9.0% 35,612 39,153 39,307 34,48 24,696 Trust 40 Total 5 U&I 16 12 9 3 2 30 The MFB sector recorded a decline in performance, decreasing customer deposits by 9% from KSh 39.2bn in Top Five MFBs – Growth in Profit before Tax Profit / (Loss) before Tax 20 2016 to KSh 35.6 in 2017. Tier III MFB’s registered the 2017 (KSh Millions) highest increase of 40.1%, followed by Tier II MFB’s which Maisha Microfinance Bank 207% 10 Caritas 196% increased their customer deposits by 31.1%. Tier 1 MFB’s Tier I Tier II Tier III Faulu Microfinance Bank 67% - reduced their deposits by 12.1%, which can be attributed U&I 27% 2013 2014 2015 2016 2017 to the absence of the Rafiki 2017 results. 1,400 SMEP Microfinance Bank 18% 1,200 Maisha registered the highest rate of growth in PBT to KSh 1,000 2.30 Top Five MFBs – Loans and Advances to Customers 2017 50 million in 2017 from a loss of KSh 47 million in 2016, 800 KSh Billions 2017 2016 2015 2014 2013 Maisha Microfinance Bank 472% followed by Caritas which also increased its PBT from a loss Kenya Women Caritas 151% 600 20,178 22,900 22,908 16,235 15,028 of KSh 74 million in 2016 to a profit of KSh 71 million in Finance Trust Daraja Microfinance Bank 21% 2017 400 Faulu Microfinance U&I 19% 17,550 18,586 16,941 14,751 9,000 200 Bank Sumac 13% SMEP Microfinance - 1,901 1,855 2,018 1,855 1,970 Maisha registered the highest rate of growth in loans & Bank advances to customers in 2017 followed by Caritas (200) 2013 2014 2015 2016 2017 Sumac 640 564 480 306 219 (400) Caritas 353 141 11 - - Profit before Tax KWFT remains the biggest lender with KSh 20.2bn in loans & advances to customers, followed by Faulu with KSh Profit before Tax 17.6bn KSh Millions % 2017 2016 2015 2014 2013 Tier I 614.7% 200 (39) 786 1,148 822 2.31 Top Five MFBs – Growth in Loans and Advances to 2.32 Loans and Advances to Customers Tier II 80.6% (39) (202) (51) (135) 12 Customers Loans and Advances to Customers Tier III 24.2% (147) (194) (143) (48) (48) KSh Billions % 2017 2016 2015 2014 2013 Industry Total 103.3% 14 (435) 593 965 786 Tier I -17.5% 37,728 45,748 44,287 34,479 25,934 Tier II 13.1% 2,894 2,560 2,509 2,161 2,189 Loans & Advances to Overall sector PBT rose by 103.3% to KSh 14 million in 2017 from an overall loss of KSh 435 million in 2016. Tier I MFB’s Tier III 13.7% 1,128 992 717 549 377 Customers (KSh Bn) registered the highest increase in Profit before Tax in 2017 to KSh 200 million from a loss of KSh 39 million in 2016. Tier II MFB’s Industry -15.3% 41,750 49,300 47,513 37,189 28,500 reduced their overall loss to KSh 39 million in 2017 from KSh 202 million in 2016. PBT of 5.7%, from KSh 13.7bn in 2016 to KSh Total Tier I Tier II Tier III 14.4bn in 2017. Tier III MFB’s also reduced their overall loss to KSh 147 million in 2017 from KSh 194 million in 2016. 3.20 Top Five MFBs - Total Income 50 The sector as a whole registered a decrease in loans and KSh Millions 2017 2016 2015 2014 2013 40 advances to customers of 15.3% from KSh 49.3bn in 2016 to Kenya Women Finance Trust 7,017 7,536 7,386 6,433 5,814 30 KSh 41.7bn in 2017. Tier III MFB’s recorded an overall Faulu Microfinance Bank 4,595 4,818 4,355 3,882 2,361 increase of 13.7%, followed by Tier II MFB’s with an 20 SMEP Microfinance Bank 563 569 618 653 618 increase of 13.1% in loans & advances. Tier 1 MFB’s Sumac 232 201 136 107 80 10 reduced their loans by 17.5%, which can be attributed to U&I 102 66 42 27 16 - the absence of the Rafiki 2017 results. 2013 2014 2015 2016 2017 KWFT is the highest earner in 2017 with KSh 7bn in total income, followed by Faulu with KSh 4.6bn. 164 BANKING SURVEY | 2018 BANKING SURVEY | 2018 165 TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB Survey 2018 – 2017 Results and Analysis 2017 TBL MFB Survey 2018 – 2017 Results and Analysis 2017 Top Five MFBs – Growth in Total Income Top Five MFBs – Growth in Interest on Loans and Advances Interest on Loans and Advances 2017 2017 Maisha Microfinance Bank 269% Maisha Microfinance Bank 1367% Loan Interest Income Caritas 131% Caritas 384% (KSh Bn) Choice 69% Choice 92% U&I 54% U&I 44% Tier I Tier II Tier III Daraja Microfinance Bank 17% Daraja Microfinance Bank 31% registered the highest rate of growth in to in from in , followed by Maisha Total Income KSh 37 million 2017 KSh 10 million 2016 12 Caritas which also increased its income from KSh 38 million in 2016 to KSh 88 million in 2017 Maisha registered the highest rate of growth in Loan Interest Income to KSh 29 million in 2017 from KSh 2 million 10 Total Income in 2016, followed by Caritas which also increased its 8 income from KSh 7 million in 2016 to KSh 34 million in 6 Total Income (KSh Bn) 2017 4 Tier I Tier II Tier III 2 - 15 2013 2014 2015 2016 2017 10 Interest on Loans and Advances 5 KSh Billions % 2017 2016 2015 2014 2013 - Tier I -11.2% 9,687 10,903 10,121 8,450 6,636 2013 2014 2015 2016 2017 Tier II 10.5% 679 614 598 615 533 Tier III 10.51% 230.7 208.7 153 104 61 Industry Total -9.6% 10,596 11,726 10,872 9,169 7,230 Total Income Overall sector Income dropped by 9.6% to KSh 10.6bn in 2017 from KSh 11.7bn in 2016. Tier III MFB’s registered the highest KSh Millions % 2017 2016 2015 2014 2013 increase in Interest Income in 2017, 10.51% to KSh 230.7 million in 2017 from KSh 208.7 million in 2016 followed by Tier II MFB’s Tier I -14.4% 11,612 13,572 13,132 11,284 8,729 Tier II 9.2% 882 808 765 765 698 which increased income 10.5% to KSh 679 million in 2017 from KSh 614 million in 2016. Tier 1 MFB’s reduced their income by Tier III 14.2% 330 289 222 172 98 11.2%, which can be attributed to the absence of the Rafiki 2017 results. Industry Total -12.6% 12,825 14,670 14,118 12,221 9,525 3.40 Top Five MFBs – Fees and Commission Income Overall sector Income dropped by 12.6% to KSh 12.8bn in 2017 from KSh 14.7bn in 2016. Tier III MFB’s registered the highest KSh Billions 2017 2016 2015 2014 2013 increase in Income in 2017, 14.2% to KSh 330 million in 2017 from KSh 289 million in 2016 followed by Tier II MFB’s which Kenya Women Finance Trust 582 708 697 865 853 increased income 9.2% to KSh 882 million in 2017 from KSh 808 million in 2016. Tier 1 MFB’s reduced their income by 14.4%, Faulu Microfinance Bank 443 480 405 594 376 SMEP Microfinance Bank 76 46 65 81 77 which can be attributed to the absence of the Rafiki 2017 results. Uwezo Microfinance Bank 20 16 9 10 4 Sumac 15 11 13 18 22 3.30 Top Five MFBs – Interest on Loans and Advances KWFT earned the highest interest on loans in 2017 with KSh 582m, followed by Faulu with KSh 443m KSh Billions 2017 2016 2015 2014 2013 Kenya Women Finance Trust 6,121 6,228 6,021 5,092 4,708 Top Five MFBs – Growth in Fees and Commission Income Fees and Commission Income Faulu Microfinance Bank 3,566 3,753 3,227 2,753 1,624 2017 SMEP Microfinance Bank 430 420 478 530 477 Maisha Microfinance Bank 204% Fees and Commission Sumac 214 187 120 84 56 Daraja Microfinance Bank 191% U&I 76 53 31 17 9 Income (KSh Billions) Caritas 175% SMEP Microfinance Bank 64% earned the highest in with , followed by with Tier I Tier II Tier III KWFT interest on loans 2017 KSh 6.1bn Faulu KSh 3.6bn Sumac 35% 2.0 Maisha registered the highest rate of growth in Fees & Commission Income to KSh 3 million in 2017 from KSh 1 1.5 million in 2016, followed by Daraja which also increased its 1.0 income from KSh 1.4 million in 2016 to KSh 4.2 million in 2017 0.5 - 2013 2014 2015 2016 2017 166 BANKING SURVEY | 2018 BANKING SURVEY | 2018 167 TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB Survey 2018 – 2017 Results and Analysis 2017 TBL MFB Survey 2018 – 2017 Results and Analysis 2017 Fees and Commission Income Top Five MFBs – Loan Loss Provisions Return on Average Assets (ROAA) KSh Millions % 2017 2016 2015 2014 2013 2017 Micro - Finance Banks 2017 Tier I -19.5% 1,025 1,273 1,234 1,544 1,281 Choice 531% Tier I Tier II 64.8% 100 60 78 100 99 Maisha Microfinance Bank 517% Kenya Women Finance Trust 0.03% Tier III 7.8% 51 47 41 34 19 Daraja Microfinance Bank 168% Faulu Microfinance Bank 0.16% Industry Total -14.9% 1,175 1,381 1,353 1,678 1,399 Century 36% Rafiki Microfinance Trust - SMEP Microfinance Bank 26% Tier Aggregate 0.08% Choice registered the highest growth in Loan Loss Overall sector Income dropped by 14.9% to KSh 1.2bn in 2017 from KSh 1.4bn in 2016. Tier II MFB’s registered the highest Tier II increase in Fees & Commission Income in 2017, 64.8% to KSh 100 million in 2017 from KSh 60 million in 2016 followed by Tier III Provisions in 2017, followed by Maisha and Daraja SMEP Microfinance Bank -1.11% MFB’s which increased income 7.8% to KSh 51 million in 2017 from KSh 47 million in 2016. Tier 1 MFB’s reduced their income by Caritas 2.44% 19.5%, which can be attributed to the absence of the Rafiki 2017 results. Loan Loss Provisions (Tiers) Sumac 0.26% KSh % 2017 2016 2015 2014 2013 Tier Aggregate -0.22% 4.0 Disclosures (Selected) Gross NPL (Tiers) Billions Tier III 4.10 Top Five MFBs – Gross Non – Performing Loans Tier I -28.2% 1,397 1,945 1,339 719 813 Remu DTM Limited -1.74% and Advances Gross Non-Performing Tier II 19.4% 243 204 312 237 186 U&I 1.05% KSh Billions 2017 2016 2015 2014 2013 Loans & Advances Tier III 24.2% 117 94 88 49 24 Uwezo Microfinance Bank -1.41% Kenya Women Finance Trust 4,073 3,862 2,558 1,032 1,089 Industry (KSh Millions) -21.7% 1,757 2,243 1,739 1,005 1,024 Daraja Microfinance Bank -8.59% Faulu Microfinance Bank 2,849 1,657 612 606 467 Total Maisha Microfinance Bank 5.34% SMEP Microfinance Bank 316 336 326 251 219 Century -6.25% Tier I Tier II Tier III Uwezo Microfinance Bank 91 74 43 32 22 Overall sector Loan Loss Provisions decreased by 21.7% to Choice -11.17% Remu DTM Limited 77 74 73 46 33 KSh 1.76bn in 2017 from KSh 2.24bn in 2016. Tier III MFB’s Tier Aggregate -2.12% KWFT has the highest Gross NPL at KSh 4.1bn followed by 8,000 registered the highest increase in Provisions in 2017, 24.2% Sector Aggregate 0.01% Faulu with KSh 2.9bn 6,000 to KSh 117 million in 2017 from KSh 94 million in 2016 5.20 Return on Average Capital Employed (Tiers) 4,000 followed by Tier II MFB’s which increased 19.4% to KSh 2017 Top Five MFBs – Growth in Gross Non – Performing Loans 243 million in 2017 from KSh 204 million in 2016. Tier 1 Tier I 0.53% and Advances 2,000 MFB’s reduced their provisions by 28.2% Tier II -0.94% 2017 - Tier III -5.39% Maisha Microfinance Bank 1416% 2013 2014 2015 2016 2017 5.0 Performance of the Micro – Finance Banking Sector Sector Aggregate 0.03% U&I 96% 5.10 Return on Average Assets (Tiers) §. The MFB sector recorded an overall ROACE of 0.03%. Tier Faulu Microfinance Bank 72% 2017 1 MFB’s are the only ones that recorded a positive rate of Choice 60% Gross NPL (Tiers) Tier I 0.08% return in 2017 of 0.53%. Tier II and III MFB’s both Daraja Microfinance Bank 59% KSh Billions % 2017 2016 2015 2014 2013 Tier II -0.22% registered negative ROACE of -0.94% and -5.39% Tier I 2.0% 6,922 6,788 3,684 1,945 1,743 Tier III -2.12% respectively in 2017 Tier II -3.4% 356 368 404 297 240 Sector Aggregate 0.01% Maisha registered the highest growth in Gross NPL in 2017, Tier III 30.2% 282 217 174 106 65 Industry Total 2.5% 7,560 7,373 4,262 2,347 2,047 §. The MFB sector recorded an overall ROAA of 0.01%. Top Five MFBs–Return on Average Capital Employed (ROACE) followed by U&I and Faulu Tier 1 MFB’s are the only ones that recorded a positive Bank 2017 in 2017 from KSh 217 million in 2016 followed by Tier I rate of return in 2017 of 0.08%. Tier II and III MFB’s Maisha Microfinance Bank 16.23% Overall sector rose by to in which increased to in from Gross NPL 2.5% KSh 7.56bn MFB’s 2% KSh 6.92bn 2017 KSh both registered negative ROAA of -0.22% and -2.12% Caritas 6.51% 2017 from KSh 7.37bn in 2016. Tier III MFB’s registered the 6.79bn in 2016. Tier 1I MFB’s reduced their Gross NPL by respectively in 2017 U&I 2.83% highest increase in NPL in 2017, 30.2% to KSh 282 million 3.4% Top Five MFBs – Return on Average Assets (ROAA) Sumac 1.01% Bank 2017 Faulu Microfinance Bank 0.93% 4.20 Top Five MFBs – Loan Loss Provisions Maisha Microfinance Bank 5.34% Maisha had the highest ROACE in 2017 of 16.23% followed KSh Billions 2017 2016 2015 2014 2013 Caritas 2.44% by Caritas with an ROACE of 6.51% and U&I which registered an ROACE of 2.83% Kenya Women Finance Trust 804 712 813 381 498 U&I 1.05% Faulu Microfinance Bank 592 632 358 263 276 Sumac 0.26% Return on Average Capital Employed (ROACE) SMEP Microfinance Bank 224 178 290 221 171 Faulu Microfinance Bank 0.16% Micro - Finance Banks 2017 Century 38 28 47 16 5 Maisha had the highest ROAA in 2017 of 5.34% followed Tier 1 Remu DTM Limited 34 28 29 18 9 by Caritas with an ROAA of 2.44% and U&I which KWFT has the highest Loan Loss Provision at KSh 804m followed by Faulu with KSh 592m registered an ROAA of 1.05% Kenya Women Finance Trust 0.20% Faulu Microfinance Bank 0.93% Rafiki Microfinance Trust 0.00% Tier Aggregate 0.53% 168 BANKING SURVEY | 2018 BANKING SURVEY | 2018 169 TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB Survey 2018 – 2017 Results and Analysis 2017 TBL MFB Survey 2018 – 2017 Results and Analysis 2017 Tier II 5.40 Loan Loss Provision / Gross Non-Performing Loans 6.0 Tables – Micro Finance Banking Sector Results 31st December 2017 (Selected) SMEP Microfinance Bank -5.81% & Advances Micro - Finance 6.10 Total Assets Caritas 6.51% % 2017 2016 2015 2014 2013 Sumac 1.01% Banks KSh Millions % 2017 2016 2015 2014 2013 Tier I -29.6% 20.2% 28.7% 36.3% 36.9% 46.7% Tier 1 Tier Aggregate -0.94% Tier III Tier II 23.6% 68.4% 55.3% 77.2% 80.0% 77.7% Kenya Women Finance Trust -10.0% 28,931 32,153 31,861 26,895 21,753 41.5% 43.5% 50.4% 46.8% 37.5% Remu DTM Limited -3.54% Tier III -4.6% Faulu Microfinance Bank -7.5% 25,325 27,369 25,324 20,319 12,433 Sector Rafiki Microfinance Trust - - 7,327 7,729 5,975 3,682 U&I 2.83% -23.6% 23.2% 30.4% 40.8% 42.8% 50.0% Aggregate Uwezo Microfinance Bank -1.73% Tier Aggregate -18.8% 54,256 66,849 64,913 53,189 37,867 The overall MFB sector proportion of loan loss provision to Tier II Daraja Microfinance Bank -22.19% Maisha Microfinance Bank 16.23% gross NPL decreased by 23.6% to 23.2% in 2017 compared SMEP Microfinance Bank 2.8% 2,734 2,659 2,592 2,406 2,490 Century -101.61% to 30.4% in 2016. Tier 1 MFB’s recorded the highest Caritas 53.0% 879 574 186 69 - Choice -40.31% reduction of -29.6% followed by the Tier 111 MFB’s which Sumac 41.6% 1,137 803 634 390 307 Tier Aggregate -5.39% recorded a drop of -4.6%. Tier 11 MFB’s increased their Tier Aggregate 17.7% 4,750 4,036 3,412 2,865 2,797 Tier III Sector Aggregate 0.03% percentage by 23.6% from 55.3% in 2016 to 68.4% in 2017 Remu DTM Limited -2.3% 354 362 397 394 336 U&I 15.5% 406 351 184 137 80 5.30 Loan Interest Income / Total Income 5.41 Gross Non-Performing Loans & Advances / Total Uwezo Microfinance Bank -1.2% 212 214 226 160 106 Micro - Finance Loans and Advances to Customers % 2017 2016 2015 2014 2013 Daraja Microfinance Bank -6.8% 168 180 83 92 - Banks Micro - Finance % 2017 2016 2015 2014 2013 Maisha Microfinance Bank 77.3% 302 171 - - - Tier I 3.8% 83.4% 80.3% 77.1% 74.9% 76.0% Banks Century 33.3% 288 216 197 231 163 Tier II 1.2% 76.9% 76.0% 78.2% 80.3% 76.3% Tier I 23.7% 18.3% 14.8% 8.3% 5.6% 6.7% Choice -2.1% 119 122 77 - - Tier III -3.3% 69.8% 72.1% 68.9% 60.6% 62.7% Tier II -14.6% 12.3% 14.4% 16.1% 13.7% 11.0% Tier Aggregate 14.4% 1,848 1,616 1,165 1,015 685 Sector Tier III 14.5% 25.0% 21.9% 24.3% 19.2% 17.1% 3.4% 82.6% 79.9% 77.0% 75.0% 75.9% Aggregate Sector 21.1% 18.1% 15.0% 9.0% 6.3% 7.2% The overall MFB sector proportion of loan interest income Aggregate Sector Aggregate -16.1% 60,854 72,502 69,490 57,069 41,349 to total income increased by 3.4% to 82.6% in 2017 6.11 Customer Deposits compared to 79.9% in 2016. Tier 1 MFB’s recorded the The overall MFB sector proportion of gross NPL to total KSh Millions % 2017 2016 2015 2014 2013 highest rise of 3.8% followed by the Tier 11 MFB’s which loans & advances increased by 21.1% to 18.1% in 2017 Tier 1 recorded an increase of 1.2%. Tier 111 MFB’s reduced their compared to 15% in 2016. Tier 11 MFB’s recorded a Kenya Women Finance Trust -4.6% 16,374 17,156 17,806 17,119 12,954 percentage by 3.3% from 72.1% in 2016 to 69.8% in 2017 reduction of -14.6% to 12.3% in 2017 from 14.4% in 2016. Faulu Microfinance Bank -4.0% 15,738 16,390 15,466 12,646 8,684 Tier 1 and 11 MFB’s registered increases of 23.7% and Rafiki Microfinance Trust - - 2,982 4,188 2,873 1,412 5.31 Fees and Commission Income / Total Income 14.5% respectively. Tier Aggregate -12.1% 32,112 36,529 37,460 32,639 23,049 Micro - Finance Tier II % 2017 2016 2015 2014 2013 Banks 5.42 Insider Loans / Core Capital (Bank) SMEP Microfinance Bank 10.7% 1,607 1,451 1,287 1,325 1,253 Tier I -21.5% 10.8% 13.7% 14.5% 17.6% 18.8% Micro - Caritas 97.2% 564 286 78 - - % 2017 2016 2015 2014 2013 Tier II -6.0% 16.9% 17.9% 19.6% 16.1% 17.1% Finance Banks Sumac 77.1% 413 233 135 128 99 Tier III 28.4% 26.3% 20.5% 20.6% 24.5% 23.8% Tier I -3.2% 13.7% 14.2% 13.2% 12.2% 10.7% Tier Aggregate 31.1% 2,584 1,971 1,499 1,453 1,352 Sector -17.7% 11.6% 14.1% 14.9% 17.6% 18.8% Tier II 12.3% 14.4% 12.9% 9.6% 18.3% 37.2% Tier III Aggregate Tier III 81.4% 9.4% 5.2% 7.3% 7.4% 7.5% Remu DTM Limited 28.2% 113 88 144 166 174 Sector 0.05% 13.55% 13.54% 12.6% 12.4% 14.9% U&I -3.1% 198 205 48 36 34 Aggregate Uwezo Microfinance Bank 1.3% 29 29 42 64 32 The overall MFB sector proportion of fees & commission Daraja Microfinance Bank 12.4% 95 85 - - - income to total income decreased by 17.7% to 11.6% in The overall MFB sector proportion of insider loans to core Maisha Microfinance Bank 196.3% 231 78 - - - 2017 compared to 14.1% in 2016. Tier 1 MFB’s recorded capital increased by 0.05% to 13.55% in 2017 compared to Century 54.2% 222 144 99 127 55 the highest reduction of -21.5% followed by the Tier 11 13.54% in 2016. Tier 1 MFB’s recorded a reduction of -3.2% Choice 6.7% 27 26 15 - - MFB’s which recorded a drop of -6%. Tier 111 MFB’s to 13.7% in 2017 from 14.2% in 2016. Tier 1 and 11 MFB’s Tier Aggregate 40.1% 916 654 348 393 295 increased their percentage by 28.4% from 20.5% in 2016 registered increases of 23.7% and 14.5% respectively. to 26.3% in 2017 Sector Aggregate -9.0% 35,612 39,153 39,307 34,485 24,696 6.12 Loans and Advances to Customers 170 BANKING SURVEY | 2018 BANKING SURVEY | 2018 171 TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB Survey 2018 – 2017 Results and Analysis 2017 TBL MFB Survey 2018 – 2017 Results and Analysis 2017 KSh Millions % 2017 2016 2015 2014 2013 6.21 Total Income Tier 1 KSh Millions % 2017 2016 2015 2014 2013 Kenya Women Finance Trust -11.9% 20,178 22,900 22,908 16,235 15,028 Tier 1 Faulu Microfinance Bank -5.6% 17,550 18,586 16,941 14,751 9,000 Kenya Women Finance Trust -6.9% 7,017 7,536 7,386 6,433 5,814 Rafiki Microfinance Trust - - 4,262 4,438 3,494 1,906 Faulu Microfinance Bank -4.6% 4,595 4,818 4,355 3,882 2,361 Tier Aggregate -17.5% 37,728 45,748 44,287 34,479 25,934 Rafiki Microfinance Trust - - 1,218 1,390 970 554 Tier II Tier Aggregate -14.4% 11,612 13,572 13,132 11,284 8,729 SMEP Microfinance Bank 2.48% 1,901 1,855 2,018 1,855 1,970 Tier II Caritas 150.9% 353 141 11 - - SMEP Microfinance Bank -1.1% 563 569 618 653 618 Sumac 13.5% 640 564 480 306 219 Caritas 130.8% 88 38 10 5 - Tier Aggregate 13.1% 2,894 2,560 2,509 2,161 2,189 Sumac 15.4% 232 201 136 107 80 Tier III Tier Aggregate 9.2% 882 808 765 765 698 Remu DTM Limited -7.7% 252 273 285 202 170 Tier III U&I 19.1% 331 278 147 88 39 Remu DTM Limited -13.1% 69 80 76 68 46 Uwezo Microfinance Bank -28.1% 136 189 104 137 81 U&I 54.0% 102 66 42 27 16 Daraja Microfinance Bank 20.7% 69 57 36 - - Uwezo Microfinance Bank -18.8% 46 56 50 37 23 Maisha Microfinance Bank 472.2% 162 28 - - - Daraja Microfinance Bank 17.4% 20 17 8 8 - Century 7.6% 141 131 126 123 87 Maisha Microfinance Bank 268.9% 37 10 - - - Choice 4.2% 37 36 19 - - Century -22.4% 38 49 43 32 13 Tier Aggregate 13.7% 1,128 992 717 549 377 Choice 69.1% 19 11 3 - - Tier Aggregate 14.2% 330 289 222 172 98 Sector Aggregate -15.3% 41,750 49,300 47,513 37,189 28,500 Sector Aggregate -12.6% 12,825 14,670 14,118 12,221 9,525 6.20 Profit before Tax KSh Millions % 2017 2016 2015 2014 2013 Tier 1 6.22 Loan Interest Income Kenya Women Finance Trust -88.6% 37 324 558 697 571 KSh Millions % 2017 2016 2015 2014 2013 Faulu Microfinance Bank 163 98 183 432 238 Tier 1 67.5% Rafiki Microfinance Trust - - (461) 46 19 14 Kenya Women Finance Trust -1.7% 6,121 6,228 6,021 5,092 4,708 Tier Aggregate 614.7% 200 (39) 786 1,148 822 Faulu Microfinance Bank -5.0% 3,566 3,753 3,227 2,753 1,624 Tier II Rafiki Microfinance Trust - - 922 874 605 304 SMEP Microfinance Bank 17.9% (120) (146) (4) (117) 27 Tier Aggregate -11.2% 9,687 10,903 10,121 8,450 6,636 Caritas 71 (74) (60) (22) - Tier II 196.4% Sumac -43.6% 10 18 13 4 (16) SMEP Microfinance Bank 2.3% 430 420 478 530 477 Tier Aggregate 80.6% (39) (202) (51) (135) 12 Caritas 384% 34 7 - - - Tier III Sumac 14.5% 214 187 120 84 56 Remu DTM Limited -49.6% (25) (17) (21) 2 (7) Tier Aggregate 10.5% 679 614 598 615 533 U&I 16 12 9 3 2 Tier III 27.0% Uwezo Microfinance Bank -448.8% (12) 3 2 2 (4) Remu DTM Limited -15.3% 51 61 51 42 27 Daraja Microfinance Bank -31.3% (60) (45) (35) (16) - U&I 43.9% 76 53 31 17 9 Maisha Microfinance Bank 207.4% 50 (47) - - - Uwezo Microfinance Bank -36.9% 25 40 40 25 19 Century -21.2% (63) (52) (58) (39) (39) Daraja Microfinance Bank 31.0% 13 10 2 - - Choice -10.1% (54) (49) (40) - - Maisha Microfinance Bank 1367.0% 29 2 - - - Tier Aggregate 24.2% (147) (194) (143) (48) (48) Century -38.9% 22 36 26 20 7 Choice 92.0% 13 7 1 - - Sector Aggregate 103.3% 14 (435) 593 965 786 Tier Aggregate 10.5% 231 209 153 104 61 Sector Aggregate -9.6% 10,596 11,726 10,872 9,169 7,230 172 BANKING SURVEY | 2018 BANKING SURVEY | 2018 173 TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB Survey 2018 – 2017 Results and Analysis 2017 TBL MFB Survey 2018 – 2017 Results and Analysis 2017 6.23 Fees and Commission Income 6.31 Loan Loss Provisions KSh Millions % 2017 2016 2015 2014 2013 KSh Millions % 2017 2016 2015 2014 2013 Tier 1 Tier 1 Kenya Women Finance Trust -17.8% 582 708 697 865 853 Kenya Women Finance Trust 13.0% 804 712 813 381 498 Faulu Microfinance Bank -7.7% 443 480 405 594 376 Faulu Microfinance Bank -6.3% 592 632 358 263 276 Rafiki Microfinance Trust - - 86 132 86 52 Rafiki Microfinance Trust - - 601 168 76 40 Tier Aggregate -19.5% 1,025 1,273 1,234 1,544 1,281 Tier Aggregate -28.2% 1,397 1,945 1,339 719 813 Tier II Tier II SMEP Microfinance Bank 63.8% 76 46 65 81 77 SMEP Microfinance Bank 26.2% 224 178 290 221 171 Caritas 174.8% 9 3 - - - Caritas - 2 - - - - Sumac 35.2% 15 11 13 18 22 Sumac -36.3% 16.5 26 22 17 15 Tier Aggregate 64.8% 100 60 78 100 99 Tier Aggregate 19.4% 243 204 312 237 186 Tier III Tier III Remu DTM Limited -12.1% 7.13 8.11 12.20 8.00 7.50 Remu DTM Limited 19.9% 34 28 29 18 9 U&I 3.0% 12.32 11.96 9.10 7.80 4.40 U&I -5.1% 6.1 6.4 5 5 3 Uwezo Microfinance Bank 28.4% 20.10 15.66 8.80 9.70 3.60 Uwezo Microfinance Bank -55.0% 11 24 7 11 8 Daraja Microfinance Bank 190.9% 4.16 1.43 0.60 - - Daraja Microfinance Bank 167.7% 16.1 6 - - - Maisha Microfinance Bank 204.0% 3.04 1.00 - - - Maisha Microfinance Bank 517.0% 6 1 - - - Century -51.6% 3.00 6.20 9.00 8.30 3.60 Century 35.7% 38 28 47 16 5 Choice -56.3% 1.31 3.00 1.00 - - Choice 531.0% 6 1 - - - Tier Aggregate 7.8% 51 47 41 34 19 Tier Aggregate 24.2% 117 94 88 49 24 Sector Aggregate -14.9% 1,175 1,381 1,353 1,678 1,399 Sector Aggregate -21.7% 1,757 2,243 1,739 1,005 1,024 6.30 Gross Non – Performing Loans and Advances 6.32 Total Insider Loans KSh Millions % 2017 2016 2015 2014 2013 KSh Millions % 2017 2016 2015 2014 2013 Tier 1 Tier 1 Kenya Women Finance Trust 5.5% 4,073 3,862 2,558 1,032 1,089 Kenya Women Finance Trust 1.2% 739 730 756 764 270 Faulu Microfinance Bank 71.9% 2,849 1,657 612 606 467 Faulu Microfinance Bank -27.7% 348 481 421 263 115 Rafiki Microfinance Trust - - 1,269 514 307 187 Rafiki Microfinance Trust - - 15 8 14 2 Tier Aggregate 2.0% 6,922 6,788 3,684 1,945 1,743 Tier Aggregate -11.4% 1,087 1,226 1,185 1,042 386 Tier II Tier II SMEP Microfinance Bank -5.9% 316 336 326 251 219 SMEP Microfinance Bank 3.5% 70 68 58 113 279 Caritas - 20 - - - - Caritas -25.1% 21 27 1 - - Sumac -38.1% 20 33 78 46 21 Sumac 41.2% 17 12 14 12 14 Tier Aggregate -3.4% 356 368 404 297 240 Tier Aggregate 0.4% 107 107 73 125 292 Tier III Tier III Remu DTM Limited 3.9% 77 74 73 46 33 Remu DTM Limited 10.3% 12 11 14 18 13 U&I 96.2% 27 14 11 7 3 U&I 76.3% 13 7 19 15 9 Uwezo Microfinance Bank 23.5% 91 74 43 32 22 Uwezo Microfinance Bank 172.3% 4 2 4 4 2 Daraja Microfinance Bank 58.9% 11 7 - - - Daraja Microfinance Bank 3.6% 2 2 2 - - Maisha Microfinance Bank 1416.2% 16 1 - - - Maisha Microfinance Bank 108.4% 3 2 - - - Century 25.0% 55 44 47 20 6 Century 33.3% 4 3 6 3 2 Choice 60.3% 6 4 0 - - Choice 51.0% 5 3 2 - - Tier Aggregate 30.2% 282 217 174 106 65 Tier Aggregate 46.4% 44 30 47 40 25 Sector Aggregate 2.5% 7,560 7,373 4,262 2,347 2,047 Sector Aggregate -9.2% 1,238 1,363 1,305 1,206 703 174 BANKING SURVEY | 2018 BANKING SURVEY | 2018 175 TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB Survey 2018 – 2017 Results and Analysis 2017 TBL MFB Survey 2018 – 2017 Results and Analysis 2017 6.33 Core Capital (Bank) 6.35 Risk Weighted Assets KSh Millions % 2017 2016 2015 2014 2013 KSh Millions % 2017 2016 2015 2014 2013 Tier 1 Tier 1 Kenya Women Finance Trust -0.7% 4,257 4,287 4,375 4,362 2,696 Kenya Women Finance Trust -9.6% 20,296 22,459 23,424 21,079 17,759 Faulu Microfinance Bank 0.4% 3,674 3,659 3,617 3,240 453 Faulu Microfinance Bank 1.7% 20,085 19,742 18,453 15,527 8,541 Rafiki Microfinance Trust - - 714 961 943 466 Rafiki Microfinance Trust - - 4,869 5,243 4,591 2,527 Tier Aggregate -8.4% 7,931 8,660 8,952 8,545 3,615 Tier Aggregate -14.2% 40,381 47,070 47,120 41,197 28,827 Tier II Tier II SMEP Microfinance Bank -29.3% 231 326 467 496 610 SMEP Microfinance Bank 6.8% 1,893 1,773 1,742 1,480 1,570 Caritas 0.8% 273 271 88 - - Caritas 83.5% 530 289 75 - - Sumac 2.6% 240 233 204 185 176 Sumac 22.8% 913 743 583 365 287 Tier Aggregate -10.5% 743 831 760 681 786 Tier Aggregate 18.9% 3,336 2,805 2,399 1,846 1,857 Tier III Tier III Remu DTM Limited -15.6% 132 157 188 204 133 Remu DTM Limited -4.1% 297 310 325 259 220 U&I 39.1% 160 115 107 83 45 U&I 56.1% 318 203 134 57 15 Uwezo Microfinance Bank -8.4% 164 179 177 79 62 Uwezo Microfinance Bank -9.9% 179 199 141 144 94 Daraja Microfinance Bank -86.4% 7 48 67 91 - Daraja Microfinance Bank 6.3% 104 98 63 36 - Maisha Microfinance Bank -51.7% 43 89 - - - Maisha Microfinance Bank 115.7% 231 107 - - - Century -17.9% (33) (28) 52 76 90 Century 10.4% 222 201 189 202 150 Choice -156.1% (8) 15 50 - - Choice 21.1% 119 98 65 - - Tier Aggregate -19.3% 464 574 640 533 330 Tier Aggregate 20.8% 1,470 1,217 917 698 478 Sector Aggregate -9.2% 9,138 10,065 10,352 9,759 4,731 Sector Aggregate -11.6% 45,187 51,091 50,436 43,741 31,162 6.34 Quick Assets 6.36 Shareholder’s Funds (Net Assets) KSh Millions % 2017 2016 2015 2014 2013 KSh Billions % 2017 2016 2015 2014 2013 Tier 1 Tier 1 Kenya Women Finance Trust -9.9% 5,681 6,307 6,248 4,965 4,546 Kenya Women Finance Trust -1.0% 4,707 4,756 4,692 4,606 2,897 Faulu Microfinance Bank -17.3% 4,687 5,670 5,753 3,621 2,204 Faulu Microfinance Bank 3.3% 4,485 4,342 4,299 3,787 797 Rafiki Microfinance Trust - - 2,967 2,773 1,526 1,177 Rafiki Microfinance Trust - - 745 1,043 1,013 493 Tier Aggregate -30.6% 10,369 14,943 14,775 10,112 7,927 Tier Aggregate -6.6% 9,192 9,843 10,034 9,406 4,187 Tier II Tier II SMEP Microfinance Bank -3.8% 450 468 352 387 360 SMEP Microfinance Bank -5.9% 501 533 645 571 652 Caritas 21.8% 426 350 130 57 - Caritas 0.8% 273 271 88 68 - Sumac 256.3% 234 66 60 31 24 Sumac 1.9% 251 246 207 188 182 Tier Aggregate 25.6% 1,110 883 542 474 384 Tier Aggregate -2.3% 1,026 1,050 940 827 834 Tier III Tier III Remu DTM Limited 6.6% 68 64 88 168 144 Remu DTM Limited -8.9% 167 184 195 208 133 U&I -26.8% 41 56 28 41 34 U&I 36.7% 162 118 107 83 45 Uwezo Microfinance Bank 241.6% 46 13 97 10 10 Uwezo Microfinance Bank -5.3% 169 179 180 82 67 Daraja Microfinance Bank -61.2% 23 60 6 64 - Daraja Microfinance Bank -36.0% 52 82 67 91 - Maisha Microfinance Bank -26.8% 57 78 - - - Maisha Microfinance Bank -25.2% 67 89 - - - Century 666.7% 69 9 31 35 16 Century -27.8% 13 18 53 76 90 Choice -33.0% 19 29 14 - - Choice -54.5% 21 46 57 - - Tier Aggregate 4.8% 322 307 264 318 203 Tier Aggregate -9.0% 651 715 658 541 335 Sector Aggregate -26.9% 11,800 16,134 15,581 10,903 8,514 Sector Aggregate -6.4% 10,868 11,608 11,633 10,774 5,356 176 BANKING SURVEY | 2018 BANKING SURVEY | 2018 177 TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS Non Perfoming Loans Provisions to Operating Income Liquidity Ratio TOTAL ASSETS in Ksh millions Return on Equity 2017 2016 2015 2014 2013 2012 2011 2017 2016 2015 2014 2013 2012 2011 2017 2016 2015 2014 2013 2012 2011 2017 2016 2015 2014 2013 2012 2011 UWEZO 7% 13% 11% 1% -0.4% 21% 22% REMU 60% 72% 61% 101% 67% 80% 298% KWFT 28,931 32,153 31,861 26,895 21,753 20,377 17,036 FAULU 4% 2% 4% 11% 30% 16% 0% KWFT 2% 2% 4% 4% 2% 1% -5% U & I 21% 27% 57% 113% 63% 226% - FAULU 25,325 27,369 25,324 20,319 12,433 7,638 5,141 KWFT 1% 7% 12% 15% 20% 11% 13% REMU 8% 9% 10% 2% 2% 8% 14% RAFIKI - 99% 66% 53% 42% 117% 160% RAFIKI - 7,327 7,729 5,975 3,682 1,837 441 U & I 10% 11% 9% 4% 5% 1% - FAULU 5% 4% 4% 3% 3% 2% 2% KWFT 35% 37% 35% 29% 27% 40% 39% SMEP 2,734 2,659 2,592 2,406 2,490 2,284 1,998 SMEP -24% -27% -1% -20% 4% 13% 13% RAFIKI - 20% 6% 4% 4% 5% 0% SMEP 28% 32% 27% 29% 26% 28% 24% REMU 354 362 397 394 336 197 124 RAFIKI - -62% 4% 2% 3% 5% -16% U & I 2% 2% 8% 8% 4% 17% UWEZO 157% 46% 232% 16% 25% 52% 48% SUMAC 1,137 803 634 390 307 - - REMU -15% -9% -11% 1% -6% -12% -13% SMEP 5% 8% 1% 16% 6% 5% 11% CENTURY 31% 6% 31% 28% 24% - - CENTURY 288 216 197 231 163 - - UWEZO -7% 2% 1% 2% -6% -4% -21% SUMAC 2% 6% 4% 6% 15% - - FAULU 30% 35% 37% 29% 23% 24% 21% UWEZO 212 214 226 160 106 78 59 SUMAC 4% 7% 6% 2% -9% - - CENTURY 8% 12% 51% 24% 21% - - SUMAC 57% 28% 45% 24% 21% - - U & I 406 351 184 137 80 54 - CENTURY -482% 292% -109% -51% -43% - - DARAJA 20% 13% 0% DARAJA 24% 70% - DARAJA 168 180 83 92 DARAJA -114% -55% -51% -18% CHOICE 21% 11% 2% CHOICE 70% 111% 95% CHOICE 119 122 77 0 CHOICE -258% -108% -71% 0% CARITAS 6% 0% 0% CARITAS 75.63% 122.41% 167.01% CARITAS 879 574 186 69 CARITAS -26% -27% -68% - MAISHA 10% 4% MAISHA 24.61% 99.63% MAISHA 302 171 MAISHA -76% -53% TOTAL 3% 5% 4% 4% 2.6% 1.7% 2.4% TOTAL 33% 41% 40% 32% 36% 37% 56% TOTAL 60,854 72,502 69,490 57,069 41,349 32,409 24,798 TOTAL -2.1% -2.9% 5.5% 9.0% 14.7% 11.0% 8.1% Total Non Perfoming Loans to Total Advances Ranking Institution Total Assets PROFIT Before Tax in Ksh millions Average Cost of Funds 2017 2016 2015 2014 2013 2012 2011 2017 2016 2017 2016 Change 2017 2016 2015 2014 2013 2012 2011 2017 2016 2015 2014 2013 2012 2011 FAULU 17% 9% 4% 4% 5% 5% 5% 1 1 KWFT 28,931 32,153 -10.02% KWFT 37 324 558 697 570 246 256 U & I 8% 5% 3% 1% 0.0% 0.0% CENTURY 54% 43% 59% 19% 7% - - 2 2 FAULU 25,325 27,369 -7.47% FAULU 163 98 183 432 238 97 1 SMEP 3% 4% 2% 3% 0.9% 0.2% 0.1% KWFT 21% 17% 12% 7% 7% 6% 7% 3 4 SMEP 2,734 2,659 2.82% SMEP -120 -146 -4 -117 27 83 33 SUMAC 7% 8% 16% 11% 2% U & I 8% 5% 7% 8% 9% 15% - 4 5 SUMAC 1,137 803 41.57% RAFIKI 0 -461 46 19 14 7 -22 KWFT 4% 4% 4% 3% 3% 3% 8% RAFIKI - 35% 12% 9% 10% 15% 0% 5 6 CARITAS 879 574 53.00% U & I 16 12 9 3 2 1 - RAFIKI - 9% 5% 4% 3% 3% 1% SUMAC 3% 6% 17% 16% 11% - - 6 8 U & I 406 351 15.47% UWEZO -12 3 2 2 -4 -2 -10 FAULU 8% 9% 9% 8% 4% 3% 1% SMEP 19% 20% 19% 15% 12% 19% 10% 7 7 REMU 354 362 -2.31% REMU -25 -17 -21 2 -7 -12 -13 UWEZO 4% 2% 9% 5% 5% 6% 0% REMU 35% 30% 29% 25% 21% 14% 7% 8 12 MAISHA 302 171 77.31% SUMAC 10 18 13 4 -16 - - REMU 5% 10% 9% 7% 6% 3% 0% UWEZO 72% 44% 45% 26% 30% 21% 9% 9 9 CENTURY 288 216 33.19% CENTURY -63 52 -58 -39 -39 - - CENTURY 8% 6% 8% 9% 7% DARAJA 20% 13% 0% - 10 10 UWEZO 212 214 -1.21% DARAJA -60 -45 -34 -16 DARAJA 9% 5% 0% CHOICE 21% 11% 2% 0% 11 11 DARAJA 168 180 -6.79% CHOICE -54 -50 -40 0 CHOICE 19% 9% 0% 0% CARITAS 5.28% 4.69% 1.08% 0.00% 12 13 CHOICE 119 122 -2.10% CARITAS -71 -74 -60 -22 CARITAS 3% 3% 1% MAISHA 20.93% 10.00% MAISHA -50 -47 MAISHA 5% 3% TOTAL 18.4% 9.1% 5.1% 5.7% 5.3% 5.5% 0.0% * 3 RAFIKI - 7,327 * TOTAL -229 -332 593 965 786 420 245 TOTAL 5.7% 6.3% 5.7% 4.9% 3.2% 2.9% 5.8% Total 60,854 72,502 -16.07% * did not publish 2017 financial statements Core Capital to Total Deposit Liabilities Return on Assets Efficiency Ratio 2017 2016 2015 2014 2013 2012 2011 Ranking Institution Profit Before Tax 2017 2016 2015 2014 2013 2012 2011 2017 2016 2014 2013 2012 2011 UWEZO 562% 621% 424% 124% 258% 283% 588% 2017 2016 2017 2016 Change U & I 4% 4% 5% 2% 3% 1% - FAULU 53% 53% 57% 57% 65% 71% 81% SUMAC 58% 100% 151% 145% 178% - - 1 2 FAULU 163 98 67.49% KWFT 0% 1% 2% 3% 3% 1% 2% KWFT 75% 70% 70% 72% 70% 70% 91% CENTURY -15% -20% 53% 60% 165% - - 2 1 KWFT 37 324 -88.57% FAULU 1% 0% 1% 2% 2% 1% 0% RAFIKI - 100% 72% 75% 74% 70% 200% U & I 81% 56% 221% 229% 133% 459% 3 5 U & I 16 12 27.05% SMEP -4% -6% -0% -5% 1% 4% 2% SMEP 97% 103% 88% 103% 82% 71% 77% REMU 117% 177% 131% 122% 76% 169% 714% 4 4 SUMAC 10 18 -43.56% RAFIKI - -6% 1% 0% 0% 0.4% -5% U & I 60% 59% 68% 85% 86% 96% - SMEP 14% 22% 36% 37% 49% 59% 31% 5 6 UWEZO (12) 3 -448.84% REMU -7% -5% -5% 1% -2% -6% -10% REMU 115% 98% 109% 79% 96% 138% 200% RAFIKI - 24% 23% 33% 33% 25% 136% 6 7 REMU (25) (17) -49.58% UWEZO -6% 2% 1% 1% -4% -3% -17% SUMAC 53% 57% 61% 70% 101% - - KWFT 26% 25% 25% 25% 21% 86% 26% 7 9 MAISHA (50) (47) -7.43% SUMAC 1% 2% 2% 1% -0 - - UWEZO 123% 93% 89% 85% 109% 104% 200% FAULU 23% 22% 23% 26% 5% 13% 21% CENTURY -22% 24% -29% -17% -0 - - CENTURY 214% 182% 217% 192% 366% - - DARAJA 7% 57% - - 8 10 CHOICE (54) (50) -8.82% DARAJA -36% -25% -41% -18% DARAJA 353% 339% 518% 294% CHOICE -31% 58% 328% 0% 9 8 DARAJA (60) (45) -31.34% CHOICE -45% -41% -52% 0% CHOICE 337% 544% 1417% 0% CARITAS 49% 95% 114% 10 3 CENTURY (63) 52 -222.37% CARITAS -8% -13% -32% -31% CARITAS 160.85% 267.58% 675.85% 591.11% MAISHA 19% 114% 11 11 CARITAS (71) (74) 3.58% MAISHA -17% -28% MAISHA 203.33% 540.65% TOTAL 28% 26% 25% 14% 14% 40% 0% 12 12 SMEP (120) (146) 17.93% TOTAL -0.4% -0.5% 0.9% 1.7% 1.9% 1.3% 1.0% TOTAL 70.1% 70.1% 68.5% 70.1% 70.8% 71.0% 93.1% * 13 RAFIKI - (461) * Total -229 -332 31.06% 178 BANKING SURVEY | 2018 BANKING SURVEY | 2018 179 TBL MFB SURVEY 2018 - 2017 RESULTS AND ANALYSIS Ranking Institution Core Capital to Total Deposit Liabilities (%) Ranking Institution Return on Assets (%) Ranking Institution Efficiency Ratio (%) 2017 2016 2017 2016 Change 2017 2016 2017 2016 Change 2017 2016 2017 2016 Change 1 1 UWEZO 561.86 621.30 -59.45 1 2 U & I 3.90 3.55 0.36 1 2 SUMAC 52.52 56.64 -4.11 2 2 REMU 116.53 177.02 -60.49 2 6 SUMAC 0.89 -2.22 3.11 2 1 FAULU 53.31 52.98 0.33 3 8 U & I 80.64 56.15 24.49 3 5 FAULU 0.65 0.36 0.29 3 3 U & I 59.84 58.56 1.28 4 4 SUMAC 57.94 100.01 -42.06 4 4 KWFT 0.13 1.01 -0.88 4 4 KWFT 74.72 70.09 4.63 5 5 CARITAS 48.51 94.91 -46.40 5 8 SMEP -4.40 -5.51 1.11 5 8 SMEP 96.60 103.23 -6.64 6 9 KWFT 26.00 24.99 1.01 6 3 UWEZO -5.67 1.61 -7.28 6 6 REMU 114.78 97.55 17.23 7 12 FAULU 23.34 22.33 1.02 7 7 REMU -7.03 -4.59 -2.44 7 5 UWEZO 123.27 92.96 30.31 8 3 MAISHA 18.61 114.19 -95.58 8 10 CARITAS -8.07 -12.80 4.73 8 10 CARITAS 160.85 267.58 -106.73 9 11 SMEP 14.35 22.49 -8.14 9 12 MAISHA -16.69 -27.55 10.86 9 12 MAISHA 203.33 540.65 -337.32 10 7 DARAJA 6.90 57.10 -50.20 10 1 CENTURY -21.96 23.90 -45.86 10 9 CENTURY 214.48 181.78 32.70 11 13 CENTURY -14.89 -19.73 4.85 11 11 DARAJA -35.62 -25.28 -10.34 11 13 CHOICE 337.37 544.50 -207.13 12 6 CHOICE -30.64 58.32 -88.96 12 13 CHOICE -45.16 -40.63 -4.53 12 11 DARAJA 352.58 338.91 13.67 * 10 RAFIKI - 23.94 * * 9 RAFIKI - -6.29 * * 7 RAFIKI - 100.08 * Average 27.97 26.31 1.66 Average -0.38 -0.46 0.08 Average 70.07 70.11 -0.04 Ranking Institution Return on Equity (%) Ranking Institution Liquidity Ratio (%) 2017 2016 2017 2016 Change Non Perfoming Loans Provisions to Operat- 2017 2016 2017 2016 Change 1 2 U & I 9.80 10.54 -0.74 Ranking Institution ing Income (%) 1 7 UWEZO 156.70 46.47 110.23 2 3 SUMAC 4.02 7.25 -3.23 2017 2016 2017 2016 Change 2 1 CARITAS 75.63 122.41 -46.78 3 5 FAULU 3.64 2.25 1.40 1 6 SUMAC 1.65 6.26 -4.60 3 2 CHOICE 69.65 110.93 -41.27 4 4 KWFT 0.79 6.82 -6.04 2 2 KWFT 2.02 2.10 -0.08 4 5 REMU 59.87 72.01 -12.15 5 6 UWEZO -7.10 1.93 -9.02 3 3 U & I 2.14 2.30 -0.16 5 11 SUMAC 56.52 28.09 28.43 6 7 REMU -14.88 -9.06 -5.82 4 7 SMEP 4.66 8.10 -3.45 6 8 KWFT 34.70 36.76 -2.06 7 9 SMEP -23.97 -27.49 3.52 5 5 FAULU 5.06 3.91 1.15 7 13 CENTURY 31.20 6.24 24.97 8 8 CARITAS -25.94 -27.11 1.17 6 1 CARITAS 5.59 0.00 5.59 8 9 FAULU 29.78 34.59 -4.81 9 10 MAISHA -75.82 -52.81 -23.01 7 11 UWEZO 7.42 13.34 -5.91 9 10 SMEP 27.98 32.22 -4.24 10 11 DARAJA -113.72 -55.42 -58.30 8 8 REMU 7.71 8.96 -1.25 10 3 MAISHA 24.61 99.63 -75.02 11 13 CHOICE -257.96 -107.76 -150.20 9 10 CENTURY 7.89 11.76 -3.87 11 6 DARAJA 24.34 70.43 -46.09 12 1 CENTURY -482.39 292.04 -774.43 10 4 MAISHA 10.23 3.86 6.37 12 12 U & I 20.51 27.14 -6.63 * 12 RAFIKI - -61.88 * 11 12 DARAJA 20.37 13.37 7.00 * 4 RAFIKI - 99.50 * Average -2.11 -2.86 0.75 12 9 CHOICE 20.65 11.47 9.18 * 13 RAFIKI - 19.54 * Average 33.14 41.21 -8.07 Average 3.43 4.59 -1.16 Ranking Institution Avarage Cost of Funds (%) 2017 2016 2017 2016 Change Total Non Perfoming Loans to Total Advanc- 1 3 CARITAS 2.88 3.41 -0.54 Ranking Institution es (%) 2 4 SMEP 3.41 3.70 -0.28 2017 2016 2017 2016 Change 3 5 KWFT 3.92 3.83 0.10 1 3 SUMAC 3.24 6.08 -2.83 4 1 UWEZO 4.40 1.71 2.69 2 1 CARITAS 5.28 4.69 0.59 5 13 REMU 5.24 10.07 -4.83 3 2 U & I 8.19 5.00 3.20 6 2 MAISHA 5.35 2.65 2.70 4 4 FAULU 16.80 9.23 7.57 7 9 SUMAC 6.66 7.89 -1.24 5 9 SMEP 18.83 20.00 -1.17 8 8 CENTURY 7.68 6.35 1.33 6 7 DARAJA 20.37 13.37 7.00 9 6 U & I 7.87 5.10 2.77 7 6 CHOICE 20.65 11.47 9.18 10 12 FAULU 8.13 9.30 -1.17 8 5 MAISHA 20.93 10.00 10.93 11 7 DARAJA 9.17 5.18 3.99 9 8 KWFT 21.02 17.40 3.62 12 11 CHOICE 18.66 9.12 9.54 10 10 REMU 35.24 30.22 5.02 * 10 RAFIKI - 8.74 * 11 12 CENTURY 53.70 42.68 11.02 Average 5.74 6.32 -0.59 12 13 UWEZO 72.48 44.45 28.02 * 11 RAFIKI - 34.66 * Average 18.42 9.06 9.37 180 BANKING SURVEY | 2018 BANKING SURVEY | 2018 181 INDIVIDUAL BANKS Individual Banks - Tier I Kenya Commercial Bank 2017 2016 2015 2014 2013 Strategic Focus BALANCE SHEET (KSH IN MILLIONS) Total Assets 555,630 504,775 467,741 376,969 323,312 Total Liabilities 466,639 423,786 386,855 304,802 260,922 Kenya Commercial Bank is the biggest Net Assets (Shareholders’ Funds) 88,991 80,990 80,886 72,167 62,390 commercial bank in Kenya in terms of Customer Deposits 440,164 386,611 347,702 276,750 237,213 the bank assets. KCB has over the past Other Deposits 5,234 5,623 14,760 8,734 5,517 Total Deposits 445,398 392,234 362,461 285,483 242,730 three years pursued a strategy which Loans and advances to customers (net of provisions) 387,943 353,900 312,080 248,824 198,370 departs from the traditional bricks and Total loans and advances to customers 411,666 373,031 324,283 257,398 206,139 mortar banking channels to non-branch Cash and balances with CBK 25,989 26,140 31,419 22,200 16,823 channels, particularly digital platforms, Kenya government securities 92,103 90,987 77,890 71,865 64,351 including internet, agency, mobile Placements with other banks 13,105 6,094 9,255 2,715 5,223 banking, and cards. “This strategy focuses PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) on growing digital banking so as to Income Interest on loans and advances 46,157 46,485 41,040 31,928 28,311 enhance the experience of our esteemed Interest on government securities 10,494 9,135 7,516 8,665 7,355 customers whenever they interact with us Interest on placements and bank balances 293 559 158 290 361 and at the same time spread our network Other Interest Income - 1 - - 61 in KCB,” said Mr. Oigara. Total Interest Income 56,944 56,179 48,713 40,883 36,089 Net Interest Income 44,115 42,925 33,650 31,185 29,001 Foreign exchange gain (loss) 2,928 2,204 2,203 2,192 1,684 The net profit before tax made in 2017 Fees and Commissions Income (net) 10,692 9,091 8,862 8,504 7,182 was KSh 27 billion, a decrease of 4% Other operating Income 3,266 3,965 3,983 5,495 2,418 from the previous KSh 28 billion recorded Total net operating income 61,001 58,184 48,697 47,376 40,284 in 2016. The total assets increased by Total income 73,830 71,439 63,761 57,074 47,373 10% from KSh 504 billion in 2016 to KSh Expenses Interest on deposits 11,754 12,391 13,717 9,019 6,447 555 billion in 2017.Customer deposits Interest on borrowed funds, deposits and placements from other banks 1,075 863 1,346 678 641 increased from KSh 386 billion in 2016 INDIVIDUAL BANKS Other interest expense - - - - - to KSh 440 billion in 2017 which is a Total interest expense 12,829 13,254 15,063 9,698 7,088 14% increase. Loans and advances grew General administrative expenses 19,848 17,545 14,421 13,495 13,412 by 10% from KSh 353 billion in 2016 to • TIER I Other operating expenses 8,703 8,398 8,633 8,506 7,356 KSh 387 billion in 2017. Interest on loans Total operating expenses 28,551 25,943 23,054 22,001 20,768 Total expenditure 41,380 39,198 38,117 31,699 27,856 and advances had a slight decrease of • TIER II Operating profits before provisions 32,450 32,241 25,644 25,375 19,516 1% from KSh 46.5 billion in 2016 to KSh Losses on loans and advances 4,979 3,759 2,199 3,014 1,783 46.2 billion in 2017.Net interest income • TIER III Profits Before Tax (after exceptional Items) 27,471 28,482 23,444 22,362 17,734 increased by 3% from KSh 42.9 billion DISCLOSURES (KSH IN MILLIONS) in 2016 to KSh 44.1 billion. Total non- Total provisions (Loan loss provision and interest in suspense) 23,723 19,131 12,203 8,575 7,769 performing loans grew by14% from KSh Non-performing loans Net of provisions & suspended interest 10,458 9,202 7,086 4,793 7,430 • TIER IV 9.2 in 2016 to KSh 10.5 in 2017. Total Non-performing loans (Net of interest in suspense) 29,406 24,123 16,473 11,558 13,520 Banking Realisable value of securities 9,717 9,363 6,068 4,793 5,376 Net NPL exposure 741 (161) 1,017 - 2,054 Total Insider Loans 13,824 17,089 11,266 9,288 8,321 Survey Core Capital 71,970 62,434 56,103 57,805 50,905 2018 Supplementary Capital 6,050 13,080 4,969 13,405 10,293 Total Capital 78,020 75,514 61,072 71,210 61,199 Quick Assets 131,197 123,222 118,563 96,780 86,397 Total risk weighted assets 483,986 430,839 397,490 338,877 272,565 SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 83.98 83.96 82.71 80.86 80.70 Shareholders’ funds/ Total assets 16.02 16.04 17.29 19.14 19.30 Total income/ Total assets 13.29 14.15 13.63 15.14 14.65 Net interest margin/ Total assets 7.94 8.50 7.19 8.27 8.97 Net advances/ Total assets 69.82 70.11 66.72 66.01 61.36 Total deposits/ Total assets 80.16 77.70 77.49 75.73 75.08 Gov. securities & placement with other banks/Total assets 18.93 19.23 18.63 19.78 21.52 Gov. securities & cash and balances with CBK/Total deposits 21.25 23.20 23.37 24.95 25.11 Gov. securities & cash and balances with CBK/Total advances 22.37 24.39 24.02 27.92 31.22 Total advances/ Total deposits 92.43 95.10 89.47 90.16 84.93 Shareholders’ funds/ Total deposits 19.98 20.65 22.32 25.28 25.70 Average Cost of Funds (COF) 2.81 3.21 3.96 3.26 2.84 Cost Income Ratio (CIR) 46.80 44.59 47.34 46.44 51.55 Gross NPL/Total Advances 8.30 7.60 5.95 5.19 7.37 Loans Loss Provisions/ Operating income 31.06 25.64 19.28 14.28 15.12 Core capital/ Total deposit liabilities 16.16 15.92 15.48 20.25 20.97 Core capital/ Total risk weighted assets 14.87 14.49 14.11 17.06 18.68 Quick assets / Total liabilities 28.12 29.08 30.65 31.75 33.11 Quick assets / Total deposit liabilities 29.46 31.42 32.71 33.90 35.59 182 BANKING SURVEY | 2018 BANKING SURVEY | 2018 183 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier I Directors Contacts Financial Snapshot Joshua Oigara-CEO P.O. Box 48400 - 00100, Nairobi Total Assets (Ksh in 'billions') 555.6 Equity Bank 2017 2016 2015 2014 2013 Strategic Focus Telephone: +254-20-3270000, 2851000, 2852000, Core Capital (Ksh in 'billions') 72.0 BALANCE SHEET (KSH IN MILLIONS) 0711012000, Profit Before Tax (Ksh in 'thousands') 27.5 Total Assets 406,402 379,749 341,329 276,116 238,194 Fax: +254-20-2242408 Non Perfoming Loans/Total Loans 7.1 Equity Bank is one of the biggest banks Tier Ranking 2 Total Liabilities 344,496 327,408 293,890 236,382 187,507 Email: [email protected] Return on Assets (%) 4.9 in Kenya whose business model has made Overall Ranking 5 Net Assets (Shareholders' Funds) 61,906 52,341 47,440 39,733 50,687 Website: www.kcbbankgroup.com Core Capital/Total Deposit Liability (%) 30.9 Customer Deposits 298,703 277,275 236,610 202,485 158,527 her rivals to envy. In 2018 a US-based Return on Capital Employed (%) 16.2 Other Deposits - 5 565 199 218 business and public policy expert Total Deposits 298,703 277,280 237,175 202,684 158,745 lauded Equity Bank’s business model for Loans and advances to customers (net of provisions) 214,485 213,806 225,037 187,976 152,029 easing access to formal nancial services Total loans and advances to customers 221,698 221,039 229,394 192,973 156,330 among entrepreneurs. In the book, LOAN LOSS PROVISION / OPERATING INCOME Cash and balances with CBK 24,453 16,378 30,707 11,317 11,008 Income & Expenses (KSh Billions) which is sponsored by the World Bank, Kenya government securities 106,479 90,894 32,127 32,556 32,082 Placements with other banks 24,065 25,768 16,554 16,905 10,921 Prof Redford notes that Equity Bank 2017 2016 2015 PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) has been challenging the traditional 42.74% 51.77% Income 25.20% 23.80% 32.13% banking norms, removing roadblocks to Interest on loans and advances 24,976 35,176 32,941 27,586 24,811 nancial inclusion. In 2018, Equity Bank 46.5 Interest on government securities 12,215 6,700 3,583 3,281 3,115 46.2 has awarded 1,000 secondary school 2013 2014 2015 2016 2017 41.0 Interest on placements and bank balances 505 1,002 676 267 348 scholarships to top performing boys and Other Interest Income 99 195 72 6 37 Total Interest Income 37,796 43,072 37,272 31,140 28,310 girls from the 47 counties from needy Net Interest Income 29,262 35,060 29,487 23,073 22,395 background. NON PERFORMING LOANS / TOTAL LOANS Foreign exchange gain (loss) 2,195 1,910 1,901 1,205 897 10.7 9.1 8.9 0.3 0.6 0.2 Fees and Commissions Income (net) 14,684 12,250 12,740 12,416 9,717 The net pro t slightly increased by 1% Other operating Income 1,587 1,104 589 1,386 475 INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS from KSh 22.8 billion recorded in 2016 to 12.29% 12.66% 13.84% ADVANCES INCOME Total net operating income 47,727 50,324 44,717 38,080 33,484 8.66% 9.91% Total income 56,261 58,336 52,502 46,146 39,399 KSh 23 billion posted in 2017. Total assets Expenses increased by 23.1% from KSh 380 billion Interest on deposits 6,488 6,115 5,669 3,534 3,212 recorded in 2016 to KSh 406 billion 2013 2014 2015 2016 2017 Interest on borrowed funds, deposits and placements from other banks 79 61 153 34 33 recorded in 2017.Customer deposits Other interest expense 1,967 1,837 1,962 1,412 1,375 grew by 8% to KSh 299 billion compared Total interest expense 8,534 8,013 7,785 4,980 4,620 to KSh 277 recorded in 2016.Loans and Balance Sheet (KSh Billions) General administrative expenses 12,567 12,898 12,119 12,447 10,343 CORE CAPITAL/TOTAL DEPOSIT LIABILITY Other operating expenses 9,741 9,637 8,937 7,449 5,325 advances remained constant at KSh Total operating expenses 22,308 22,536 21,056 19,896 15,668 214 billion in 2017 as recorded in 2016. 2017 2016 2015 34.95% 33.75% Total expenditure 30,842 30,548 28,840 24,876 20,288 Interest on loans and advances declined 25.80% 26.53% 26.93% Operating pro ts before provisions 25,419 27,788 23,661 21,270 19,111 by 29% to KSh 25 billion in 2017 as Losses on loans and advances 2,333 5,011 1,274 1,159 1,835 compared to KSh 35 billion recorded in 555.6 Pro ts Before Tax (after exceptional Items) 23,086 22,777 22,388 20,111 17,276 504.8 2016.Total non 467.7 DISCLOSURES (KSH IN MILLIONS) 440.2 Total provisions (Loan loss provision and interest in suspense) 7,213 7,233 4,357 4,996 4,301 386.6 387.9 2013 2014 2015 2016 2017 347.7 353.9 Non-performing loans Net of provisions & suspended interest 7,545 8,224 2,475 2,473 3,888 312.1 Total Non-performing loans (Net of interest in suspense) 12,539 13,641 5,241 5,677 6,977 Realisable value of securities 7,905 7,297 2,099 2,007 3,521 RETURN ON AVERAGE ASSETS Net NPL exposure (360) 927 375 466 367 Total Insider Loans 7,768 7,797 7,571 7,003 5,792 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Core Capital 59,198 51,248 47,659 39,733 34,759 Supplementary Capital 2,705 3,847 5,228 6,819 9,393 Total Capital 61,902 55,095 52,887 46,552 44,151 10.64% 9.76% 9.41% 9.25% 8.64% Quick Assets 154,997 133,040 79,389 60,777 54,011 Total risk weighted assets 374,209 356,088 325,484 268,518 187,346 SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 84.77 86.22 86.10 85.61 78.72 Profitability (KSh Billions) Shareholders' funds/ Total assets 15.23 13.78 13.90 14.39 21.28 2013 2014 2015 2016 2017 Total income/ Total assets 13.84 15.36 15.38 16.71 16.54 2017 2016 2015 Net interest margin/ Total assets 7.20 9.23 8.64 8.36 9.40 Net advances/ Total assets 52.78 56.30 65.93 68.08 63.83 Total deposits/ Total assets 73.50 73.02 69.49 73.41 66.65 AVERAGE COST OF FUNDS Gov. securities & placement with other banks/Total assets 32.12 30.72 14.26 17.91 18.05 61.0 Gov. securities & cash and balances with CBK/Total deposits 32.22 28.25 18.41 15.89 18.09 56.9 56.2 58.2 Gov. securities & cash and balances with CBK/Total advances 48.03 41.12 14.01 16.87 20.52 48.7 48.7 Total advances/ Total deposits 74.22 79.72 96.72 95.21 98.48 7.42% Shareholders' funds/ Total deposits 20.73 18.88 20.00 19.60 31.93 5.91% 5.57% 4.82% 4.92% 27.5 28.5 Average Cost of Funds (COF) 1.94 1.92 2.15 1.54 1.76 23.4 12.8 13.3 15.1 Cost Income Ratio (CIR) 46.74 44.78 47.09 52.25 46.79 Gross Non-Performing Loans/ Total loans & advances 6.66 6.99 2.98 3.87 5.24 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Loans Loss Provisions/ Operating income 10.47 10.76 6.19 8.41 7.99 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Core capital/ Total deposit liabilities 19.82 18.48 20.09 19.60 21.90 Core capital/ Total risk weighted assets 15.82 14.39 14.64 14.80 18.55 Quick assets / Total liabilities 44.99 40.63 27.01 25.71 28.80 Quick assets / Total deposit liabilities 51.89 47.98 33.47 29.99 34.02 184 BANKING SURVEY | 2018 BANKING SURVEY | 2018 185 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier I Co-Operative Bank of Kenya 2017 2016 2015 2014 2013 Strategic Focus Directors Contacts Financial Snapshot BALANCE SHEET (KSH IN MILLIONS) Dr. James Mwangi-CEO/MD P.O. Box 75104 - 00200, Nairobi Total Assets (Ksh in 'billions') 406.4 Total Assets 382,830 349,998 339,550 282,689 228,874 Telephone: +254-20-2262000, 0711026000, Core Capital (Ksh in 'billions') 59.2 Total Liabilities 314,602 289,952 290,239 240,338 193,222 Co-operative bank started in the late 0711025000, Profit Before Tax (Ksh in 'thousands') 23.1 Net Assets (Shareholders' Funds) 68,227 60,046 49,311 42,351 35,652 1960s as an Agricultural Cooperative Customer Deposits 285,566 259,472 263,709 216,174 174,776 Fax: +254-20-2711439 Non Perfoming Loans/Total Loans 5.7 Societies. Today, the bank is largely Tier Ranking 1 Other Deposits 424 3,403 2,905 3,241 5,462 Email: [email protected] Return on Assets (%) 5.7 Overall Ranking 3 Total Deposits 285,990 262,875 266,615 219,415 180,238 owned by Kenyans with 65% direct Website: www.equitybank.co.ke Core Capital/Total Deposit Liability (%) 37.3 Loans and advances to customers (net of provisions) 252,362 236,398 208,075 178,979 137,052 co-operative movement ownership, thus Return on Capital Employed (%) 19.8 Total loans and advances to customers 259,386 241,395 212,711 181,370 140,095 being one of the largest bank in Kenya. Cash and balances with CBK 25,683 24,458 27,174 22,925 19,296 The bank has a great understanding Kenya government securities 69,084 57,679 59,825 40,450 33,381 of SACCO operations and structures, Placements with other banks 7,740 5,360 13,869 12,815 10,057 therefore collaborating with ASILI Sacco LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) and creating a Co-branded VISA Sacco Income link card. The VISA card would help Sacco 2017 2016 2015 Interest on loans and advances 31,724 33,261 29,846 24,670 20,045 13.45% 13.08% Interest on government securities 8,196 8,479 6,069 4,310 4,107 members access their money through any 9.99% 10.52% 7.73% Interest on placements and bank balances 173 356 604 288 359 Co-op bank ATM or authorized agents. Other Interest Income - - - - - The visa would be used for purchasing 35.2 Total Interest Income 40,094 42,096 36,519 29,267 24,511 32.9 goods and services. 2013 2014 2015 2016 2017 Net Interest Income 27,861 29,369 22,955 24,287 19,891 25.0 Foreign exchange gain (loss) 1,949 1,604 1,881 1,202 1,444 Fees and Commissions Income (net) 8,635 8,818 8,648 8,083 6,830 Total assets increased by 9.4% from KSh 14.7 Other operating Income 1,438 1,147 545 898 577 350 billion in 2016 to KSh 382.83 billion NON PERFORMING LOANS / TOTAL LOANS 12.3 12.7 Total net operating income 39,883 40,938 34,028 34,469 28,741 0.5 1.0 0.7 in 2017.Customer deposits increased by Total income 52,188 53,738 47,593 39,449 33,361 10.1% from KSh 259.47 billion in 2016 Expenses 8.74% 8.32% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS to KSh 285.57 billion in 2017.Loans and 6.55% ADVANCES INCOME Interest on deposits 10,810 11,617 12,162 5,957 5,103 4.84% 3.72% Interest on borrowed funds, deposits and placements from other banks 226 118 233 206 146 advances also increased by 6.8% from Other interest expense 1,197 992 1,171 1,903 666 KSh 236.4 billion in 2016 to KSh 252.4 Total interest expense 12,233 12,727 13,565 8,067 5,916 billion in 2017.Interest on loans and 2013 2014 2015 2016 2017 General administrative expenses 13,426 12,704 11,926 11,423 10,689 advances fell by 4.6% from KSh 33.26 Other operating expenses 6,481 7,689 6,022 6,311 5,380 billion in 2016 to KSh 31.72 billion in Total operating expenses 19,907 20,393 17,947 17,735 16,069 Balance Sheet (KSh Billions) Total expenditure 32,139 33,120 31,512 25,801 21,985 2017. Net interest income also slightly CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions 20,049 20,618 16,080 13,648 11,377 decreased by 5% from KSh 29.37 billion 2017 2016 2015 Losses on loans and advances 3,547 2,595 2,007 1,134 773 in 2016 to KSh 27.86 billion in 2017. Profits Before Tax (after exceptional Items) 16,502 18,024 14,073 12,515 10,604 The bank registered a decrease in profit DISCLOSURES (KSH IN MILLIONS) before tax by 8.4% from KSh 18.02 billion 27.37% Total provisions (Loan loss provision and interest in suspense) 7,024 4,996 4,636 2,392 3,044 in 2016 to KSh 16.50 billion in 2017. 24.50% 25.12% 24.77% Non-performing loans Net of provisions & suspended interest 11,689 6,277 3,553 5,590 3,060 406.4 Total non-performing loans increased 23.10% 379.7 Total Non-performing loans (Net of interest in suspense) 17,765 10,144 7,131 7,670 5,426 341.3 Realisable value of securities 7,763 6,277 3,553 5,590 3,060 significantly by 75% from KSh 10.14 298.7 277.3 Net NPL exposure 3,927 - 0 - - billion in 2016 to KSh 17.77 billion in 236.6 2013 2014 2015 2016 2017 214.5 213.8 225.0 Total Insider Loans 9,480 9,001 6,899 6,836 6,464 2017. Core Capital 58,859 51,925 43,283 37,462 31,123 Supplementary Capital 22,188 20,845 20,088 18,073 11,071 Total Capital 81,048 72,770 63,372 55,534 42,194 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Quick Assets 102,506 87,497 100,867 76,190 62,734 Total risk weighted assets 357,310 319,615 298,137 256,511 205,152 SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 82.18 82.84 85.48 85.02 84.42 9.51% 9.78% 9.06% 7.90% 7.34% Shareholders' funds/ Total assets 17.82 17.16 14.52 14.98 15.58 Total income/ Total assets 13.63 15.35 14.02 13.96 14.58 Net interest margin/ Total assets 7.28 8.39 6.76 8.59 8.69 2013 2014 2015 2016 2017 Profitability (KSh Billion) Net advances/ Total assets 65.92 67.54 61.28 63.31 59.88 Total deposits/ Total assets 74.70 75.11 78.52 77.62 78.75 2017 2016 2015 Gov. securities & placement with other banks/Total assets 20.07 18.01 21.70 18.84 18.98 Gov. securities & cash and balances with CBK/Total deposits 24.75 23.47 25.62 22.42 23.02 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 26.63 23.89 28.12 22.30 23.83 Total advances/ Total deposits 90.70 91.83 79.78 82.66 77.73 Shareholders' funds/ Total deposits 23.86 22.84 18.50 19.30 19.78 47.7 50.3 43.1 44.7 Average Cost of Funds (COF) 3.59 4.15 4.34 2.59 2.76 2.89% 37.8 2.30% 2.61% 2.49% 37.3 Cost Income Ratio (CIR) 49.91 49.81 52.74 51.45 55.91 2.14% Gross Non-Performing Loans/ Total loans & advances 7.21 4.67 3.85 4.40 4.36 23.1 22.8 22.4 Loans Loss Provisions/ Operating income 15.23 9.45 10.51 6.03 8.24 8.5 8.0 7.8 Core capital/ Total deposit liabilities 20.58 19.75 16.23 17.07 17.27 Core capital/ Total risk weighted assets 16.47 16.25 14.52 14.60 15.17 PROFIT BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Quick assets / Total liabilities 32.58 30.18 34.75 31.70 32.47 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total deposit liabilities 35.84 33.28 37.83 34.72 34.81 186 BANKING SURVEY | 2018 BANKING SURVEY | 2018 187 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier I Directors Contacts Financial Snapshot Standard Chartered Bank 2017 2016 2015 2014 2013 P.O. Box 30437 - 00100, Nairobi Total Assets (Ksh in 'billions') 382.8 Strategic Focus Dr. Gideon Muriuki, MBS-MD & CEO BALANCE SHEET (KSH IN MILLIONS) Telephone: +254-20-2884000, 2734555, Core Capital (Ksh in 'billions') 58.9 Total Assets 285,125 250,274 234,131 222,636 220,524 0711056000, Profit Before Tax (Ksh in 'thousands') 16.5 Total Liabilities 240,541 206,369 193,216 182,186 184,494 Standard Chartered Bank Kenya Ltd is Fax: +254-20-2734599 Non Perfoming Loans/Total Loans 6.8 Tier Ranking 3 Net Assets (Shareholders' Funds) 44,584 43,905 40,915 40,450 36,030 one of the oldest banking institutions in Email: [email protected] Return on Assets (%) 4.3 Customer Deposits 213,349 185,598 172,036 154,067 154,720 Overall Ranking 6 the country. On August 2017, standard Website: www.cbagroup.com Core Capital/Total Deposit Liability (%) 24.2 Other Deposits 12,701 3,046 4,293 3,652 6,560 Total Deposits 226,051 188,645 176,329 157,719 161,280 Chartered announced a pre-tax profit Return on Capital Employed (%) 20.6 Loans and advances to customers (net of provisions) 126,294 122,711 115,125 122,749 129,672 of KShs 4.98 billion for the first Half of Total loans and advances to customers 139,406 132,497 122,904 128,768 131,923 2017. The Bank said the 33per cent drop, Cash and balances with CBK 13,342 15,513 14,240 15,383 14,045 year-on-year, reflects the effects of the Kenya government securities 109,884 86,345 73,125 58,216 53,164 Banking (Amendment) Act, 2016, which LOAN LOSS PROVISION / OPERATING INCOME Interest & Expenses (KSh Billions) Placements with other banks 5,326 1,576 3,191 4,803 2,099 capped lending rates and introduced PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) a floor on deposit rates, slowdown in 2017 2016 2015 Income economic activity in the run up to the 21.76% Interest on loans and advances 13,558 14,845 14,915 15,674 15,528 11.76% 8.62% 15.02% 13.50% Interest on government securities 11,282 10,049 6,974 5,946 5,942 general elections and an increase in the Interest on placements and bank balances 530 467 756 333 113 non-performing loan book. On October 31.7 33.3 2013 2014 2015 2016 2017 29.8 Other Interest Income 852 398 234 167 97 2017, the bank set aside KSh 20 million Total Interest Income 26,222 25,759 22,879 22,120 21,680 for capacity building of women-owned Net Interest Income 18,485 19,351 18,086 18,783 19,242 enterprise firm Under the initiative Foreign exchange gain (loss) 2,661 2,840 2,332 2,017 2,278 Fees and Commissions Income (net) 3,775 3,905 3,908 3,815 3,800 dubbed Women in Tech Incubator, the NON PERFORMING LOANS / TOTAL LOANS 8.6 8.8 8.6 0.2 0.4 0.6 Other operating Income 1,596 1,215 768 2,282 948 Bank in partnership with iLab Africa, a Total net operating income 26,518 27,311 25,094 26,897 26,268 division of Strathmore University. INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Total income 34,255 33,719 29,886 30,234 28,705 ADVANCES INCOME Expenses 10.31% The net profit declined by 25% from 6.22% 6.29% 6.67% Interest on deposits 6,436 5,713 4,014 3,055 3,390 5.50% Interest on borrowed funds, deposits and placements from other banks 216 134 511 1,089 1,488 KSh 12.7 billion recorded in 2016 to KSh Other interest expense 1,085 562 268 96 64 9.5 billion recorded in 2017. Total assets 2013 2014 2015 2016 2017 Total interest expense 7,737 6,408 4,793 4,240 4,942 increased by 14% from KSh 205 billion General administrative expenses 8,270 8,537 7,645 7,259 6,570 recorded in 2016 to KSh 285 billion Other operating expenses 4,553 3,810 3,577 3,127 2,891 recorded in 2017.Customer deposits Balance Sheet (KSh Billions) Total operating expenses 12,823 12,347 11,222 10,386 9,461 Total expenditure 20,560 18,755 16,015 14,626 14,403 increased by 15% to KSh 213 billion CORE CAPITAL/TOTAL DEPOSIT LIABILITY 2017 2016 2015 Operating profits before provisions 13,695 14,964 13,872 15,608 14,302 in 2017 compared to KSh 185 billion Losses on loans and advances 4,186 2,200 4,898 1,308 987 recorded in 2016.Loans and advances Profits Before Tax (after exceptional Items) 9,510 12,764 8,974 14,300 13,315 increased by 3% from KSh 122 billion 28.22% 29.40% DISCLOSURES (KSH IN MILLIONS) recorded in 2016 to KSh 126 posted in 24.67% 24.39% 23.19% Total provisions (Loan loss provision and interest in suspense) 13,112 9,786 7,779 6,018 2,251 2017. Interest on loans declined by 9% 382.8 Non-performing loans Net of provisions & suspended interest 4,509 5,252 6,918 4,734 1,597 350.0 339.5 to KSh 13 billion recorded in 2017 as Total Non-performing loans (Net of interest in suspense) 11,318 10,167 11,681 8,887 3,106 285.6 259.5 263.7 Realisable value of securities 4,117 4,502 6,130 4,407 1,387 compared to KSh 14 billion in 2016.Net 252.4 236.4 2013 2014 2015 2016 2017 208.1 Net NPL exposure 392 750 788 327 210 interest income declined by 4% from Total Insider Loans 6,379 6,248 5,946 5,222 4,255 KSh 19 billion recorded in 2016 to KSh Core Capital 35,628 35,258 33,259 28,944 25,831 18 billion in 2017.Total non-performing Supplementary Capital 6,614 6,846 6,888 7,344 4,890 loans grew by 11% from KSh 10 billion in TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 42,242 42,104 40,147 36,288 30,720 RETURN ON AVERAGE ASSETS 2016 to KSh 11 billion in 2017. Quick Assets 128,551 103,435 90,556 78,402 69,308 Total risk weighted assets 228,112 201,321 189,747 183,105 147,682 7.07% 6.99% 7.47% SELECTED PERFORMANCE RATIOS (IN %) 6.46% 6.43% Total liabilities/ Total assets 84.36 82.46 82.52 81.83 83.66 Shareholders' funds/ Total assets 15.64 17.54 17.48 18.17 16.34 Profitability (KSh Billions) Total income/ Total assets 12.01 13.47 12.76 13.58 13.02 2013 2014 2015 2016 2017 Net interest margin/ Total assets 6.48 7.73 7.72 8.44 8.73 Net advances/ Total assets 44.29 49.03 49.17 55.13 58.80 2017 2016 2015 Total deposits/ Total assets 79.28 75.38 75.31 70.84 73.13 Gov. securities & placement with other banks/Total assets 40.41 35.13 32.60 28.31 25.06 Gov. securities & cash and balances with CBK/Total deposits 43.22 40.70 37.31 33.06 30.48 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 78.82 65.17 59.50 45.21 40.30 40.1 42.1 40.0 41.0 Total advances/ Total deposits 61.67 70.24 69.70 81.64 81.80 36.5 34.0 Shareholders' funds/ Total deposits 19.72 23.27 23.20 25.65 22.34 Average Cost of Funds (COF) 2.94 3.10 2.57 2.63 3.02 6.76% 5.90% Cost Income Ratio (CIR) 48.36 45.21 44.72 38.61 36.02 5.35% 18.0 4.18% 4.11% 16.5 Gross Non-Performing Loans/ Total loans & advances 12.64 11.35 11.96 8.35 2.92 14.1 12.2 12.7 13.6 Loans Loss Provisions/ Operating income 25.68 18.00 18.98 15.44 5.74 Core capital/ Total deposit liabilities 15.76 18.69 18.86 18.35 16.02 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Core capital/ Total risk weighted assets 15.62 17.51 17.53 15.81 17.49 Quick assets / Total liabilities 53.44 50.12 46.87 43.03 37.57 Quick assets / Total deposit liabilities 56.87 54.83 51.36 49.71 42.97 188 BANKING SURVEY | 2018 BANKING SURVEY | 2018 189 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier I Directors Contacts Financial Snapshot Barclays Bank of Kenya 2017 2016 2015 2014 2013 Strategic Focus BALANCE SHEET (KSH IN MILLIONS) Lamin Manjang- MD &CEO P.O. Box 30003 - 00100, Nairobi Total Assets (Ksh in 'billions') 285.1 Total Assets 271,682 259,498 241,153 226,118 207,010 Telephone: +254-20-3293000, 3293900, 3291000, Core Capital (Ksh in 'billions') 35.6 Total Liabilities 228,123 217,404 201,436 187,932 174,639 Barclays has operated in Kenya for over 3294000, Profit Before Tax (Ksh in 'thousands') 9.5 Net Assets (Shareholders’ Funds) 43,559 42,095 39,716 38,186 32,371 100 years. Financial strength coupled Fax: +254-20-3747880 Non Perfoming Loans/Total Loans 8.1 Customer Deposits 186,245 178,448 165,359 164,779 151,122 Tier Ranking 4 with extensive local and international Email: [email protected] Return on Assets (%) 3.3 Other Deposits 3,059 3,263 187 121 4,738 Overall Ranking 8 resources have positioned Barclays Bank Website: www.standardchartered.com Core Capital/Total Deposit Liability (%) 21.3 Total Deposits 189,305 181,711 165,546 164,900 155,860 of Kenya as a top provider of financial Return on Capital Employed (%) 15.8 Loans and advances to customers (net of provisions) 168,397 168,510 145,379 125,423 118,362 Total loans and advances to customers 177,224 176,349 148,702 129,115 121,277 services in the market. Barclays Bank of Cash and balances with CBK 16,354 13,378 18,180 24,568 16,908 Kenya, is a commercial bank in Kenya Kenya government securities 67,985 56,044 48,051 57,167 47,559 and a subsidiary of UK-based Barclays LOAN LOSS PROVISION / OPERATING INCOME Placements with other banks 1,818 219 253 1,207 1,386 Income & Expenses (KSh Billions) bank. It is licensed by the Central Bank of PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Kenya and national banking regulator. In Income 25.68% 2017 2016 2015 Interest on loans and advances 21,259 20,617 18,840 16,707 14,850 December 2017 London-based Barclays 18.98% 18.00% Interest on government securities 5,770 5,587 5,141 4,587 4,728 PLC reduced shareholding in Barclays 15.44% Interest on placements and bank balances 117 151 103 211 273 Africa Group Limited to 14.9% and 5.74% Other Interest Income 20 1,766 1,202 1,436 1,446 thus allowing Barclays Africa to make Total Interest Income 27,166 28,121 25,285 22,941 21,297 14.8 14.9 changes. One of the proposed changes 13.6 Net Interest Income 21,775 22,334 20,410 16,653 17,333 is to change holding company name 2013 2014 2015 2016 2017 Foreign exchange gain (loss) 2,864 2,620 2,034 2,042 2,084 Fees and Commissions Income (net) 4,822 5,278 6,650 6,364 6,520 from Barclays Africa Group Limited to Other operating Income 321 959 367 278 458 Absa Group Limited, subject to approval 3.8 3.9 3.9 0.5 0.5 0.8 Total net operating income 29,782 31,191 29,461 25,338 26,395 from regulators and shareholders, The NON PERFORMING LOANS / TOTAL LOANS Total income 35,172 36,978 34,336 31,626 30,359 INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS change will be happening at group level ADVANCES INCOME Expenses and hence it will be difficult to note any Interest on deposits 4,835 4,551 4,275 2,912 2,037 12.64% change .However, Barclays Bank Kenya 11.96% 11.35% Interest on borrowed funds, deposits and placements from other banks 556 589 555 135 97 will not change its name immediately. 8.35% Other interest expense - 647 45 290 303 Total interest expense 5,391 5,787 4,875 3,337 2,437 General administrative expenses 12,720 12,268 11,583 10,298 10,338 Total asset grew by 5% from KSh 259 2.92% Other operating expenses 3,941 4,557 4,040 4,292 4,439 billion in 2016 to KSh 271 billion in 2017. Balance Sheet (KSh Billion) Total operating expenses 16,661 16,824 15,622 14,590 14,777 2013 2014 2015 2016 2017 Total expenditure 22,052 22,611 20,498 17,927 17,215 Customer deposits increased by 4% from Operating profits before provisions 13,120 14,367 13,839 13,698 13,144 KSh 178 billion in 2016 to KSh 186 billion 2017 2016 2015 Losses on loans and advances 3,115 3,927 1,766 1,405 1,223 in 2017. Loans and advances slightly Profits Before Tax (after exceptional Items) 10,005 10,440 12,073 12,293 11,921 decreased from KSh 168.5 billion in 2016 CORE CAPITAL/TOTAL DEPOSIT LIABILITY DISCLOSURES (KSH IN MILLIONS) to KSh 168.3 billion in 2017.Interest on 285.1 Total provisions (Loan loss provision and interest in suspense) 8,827 7,839 3,323 3,692 2,915 loans and advances increased by 3% 250.3 Non-performing loans Net of provisions & suspended interest 3,788 3,633 1,869 2,445 665 18.35% 18.86% 18.69% 234.1 from KSh 20.6 billion in 2016 to KSh 213.3 Total Non-performing loans (Net of interest in suspense) 9,359 12,988 5,336 5,801 3,580 16.02% 15.76% 185.6 21.2 billion in 2017.Net interest income 172.0 Realisable value of securities 1,656 1,786 811 1,042 262 Net NPL exposure 2,132 1,847 1,058 1,403 402 slightly decreased by 3% from KSh 22.3 126.3 122.7 115.1 Total Insider Loans 11,718 13,060 13,458 10,156 9,196 billion in 2016 to KSh 21.8 billion in 2017. 2013 2014 2015 2016 2017 Core Capital 38,768 37,617 35,184 32,624 31,798 The bank recorded a slight decrease in Supplementary Capital 5,166 5,128 6,038 432 1,374 net profit by 4% from KSh 10.4 billion Total Capital 43,934 42,745 41,222 33,055 33,172 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES in 2016 to KSh 10.0 billion in 2017. Total Quick Assets 86,157 69,641 66,484 82,941 65,852 non-performing loans also decreased by RETURN ON AVERAGE ASSETS Total risk weighted assets 243,728 239,299 224,121 207,154 191,652 SELECTED PERFORMANCE RATIOS (IN %) 28%from 12.99 billion in 2016 to KSh 9.3 Total liabilities/ Total assets 83.97 83.78 83.53 83.11 84.36 billion in 2017. Shareholders’ funds/ Total assets 16.03 16.22 16.47 16.89 15.64 6.40% 6.45% Total income/ Total assets 12.95 14.25 14.24 13.99 14.67 5.27% 3.93% 3.55% Profitability (KSh Billion) Net interest margin/ Total assets 8.01 8.61 8.46 7.36 8.37 Net advances/ Total assets 61.98 64.94 60.28 55.47 57.18 Total deposits/ Total assets 69.68 70.02 68.65 72.93 75.29 2017 2016 2015 2013 2014 2015 2016 2017 Gov. securities & placement with other banks/Total assets 25.69 21.68 20.03 25.82 23.64 Gov. securities & cash and balances with CBK/Total deposits 31.04 26.75 27.46 36.15 31.14 Gov. securities & cash and balances with CBK/Total advances 38.36 31.78 32.31 44.28 39.21 27.3 Total advances/ Total deposits 93.62 97.05 89.83 78.30 77.81 26.2 25.8 26.5 25.1 AVERAGE COST OF FUNDS 22.9 Shareholders’ funds/ Total deposits 23.01 23.17 23.99 23.16 20.77 Average Cost of Funds (COF) 2.85 2.83 2.92 1.85 1.37 Cost Income Ratio (CIR) 55.94 53.94 53.03 57.58 55.99 3.20% 3.20% 3.21% 12.8 2.60% 2.71% Gross Non-Performing Loans/ Total loans & advances 7.12 6.51 3.49 4.75 2.95 9.5 9.0 7.7 6.4 4.8 Loans Loss Provisions/ Operating income 18.70 16.51 6.83 8.33 11.04 Core capital/ Total deposit liabilities 20.48 20.70 21.25 19.78 20.40 Profit before tax Total interest Income Total interest Total opera@ng Core capital/ Total risk weighted assets 15.91 15.72 15.70 15.75 16.59 2013 2014 2015 2016 2017 expenses income Quick assets / Total liabilities 37.77 32.03 33.01 44.13 37.71 Quick assets / Total deposit liabilities 45.51 38.33 40.16 50.30 42.25 190 BANKING SURVEY | 2018 BANKING SURVEY | 2018 191 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier I Directors Contacts Financial Snapshot Diamond Trust Bank 2017 2016 2015 2014 2013 Strategic Focus BALANCE SHEET (KSH IN MILLIONS) Jeremy Awori-MD P.O. Box 30120 - 00100, Nairobi Total Assets (Ksh in 'billions') 271.7 Total Assets 270,082 244,124 190,948 141,176 114,136 Telephone: +254-20-3267000, Core Capital (Ksh in 'billions') 38.8 Total Liabilities 227,078 207,692 160,952 115,391 95,568 Fax: +254-20-2213915 Profit Before Tax (Ksh in 'thousands') 10.0 Diamond Trust Bank group is a major Net Assets (Shareholders› Funds) 43,004 36,432 29,996 25,784 18,568 Email: [email protected] Non Perfoming Loans/Total Loans 5.3 banking group active in East Africa Tier Ranking 5 Customer Deposits 190,469 169,600 126,229 101,594 84,672 Website: www.barclayskenya.com Return on Assets (%) 3.7 in countries such as Kenya, Burundi, Overall Ranking 9 Other Deposits 18,786 16,147 8,149 2,176 3,735 Core Capital/Total Deposit Liability (%) 23.0 Total Deposits 209,254 185,747 134,378 103,770 88,407 Tanzania and Uganda. The banking Return on Capital Employed (%) 20.5 Loans and advances to customers (net of provisions) 148,516 136,686 125,818 94,059 75,292 group works in collaboration with Habib Total loans and advances to customers 156,843 141,702 128,265 95,258 76,304 bank, Aga Khan fund for economic Cash and balances with CBK 15,050 14,928 14,578 7,758 7,672 development and International Kenya government securities 84,881 74,514 34,311 22,725 17,832 Corporation of the World bank. DTB Loan Loss Provision / Opera/ng Income Income & Expenses (KSh Billions) Placements with other banks 2,910 2,887 4,974 7,413 4,120 acquired Habib bank for only 1.8 billion PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) in a share swap deal. Habib investors 2017 2016 2015 Income 18.34% 20.78% were offered 5% interest in the Nairobi 12.27% 9.25% 7.59% Interest on loans and advances 16,834 17,406 15,264 11,958 9,963 Interest on government securities 8,695 7,203 2,573 2,199 2,053 Securities exchange. Investors in Habib Interest on placements and bank balances 102 188 187 108 96 own 12% of the bank. This acquisition Other Interest Income 3 7 9 10 13 2013 2014 2015 2016 2017 21.3 20.6 will see DTB increase in the market share. 18.8 Total Interest Income 25,633 24,804 18,033 14,276 12,124 Net Interest Income 13,737 13,795 10,657 8,843 7,848 Foreign exchange gain (loss) 1,039 1,266 1,061 807 796 The net profit of 2017 decline by 7% Fees and Commissions Income (net) 1,902 1,615 1,418 1,214 1,111 to KSh 8.2 billion compared to KSh 8.9 Non Performing Loans / Total Loans Other operating Income 156 138 141 81 53 billion recorded in 2016.Total assets 4.8 5.3 6.7 0.1 0.2 0.1 Total net operating income 16,903 16,872 13,277 10,944 9,809 7.23% 7.91% increased by 11%from KSh 244 billion in 5.28% Total income 28,799 27,881 20,652 16,377 14,085 2016 to KSh 270 billion in 2017.Loans and 3.28% 3.88% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS ADVANCES INCOME Expenses advances increased by 9% from KSh 136 Interest on deposits 10,660 9,777 6,674 5,089 3,966 billion in 2016 to KSh 148 billion in 2017. Interest on borrowed funds, deposits and placements from other banks 482 352 122 167 166 Other interest expense 755 879 580 177 144 Interest on loans and advances declined 2013 2014 2015 2016 2017 Total interest expense 11,896 11,009 7,376 5,433 4,276 by 3% from KSh 17billion in 2016 to KSh General administrative expenses 3,631 2,997 2,900 2,510 2,240 16 billon in 2017.Net interest income Balance Sheet (Ksh Billions) Other operating expenses 2,365 2,178 1,765 1,638 1,434 remained constant at KSh 13 billion. Total Total operating expenses 5,996 5,175 4,665 4,147 3,673 non-performing loans increased by 136% Total expenditure 17,892 16,184 12,041 9,580 7,949 from KSh 4 billion in 2016 to KSh 10 Core Capital/Total Deposit Liability 2017 2016 2015 Operating profits before provisions 10,908 11,697 8,611 6,796 6,136 23.61% billion in 2017. 23.00% Losses on loans and advances 2,680 2,821 1,557 490 602 22.67% 22.75% Profits Before Tax (after exceptional Items) 8,227 8,876 7,054 6,306 5,534 21.98% DISCLOSURES (KSH IN MILLIONS) 271.7 259.5 Total provisions (Loan loss provision and interest in suspense) 8,327 5,016 2,447 1,199 1,012 241.2 Non-performing loans Net of provisions & suspended interest 3,574 503 1,208 - - Total Non-performing loans (Net of interest in suspense) 10,598 4,486 3,269 1,068 972 186.2 178.4 165.4 168.4 168.5 Realisable value of securities 3,574 503 1,208 - - 2013 2014 2015 2016 2017 145.4 Net NPL exposure - 0 - - - Total Insider Loans 3,891 4,108 4,048 3,380 2,681 Core Capital 35,344 29,720 25,421 22,245 15,045 Supplementary Capital 3,447 4,184 4,879 2,819 2,975 Return on Average Assets TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 38,790 33,904 30,299 25,064 18,020 Quick Assets 102,842 92,329 53,862 37,897 29,625 6.76% 6.31% 5.74% Total risk weighted assets 204,039 183,223 171,281 132,274 87,817 4.63% 4.19% SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 84.08 85.08 84.29 81.74 83.73 Shareholders› funds/ Total assets 15.92 14.92 15.71 18.26 16.27 Profitability (Ksh Billions) Total income/ Total assets 10.66 11.42 10.82 11.60 12.34 2013 2014 2015 2016 2017 Net interest margin/ Total assets 5.09 5.65 5.58 6.26 6.88 2017 2016 2015 Net advances/ Total assets 54.99 55.99 65.89 66.63 65.97 Total deposits/ Total assets 77.48 76.09 70.37 73.50 77.46 Gov. securities & placement with other banks/Total assets 32.51 31.71 20.57 21.35 19.23 Average Cost of Funds Gov. securities & cash and balances with CBK/Total deposits 37.00 36.64 25.60 21.59 22.35 31.2 Gov. securities & cash and balances with CBK/Total advances 54.12 52.58 26.75 23.86 23.37 29.8 29.5 3.25% 3.29% 3.23% 27.2 28.1 Total advances/ Total deposits 74.95 76.29 95.45 91.80 86.31 25.3 Shareholders› funds/ Total deposits 20.55 19.61 22.32 24.85 21.00 2.11% Average Cost of Funds (COF) 5.00 4.95 4.32 4.65 4.43 1.61% Cost Income Ratio (CIR) 35.47 30.67 35.14 37.90 37.45 12.1 10.0 10.4 Gross Non-Performing Loans/ Total loans & advances 7.59 3.90 2.85 1.26 1.33 5.4 5.8 4.9 Loans Loss Provisions/ Operating income 41.55 23.61 15.53 9.76 9.91 Core capital/ Total deposit liabilities 16.89 16.00 18.92 21.44 17.02 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 17.32 16.22 14.84 16.82 17.13 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Quick assets / Total liabilities 45.29 44.45 33.46 32.84 31.00 Quick assets / Total deposit liabilities 49.15 49.71 40.08 36.52 33.51 192 BANKING SURVEY | 2018 BANKING SURVEY | 2018 193 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier I Contacts Financial Snapshot Directors Stanbic Bank Kenya 2017 2016 2015 2014 2013 Strategic Focus Nasim Devji- MD &CEO P.O. Box 61711 - 00200, Nairobi Telephone: Total Assets (Ksh in 'billions') 270.1 BALANCE SHEET (KSH IN MILLIONS) +254-20-2849000, 2210988/9, 0732121000, Core Capital (Ksh in 'billions') 35.3 Total Assets 239,408 204,895 198,578 171,347 170,726 Total Liabilities 206,357 174,657 170,327 144,703 148,373 0719031000 Profit Before Tax (Ksh in 'thousands') 8.2 The Group successfully completed Net Assets (Shareholders’ Funds) 33,051 30,238 28,251 26,644 22,353 Fax: +254-20-2245495 Non Perfoming Loans/Total Loans 6.8 rebranding of both the Bank and the Tier Ranking 6 Customer Deposits 153,009 121,989 108,130 96,830 95,708 Email: [email protected] Return on Assets (%) 3.0 Holding Company to Stanbic Bank Kenya Overall Ranking 10 Other Deposits 25,687 32,787 33,151 18,852 19,481 Website: www.dtbafrica.com Core Capital/Total Deposit Liability (%) 19.1 Total Deposits 178,696 154,776 141,281 115,682 115,189 Limited from CfC Stanbic Bank Limited. Return on Capital Employed (%) 16.9 Loans and advances to customers (net of provisions) 130,536 115,587 101,576 88,347 69,133 The Holding Company was renamed from Total loans and advances to customers 135,443 118,482 103,535 89,796 70,358 CfC Stanbic Holdings to Stanbic Holdings Cash and balances with CBK 8,045 8,620 11,280 9,514 9,418 Plc. LOAN LOSS PROVISION / OPERATING INCOME Kenya government securities 75,480 52,776 48,395 57,452 24,575 Income & Expenses (KSh Billions) Placements with other banks 8,193 7,120 18,513 10,184 20,068 PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) On December 2017 Stanbic Bank has 2017 2016 2015 Income become the first bank in Kenya to offer 25.97% Interest on loans and advances 12,062 12,106 10,486 8,508 7,533 an Automated Float Purchase platform 14.75% 6.19% 6.10% 9.70% Interest on government securities 4,267 4,682 2,842 2,845 2,262 for Mpesa agents. The service was Interest on placements and bank balances 263 325 1,337 286 539 available through its newly installed Cash 2013 2014 2015 2016 2017 16.8 17.4 Other Interest Income - - - - - Deposit machines (at selected digital 15.3 Total Interest Income 16,592 17,113 14,665 11,639 10,334 Net Interest Income 10,588 10,770 9,174 7,399 5,392 branches) and the bank’s tellers at all Foreign exchange gain (loss) 4,418 3,361 3,098 2,839 3,686 other branches. Mpesa agents will be Fees and Commissions Income (net) 3,532 2,547 2,621 2,816 2,524 able to purchase float of any amount NON PERFORMING LOANS / TOTAL LOANS 1.9 1.6 1.4 0.1 0.2 0.2 Other operating Income 110 1,461 1,455 2,303 2,058 between KSh 5,000 to KSh 400,000 (per Total net operating income 18,647 18,139 16,348 15,356 13,659 transaction) using the platform. All 4.74% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Total income 24,652 24,483 21,839 19,596 18,601 Stanbic Bank branches will accept teller ADVANCES INCOME Expenses 2.43% deposits for float purchases and have a 1.78% Interest on deposits 3,745 3,699 3,301 2,228 2,191 0.83% 0.79% Interest on borrowed funds, deposits and placements from other banks 1,739 1,959 1,352 497 87 dedicated teller/queue for Mpesa Agents. Other interest expense 521 685 838 532 547 2013 2014 2015 2016 2017 Total interest expense 6,005 6,343 5,491 3,257 2,825 Total assets increased by 17% from KSh General administrative expenses 6,557 6,161 5,715 5,184 4,697 Other operating expenses 3,730 2,957 2,556 2,960 3,220 204 billion in 2016 to KSh 239 billion in Balance Sheet (KSh Billions) Total operating expenses 10,287 9,118 8,271 8,145 7,917 2017.Customer deposits increased by CORE CAPITAL/TOTAL DEPOSIT LIABILITY Total expenditure 16,291 15,461 13,762 11,401 10,742 25% from KSh 122 billion in 2016 to KSh 2017 2016 2015 Operating profits before provisions 8,360 9,022 8,077 8,195 7,859 153 billion in 2017.Loans and advances Losses on loans and advances 2,761 1,836 1,001 803 854 also increased by 13% from KSh115 Profits Before Tax (after exceptional Items) 5,599 7,186 7,076 7,391 7,004 billion in 2016 to KSh 130 billion in 2017. DISCLOSURES (KSH IN MILLIONS) 13.40% 11.82% Interest on loans and advances remained 10.64% 10.00% 10.56% 270.1 Total provisions (Loan loss provision and interest in suspense) 4,908 2,895 1,959 1,449 1,225 244.1 Non-performing loans Net of provisions & suspended interest 5,451 4,118 2,899 1,921 829 constant at KSh 12.1 billion in 2017.Net 190.9 190.5 Total Non-performing loans (Net of interest in suspense) 8,695 5,835 4,170 3,024 1,785 interest income also slightly decreased by 169.6 Realisable value of securities 5,451 4,118 2,899 1,921 829 2% from KSh 10.8 billion in 2016 to KSh 2013 2014 2015 2016 2017 148.5 136.7 126.2 125.8 Net NPL exposure - - - - - 10.6 billion in 2017.The bank registered Total Insider Loans 5,915 4,448 5,259 4,448 4,159 a decrease in net profit by 22% from Core Capital 31,765 28,591 25,881 24,308 21,210 KSh7.2 billion in 2016 to KSh 5.6 billion Supplementary Capital 3,125 3,985 4,470 4,942 3,347 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 34,890 32,576 30,351 29,250 24,557 in 2017. Total non-performing loans Quick Assets 91,717 68,516 78,187 77,150 54,060 increased by 49% from KSh 5.8 billion in Total risk weighted assets 206,090 179,751 162,284 138,735 119,641 2016 to KSh 8.7 billion in 2017. 3.32% 3.09% SELECTED PERFORMANCE RATIOS (IN %) 2.66% 2.55% 2.00% Total liabilities/ Total assets 86.19 85.24 85.77 84.45 86.91 Shareholders’ funds/ Total assets 13.81 14.76 14.23 15.55 13.09 Total income/ Total assets 10.30 11.95 11.00 11.44 10.90 2013 2014 2015 2016 2017 Profitability (KSh Billions) Net interest margin/ Total assets 4.42 5.26 4.62 4.32 3.16 Net advances/ Total assets 54.52 56.41 51.15 51.56 40.49 2017 2016 2015 Total deposits/ Total assets 74.64 75.54 71.15 67.51 67.47 Gov. securities & placement with other banks/Total assets 34.95 29.23 33.69 39.47 26.15 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total deposits 34.89 29.96 30.05 39.08 19.91 Gov. securities & cash and balances with CBK/Total advances 55.73 44.54 46.74 63.98 34.93 Total advances/ Total deposits 75.80 76.55 73.28 77.62 61.08 25.6 24.8 3.50% Shareholders’ funds/ Total deposits 18.50 19.54 20.00 23.03 19.41 Average Cost of Funds (COF) 2.95 3.51 3.15 2.23 1.88 3.26% 18.0 16.9 16.9 3.18% Cost Income Ratio (CIR) 55.17 50.26 50.59 53.04 57.96 3.14% 13.3 3.03% 11.9 11.0 Gross Non-Performing Loans/ Total loans & advances 7.65 5.92 4.69 3.75 2.92 8.9 8.2 7.1 7.4 Loans Loss Provisions/ Operating income 17.39 9.46 7.78 7.18 7.00 Core capital/ Total deposit liabilities 17.78 18.47 18.32 21.01 18.41 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 15.41 15.91 15.95 17.52 17.73 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Quick assets / Total liabilities 44.45 39.23 45.90 53.32 36.44 Quick assets / Total deposit liabilities 51.33 44.27 55.34 66.69 46.93 194 BANKING SURVEY | 2018 BANKING SURVEY | 2018 195 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier I Directors Contacts Financial Snapshot Commercial Bank of Africa 2017 2016 2015 2014 2013 Strategic Focus Charles Mudiwa- CEO P.O. Box 72833 - 00200, Nairobi Total Assets (Ksh in 'billions') 239.4 BALANCE SHEET (KSH IN MILLIONS) Telephone: +254-20-3638000/11/17, Core Capital (Ksh in 'billions') 31.8 Total Assets 229,525 210,877 198,484 175,809 124,882 Fax: +254-20-3752901/7 Profit Before Tax (Ksh in 'thousands') 5.6 Total Liabilities 197,954 183,407 175,776 157,952 111,133 Commercial Bank of Africa is the largest Email: [email protected] Non Perfoming Loans/Total Loans 6.4 Net Assets (Shareholders' Funds) 31,571 27,470 22,708 17,857 13,749 privately-owned bank in Kenya, its Tier Ranking 8 Customer Deposits 178,378 159,284 148,537 122,044 90,993 Website: www.cfcstanbicbank.co.ke Return on Assets (%) 2.3 primary focus is Corporate, Institutional Overall Ranking 13 Other Deposits 8,065 13,762 17,685 27,089 16,095 Core Capital/Total Deposit Liability (%) 16.9 and Personal Banking. It seeks to provide Total Deposits 186,443 173,046 166,222 149,134 107,087 Return on Capital Employed (%) 17.8 Loans and advances to customers (net of provisions) 101,410 100,314 103,520 89,362 57,180 a comfortable, elegant and secure Total loans and advances to customers 107,038 105,080 107,683 92,667 59,251 environment for corporate clients, Cash and balances with CBK 20,366 25,145 14,881 9,713 11,255 institutional clients, foreign missions LOAN LOSS PROVISION / OPERATING INCOME Kenya government securities 57,798 47,427 42,672 27,857 45,811 and NGOs to transact their financial Balance Sheet (KSh Billions) Placements with other banks 23,460 14,524 12,724 9,573 14,336 business. To enhance its consumer PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) banking division, the bank launched 17.39% 2017 2016 2015 Income a new consumer banking application Interest on loans and advances 10,038 11,438 11,240 8,098 5,712 7.00% 7.18% 7.78% 9.46% Interest on government securities 6,155 5,957 5,126 4,101 3,576 called Loop at a time when many in Interest on placements and bank balances 483 457 208 241 179 the banking sector are rolling out 2013 2014 2015 2016 2017 Other Interest Income 105 68 149 22 8 comprehensive apps. 239.4 Total Interest Income 16,780 17,920 16,722 12,462 9,475 204.9 198.6 Net Interest Income 7,938 8,246 6,575 9,206 6,650 Foreign exchange gain (loss) 2,204 2,187 1,705 1,381 1,420 The net profit for the company declined 153.0 by 5% from KSh 7.6 billion in 2016 to 130.5 Fees and Commissions Income (net) 7,153 6,789 4,854 2,682 1,862 NON PERFORMING LOANS / TOTAL LOANS 122.0 115.6 108.1 101.6 Other operating Income 77 116 183 357 333 KSh 7.2 billion recorded in 2017.Total Total net operating income 17,455 17,405 13,317 13,626 10,265 assets grew by 9% from KSh 210 billion 7.65% Total income 26,297 27,079 23,463 16,882 13,090 in 2016 to KSh 229 billion posted in 2017. 5.92% Expenses 4.69% TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Customer deposits also increased by 12% 2.92% 3.75% Interest on deposits 7,368 7,783 8,857 5,388 3,395 Interest on borrowed funds, deposits and placements from other banks 573 990 394 900 569 to KSh 178 billion in 2017 as compared to Other interest expense 900 901 895 - - KSh 159 billion recorded in 2016.Interest 2013 2014 2015 2016 2017 Total interest expense 8,842 9,674 10,146 6,288 3,964 on loans and advances declined by 12% General administrative expenses 4,608 3,973 3,720 3,077 2,757 from KSh 11 billion in 2016 to KSh 10 Other operating expenses 3,509 2,467 1,927 2,025 1,509 billion in 2017.There was a 4% decline Profitability (KSh Billions) Total operating expenses 8,118 6,440 5,646 5,102 4,265 on net interest income to KSh 7.9 billion Total expenditure 16,959 16,114 15,793 11,390 8,229 CORE CAPITAL/TOTAL DEPOSIT LIABILITY in 2017 from KSh 8.2 billion recorded 2017 2016 2015 Operating profits before provisions 9,337 10,965 7,670 5,493 4,860 Losses on loans and advances 2,148 3,372 1,436 971 397 in 2016.Total non- performing loans Profits Before Tax (after exceptional Items) 7,189 7,593 6,234 4,522 4,463 remained constant at KSh 6.1 billion in 21.01% DISCLOSURES (KSH IN MILLIONS) 2017. 18.6 18.1 18.41% 18.32% 18.47% 16.6 17.1 16.3 Total provisions (Loan loss provision and interest in suspense) 5,628 4,766 4,163 3,305 2,071 17.78% 14.7 Non-performing loans Net of provisions & suspended interest 2,170 2,682 560 466 309 Total Non-performing loans (Net of interest in suspense) 6,106 6,159 3,965 3,060 1,917 2013 2014 2015 2016 2017 Realisable value of securities 2,096 2,614 560 466 309 Net NPL exposure 73 68 - - - 7.2 7.1 6.3 5.6 6.0 5.5 Total Insider Loans 7,454 6,590 6,471 6,471 6,655 Core Capital 20,394 19,048 17,099 13,779 10,378 Supplementary Capital 5,736 6,751 8,102 7,926 548 RETURN ON AVERAGE ASSETS PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING INCOME EXPENSES INCOME Total Capital 26,130 25,799 25,201 21,705 10,927 Quick Assets 101,625 87,096 70,277 47,143 71,402 4.61% 4.32% Total risk weighted assets 150,898 139,839 140,604 121,180 81,060 3.83% 3.56% 2.52% SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 86.25 86.97 88.56 89.84 88.99 Shareholders' funds/ Total assets 13.75 13.03 11.44 10.16 11.01 2013 2014 2015 2016 2017 Income & Expenses (KSh Billions) Total income/ Total assets 11.46 12.84 11.82 9.60 10.48 Net interest margin/ Total assets 3.46 3.91 3.31 5.24 5.33 2017 2016 2015 Net advances/ Total assets 44.18 47.57 52.16 50.83 45.79 Total deposits/ Total assets 81.23 82.06 83.75 84.83 85.75 Gov. securities & placement with other banks/Total assets 35.40 29.38 27.91 21.29 48.16 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total deposits 34.05 34.41 29.00 21.37 45.70 Gov. securities & cash and balances with CBK/Total advances 54.00 45.13 39.63 30.06 77.32 12.1 12.1 Total advances/ Total deposits 57.41 60.72 64.78 62.14 55.33 3.66% 10.5 3.45% 3.16% Shareholders' funds/ Total deposits 16.93 15.87 13.66 11.97 12.84 Average Cost of Funds (COF) 4.08 4.85 5.34 4.03 3.70 2.02% 2.24% Cost Income Ratio (CIR) 46.51 37.00 42.40 37.44 41.55 Gross Non-Performing Loans/ Total loans & advances 7.29 7.09 4.39 4.07 4.02 3.5 2.5 2.6 0.3 0.3 1.3 Loans Loss Provisions/ Operating income 22.55 19.98 25.57 19.04 15.66 Core capital/ Total deposit liabilities 10.94 11.01 10.29 9.24 9.69 INCOME & EXPENSES INTEREST ON LOANS & FEES AND COMMISSIONS 2013 2014 2015 2016 2017 Core capital/ Total risk weighted assets 13.52 13.62 12.16 11.37 12.80 ADVANCES INCOME Quick assets / Total liabilities 51.34 47.49 39.98 29.85 64.25 Quick assets / Total deposit liabilities 54.51 50.33 42.28 31.61 66.68 196 BANKING SURVEY | 2018 BANKING SURVEY | 2018 197 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier I NIC Bank 2017 2016 2015 2014 2013 Strategic Focus Directors Contacts Financial Snapshot BALANCE SHEET (KSH IN MILLIONS) Jeremy Ngunze-CEO P.O. Box 30437 - 00100, Nairobi Total Assets (Ksh in 'billions') 229.5 Total Assets 192,817 161,847 156,762 137,087 112,917 Telephone: +254-20-2884000, 2734555, Core Capital (Ksh in 'billions') 20.4 Total Liabilities 163,879 131,559 130,307 113,829 95,286 National Industrial Credit Bank Limited 0711056000, Profit Before Tax (Ksh in 'thousands') 7.2 Net Assets (Shareholders' Funds) 28,938 30,288 26,455 23,258 17,631 was incorporated in Kenya in 1957 and Fax: +254-20-2734599 Non Perfoming Loans/Total Loans 5.7 Customer Deposits 130,561 104,160 105,194 92,791 84,236 obtained its Commercial banking license Other Deposits 11,445 2,628 7,734 4,625 4,910 Tier Ranking 7 Email: [email protected] Return on Assets (%) 3.1 in 1995.In 1997 National Industrial Credit Total Deposits 142,006 106,788 112,928 97,416 89,146 Website: www.cbagroup.com Core Capital/Total Deposit Liability (%) 22.8 Overall Ranking 12 Loans and advances to customers (net of provisions) 112,322 107,097 107,868 94,424 77,114 Bank merged with African Mercantile Return on Capital Employed (%) 10.9 Total loans and advances to customers 118,459 112,509 111,285 99,450 81,054 Bank Limited and renamed to NIC bank Cash and balances with CBK 8,143 5,946 7,291 10,106 7,045 in 2005 which later developed in a one Kenya government securities 51,495 27,287 25,012 16,457 15,946 stop shop for financial services. NIC Bank LOAN LOSS PROVISION / OPERATING INCOME Placements with other banks 11,434 9,219 5,464 7,844 4,189 Group reported a pre-tax profit of KES Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) 2.92 billion, for the first half of 2017, Income 25.57% compared to KES 3.22 billion the prior 22.55% 2017 2016 2015 Interest on loans and advances 12,203 14,213 12,907 10,380 8,592 19.04% 19.98% Interest on government securities 4,720 3,214 2,340 1,785 1,568 year. This marked a 9.3% year on year 15.66% Interest on placements and bank balances 67 82 261 212 153 decline, driven by a reduction in lending Other Interest Income - - - - - margins as a result of the Banking Total Interest Income 16,990 17,510 15,508 12,376 10,313 11.4 Amendment (2016) Act (“Rate Cap”), 11.2 Net Interest Income 9,851 11,180 8,847 7,280 6,534 2013 2014 2015 2016 2017 10.0 which came into effect in September Foreign exchange gain (loss) 1,093 1,030 1,257 1,040 1,018 2016.Total assets increased to KES 189.5 7.2 6.8 Fees and Commissions Income (net) 2,080 1,828 1,671 1,356 1,136 Other operating Income 471 634 493 591 465 billion, a 12.1% year on year increase 4.9 NON PERFORMING LOANS / TOTAL LOANS Total net operating income 13,495 14,673 12,268 10,266 9,154 from KES 169.1 billion the previous year. 0.5 0.5 0.2 Total income 20,634 21,002 18,929 15,363 12,933 The Bank’s total liabilities closed at KES Expenses INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS 156.9 billion driven by a strong growth 7.29% 7.09% ADVANCES INCOME Interest on deposits 5,537 4,987 5,406 4,567 3,535 in customer deposits. Customer deposits Interest on borrowed funds, deposits and placements from other banks 290 196 171 163 123 4.02% 4.07% 4.39% increased by 18.9% during the period. Other interest expense 1,312 1,147 1,084 366 121 Total interest expense 7,139 6,330 6,661 5,097 3,779 The increase in customer deposits saw the Bank’s loan to deposit ratio reduce 2013 2014 2015 2016 2017 General administrative expenses 3,287 3,369 3,040 2,618 2,399 Other operating expenses 1,752 1,666 1,429 1,272 1,055 to 88%, down from 100% a year earlier. Balance Sheet (KSh Billions) Total operating expenses 5,039 5,035 4,469 3,890 3,454 The Bank’s liquidity levels as at the end of Total expenditure 12,178 11,365 11,130 8,986 7,233 June 2017 stood at 45.6%. CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions 8,456 9,637 7,799 6,377 5,700 2017 2016 2015 Losses on loans and advances 2,780 3,712 1,539 295 479 Profits Before Tax (after exceptional Items) 5,676 5,926 6,260 6,081 5,221 The net profit for 2017 declined by 4% 11.01% 10.94% DISCLOSURES (KSH IN MILLIONS) to KSh 5.7 billion compared to KSh 5.9 10.29% Total provisions (Loan loss provision and interest in suspense) 6,137 5,412 3,417 5,026 3,940 229.5 billion recorded in 2016.Total assets 9.69% Non-performing loans Net of provisions & suspended interest 7,128 7,238 9,776 942 1,142 9.24% 210.9 increased by 19% from KSh 161 in 2016 198.5 Total Non-performing loans (Net of interest in suspense) 12,050 11,966 12,165 3,244 3,139 178.4 to KSh 192 billion in 2017.Customer 159.3 Realisable value of securities 7,128 7,238 9,776 942 1,142 148.5 deposits grew by 25% to KSh 130 billion 2013 2014 2015 2016 2017 Net NPL exposure - - - - - 101.4 100.3 103.5 Total Insider Loans 2,821 2,431 1,987 2,665 1,915 in 2017 as compared to KSh 104 billion Core Capital 27,652 25,380 21,529 18,826 14,108 posted in 2016.Loans and advances Supplementary Capital 5,313 6,504 8,827 8,514 768 increased by 5% from KSh 107 billon in RETURN ON AVERAGE ASSETS Total Capital 32,964 31,883 30,356 27,340 14,876 2016 to KSh 112 billion in 2017.Interest TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Quick Assets 71,072 42,451 37,767 34,407 27,181 on loans and advances declined by 14% Total risk weighted assets 165,647 147,419 148,255 131,045 95,220 from KSh 14 billon to KSh 12 billion 3.96% 3.71% SELECTED PERFORMANCE RATIOS (IN %) 3.33% 3.01% 3.26% Total liabilities/ Total assets 84.99 81.29 83.12 83.03 84.39 recorded in 20116,Net interest income Shareholders' funds/ Total assets 15.01 18.71 16.88 16.97 15.61 declined by 12% from KSh 11 billion Total income/ Total assets 10.70 12.98 12.07 11.21 11.45 recorded in 2016 to KSh 9 billon. Total Profitability (KSh Billions) Net interest margin/ Total assets 5.11 6.91 5.64 5.31 5.79 non-performing loans slightly grew by Net advances/ Total assets 58.25 66.17 68.81 68.88 68.29 1% from KSh 11 billon in 2016 to KSh 12 2013 2014 2015 2016 2017 Total deposits/ Total assets 73.65 65.98 72.04 71.06 78.95 2017 2016 2015 billon in 2017. Gov. securities & placement with other banks/Total assets 32.64 22.56 19.44 17.73 17.83 Gov. securities & cash and balances with CBK/Total deposits 30.93 20.53 20.61 19.38 20.36 Gov. securities & cash and balances with CBK/Total advances 43.47 24.25 22.48 16.55 19.67 AVERAGE COST OF FUNDS Total advances/ Total deposits 83.42 105.36 98.55 102.09 90.92 17.9 17.5 17.4 16.8 16.7 Shareholders' funds/ Total deposits 20.38 28.36 23.43 23.87 19.78 5.62% 13.3 Average Cost of Funds (COF) 3.66 4.12 4.39 4.25 3.94 4.78% 4.95% Cost Income Ratio (CIR) 37.34 34.32 36.43 37.89 37.73 4.09% 4.23% 10.1 8.8 9.7 Gross Non-Performing Loans/ Total loans & advances 11.20 11.24 11.86 6.00 6.27 7.2 7.6 6.2 Loans Loss Provisions/ Operating income 36.48 32.22 19.47 22.42 21.81 Core capital/ Total deposit liabilities 19.47 23.77 19.06 19.33 15.83 Core capital/ Total risk weighted assets 16.69 17.22 14.52 14.37 14.82 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Quick assets / Total liabilities 43.37 32.27 28.98 30.23 28.53 INCOME EXPENSES INCOME 2013 2014 2015 2016 2017 Quick assets / Total deposit liabilities 50.05 39.75 33.44 35.32 30.49 198 BANKING SURVEY | 2018 BANKING SURVEY | 2018 199 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier I Directors Contacts Financial Snapshot I&M Bank 2017 2016 2015 2014 2013 Strategic Focus John Gachora-MD & CEO P.O. Box 44599 - 00100, Nairobi Total Assets (Ksh in 'billions') 192.8 BALANCE SHEET (KSH IN MILLIONS) Telephone: +254-20-2888000, 2888600, 4849000, Core Capital (Ksh in 'billions') 27.7 Total Assets 183,953 164,116 147,846 137,299 110,316 0711141000, 0732041000 Profit Before Tax (Ksh in 'thousands') 5.7 Total Liabilities 148,929 132,811 121,660 115,484 89,791 I&M Bank is a wholly owned subsidiary Net Assets (Shareholders’ Funds) 35,024 31,305 26,187 21,815 20,525 Fax: +254-20-2888505/13 Non Perfoming Loans/Total Loans 10.2 of I&M Holdings Limited, a publicly Customer Deposits 132,801 116,979 103,741 86,621 74,594 Tier Ranking 10 Email: [email protected] Return on Assets (%) 2.9 quoted company at the Nairobi Securities Other Deposits 1,446 3,610 3,835 13,720 2,113 Overall Ranking 16 Website: www.nic-bank.com Core Capital/Total Deposit Liability (%) 19.6 Total Deposits 134,247 120,589 107,576 100,341 76,707 Exchange (NSE). The bank possesses a Return on Capital Employed (%) 19.5 Loans and advances to customers (net of provisions) 120,657 106,586 102,188 89,866 73,370 rich heritage in banking. Started in 1974, Total loans and advances to customers 126,983 110,967 104,302 91,163 74,085 it evolved from a community financial Cash and balances with CBK 7,037 6,660 5,878 7,600 6,152 institution to a publicly listed major Kenya government securities 41,218 38,441 31,007 32,273 12,146 regional commercial bank offering a full LOAN LOSS PROVISION / OPERATING INCOME Placements with other banks 2,544 2,730 2,183 568 1,620 Income & Expenses (KSh Billions) range of corporate and retail banking PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) services. From June 2013, I&M Bank 2017 2016 2015 Income shares are publicly traded in the Nairobi 20.27% Interest on loans and advances 15,057 15,722 14,461 11,627 9,324 17.90% Interest on government securities 4,474 4,198 3,322 2,368 1,999 Stock Exchange through the acquisition 12.46% 12.12% 10.82% 14.2 Interest on placements and bank balances 32 40 140 87 67 of its entire shareholding by I&M 12.9 Other Interest Income 41 41 49 62 97 12.2 Holdings Ltd, a publicly listed company. Total Interest Income 19,603 20,000 17,971 14,144 11,488 Net Interest Income 12,427 12,545 10,061 8,309 6,953 2013 2014 2015 2016 2017 Foreign exchange gain (loss) 1,373 1,206 1,050 629 535 I&M Bank Group is a major financial Fees and Commissions Income (net) 2,432 2,004 1,798 1,680 1,497 institution operating in the whole of Other operating Income 303 366 266 1,240 214 2.1 1.8 1.7 0.1 0.1 0.3 Eastern Africa, and headquartered in NON PERFORMING LOANS / TOTAL LOANS Total net operating income 16,567 16,259 13,176 11,859 9,198 Kenya. The bank is among the best Total income 23,743 23,714 21,085 17,693 13,733 INTEREST ON LOANS & FEES ADVANCES AND COMMISSIONS INCOME INTEREST ON DEPOSITS performing banks because it holds huge Expenses 6.59% 6.25% 6.22% Interest on deposits 6,297 6,475 6,873 4,899 4,097 assets and great shareholders’ equity Interest on borrowed funds, deposits and placements from other banks 175 220 228 103 185 3.48% 3.33% Other interest expense 704 761 809 832 252 The net profit declined by 13% in 2017 Total interest expense 7,176 7,455 7,910 5,835 4,535 to KSh 7.5 billion compared to KSh General administrative expenses 3,468 3,174 2,863 2,294 1,957 2013 2014 2015 2016 2017 Other operating expenses 1,731 1,656 1,392 1,070 901 8.6 billion posted in 2016.Total assets Balance Sheet (KSh Billions) Total operating expenses 5,199 4,830 4,256 3,363 2,857 grew by 12% in 2017 to KSh 183 billion Total expenditure 12,374 12,285 12,166 9,198 7,392 compared to KSh 164 billion recorded in Operating profits before provisions 11,368 11,429 8,920 8,496 6,341 CORE CAPITAL/TOTAL DEPOSIT LIABILITY 2017 2016 2015 2016.Customer deposits increased by 14% Losses on loans and advances 3,853 2,779 553 747 379 in 2017 to KSh 132 billion compared to Profits Before Tax (after exceptional Items) 7,515 8,650 8,367 7,749 5,962 KSh 116 billion recorded in 2016.Loans 13.20% DISCLOSURES (KSH IN MILLIONS) and advances increased by 13% from 10.74% 10.59% 10.82% Total provisions (Loan loss provision and interest in suspense) 6,326 4,381 2,114 1,297 716 8.79% 192.8 Non-performing loans Net of provisions & suspended interest 11,342 3,835 2,958 616 345 KSh 106 billion in 2016 to KSh 120 billion 161.8 156.8 Total Non-performing loans (Net of interest in suspense) 15,445 6,051 4,085 1,408 705 in 2017.Interest on loans and advances 130.6 Realisable value of securities 11,342 3,835 2,958 616 345 declined by 4%in 2017 to KSh15.1 112.3 107.9 104.2 105.2 107.1 Net NPL exposure - - - - - billion compared to KSh 15.7 billion Total Insider Loans 3,466 2,888 1,749 2,507 2,538 recorded in 2016. Net interest income 2013 2014 2015 2016 2017 Core Capital 29,790 24,685 23,559 19,122 14,700 slightly declined by 1% from KSh 12.5 Supplementary Capital 2,437 2,249 2,985 3,741 3,848 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 32,227 26,934 26,544 22,863 18,548 billion in 2016 to KSh12.4 in 2016.Total RETURN ON AVERAGE ASSETS Quick Assets 50,799 47,831 39,067 40,441 19,918 non-performing loans greatly increased Total risk weighted assets 173,455 148,383 142,082 121,260 97,526 by 155% in 2107 to KSh 15.4 billion 2.70% 2.70% SELECTED PERFORMANCE RATIOS (IN %) compared to KSh 6.1 billion recorded in 2.37% 2.07% Total liabilities/ Total assets 80.96 80.93 82.29 84.11 81.39 2016. 1.78% Shareholders’ funds/ Total assets 19.04 19.07 17.71 15.89 18.61 Total income/ Total assets 12.91 14.45 14.26 12.89 12.45 Net interest margin/ Total assets 6.76 7.64 6.81 6.05 6.30 Profitability (KSh Billions) Net advances/ Total assets 65.59 64.95 69.12 65.45 66.51 2013 2014 2015 2016 2017 Total deposits/ Total assets 72.98 73.48 72.76 73.08 69.53 2017 2016 2015 Gov. securities & placement with other banks/Total assets 23.79 25.09 22.45 23.92 12.48 Gov. securities & cash and balances with CBK/Total deposits 26.23 27.48 24.95 29.04 16.59 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 32.46 34.64 29.73 35.40 16.39 Total advances/ Total deposits 94.59 92.02 96.96 90.85 96.58 17.5 17.0 Shareholders’ funds/ Total deposits 26.09 25.96 24.34 21.74 26.76 15.5 14.7 13.5 Average Cost of Funds (COF) 4.50 5.13 5.92 4.38 4.89 2.60% 12.3 2.58% Cost Income Ratio (CIR) 31.38 29.71 32.30 28.36 31.06 Gross Non-Performing Loans/ Total loans & advances 13.91 7.40 4.86 2.10 1.43 7.1 6.7 2.30% 2.28% 2.27% 5.7 5.9 6.3 6.3 Loans Loss Provisions/ Operating income 24.77 13.63 8.55 6.68 3.92 Core capital/ Total deposit liabilities 22.19 20.47 21.90 19.06 19.16 PROFIT BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 17.17 16.64 16.58 15.77 15.07 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total liabilities 34.11 36.01 32.11 35.02 22.18 Quick assets / Total deposit liabilities 37.84 39.66 36.32 40.30 25.97 200 BANKING SURVEY | 2018 BANKING SURVEY | 2018 201 INDIVIDUAL BANKS INDIVIDUAL BANKS Tier I - Aggregate Directors Contacts Financial Snapshot Aggregate Tier I 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) P.O. Box 30238 - 00100, Nairobi Total Assets (Ksh in 'billions') 184.0 Mr. Kihara Maina- MD Total Assets 3,017,453 2,730,153 2,516,522 2,147,246 1,850,891 Telephone: +254-20-2711994/8, 3221200/2, Core Capital (Ksh in 'billions') 29.8 Total Liabilities 2,538,598 2,295,044 2,124,658 1,799,000 1,540,935 322100, Profit Before Tax (Ksh in 'thousands') 7.5 Net Assets (Shareholders' Funds) 478,855 435,109 391,865 348,246 309,956 Fax: +254-20-2713757 / 2716372 Non Perfoming Loans/Total Loans 12.2 Customer Deposits 2,209,245 1,959,415 1,777,246 1,514,134 1,306,561 Tier Ranking 9 Email: [email protected] Return on Assets (%) 4.1 Other Deposits 86,847 84,274 93,265 82,410 68,828 Overall Ranking 15 Website: www.imbank.com Core Capital/Total Deposit Liability (%) 21.5 Total Deposits 2,296,091 2,043,689 1,870,510 1,596,544 1,375,389 Return on Capital Employed (%) 22.2 Loans and advances to customers (net of provisions) 1,762,921 1,661,594 1,546,664 1,320,010 1,087,574 Total loans and advances to customers 1,854,146 1,733,051 1,593,063 1,357,959 1,116,816 Cash and balances with CBK 164,461 157,167 175,627 141,083 119,622 Kenya government securities 756,406 622,394 472,413 417,018 346,846 LOAN LOSS PROVISION / OPERATING INCOME Placements with other banks 100,596 75,496 86,979 74,026 74,018 Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income 14.57% 2017 2016 2015 Interest on loans and advances 203,868 221,268 201,938 167,135 144,670 8.02% Interest on government securities 76,267 65,203 45,484 40,086 36,706 2.30% 3.93% 5.03% Interest on placements and bank balances 2,564 3,628 4,430 2,323 2,486 Other Interest Income 1,119 2,474 1,714 1,703 1,758 2013 2014 2015 2016 2017 Total Interest Income 283,819 292,573 253,566 211,247 185,620 15.7 15.1 Net Interest Income 196,039 205,573 169,903 155,017 141,238 12.9 Foreign exchange gain (loss) 22,724 20,229 18,520 15,354 15,843 Fees and Commissions Income (net) 59,706 54,125 53,169 48,929 42,178 NON PERFORMING LOANS / TOTAL LOANS Other operating Income 9,324 11,106 8,790 14,910 7,998 2.4 1.8 1.7 0.0 0.1 0.3 Total net operating income 287,978 291,296 250,381 234,210 207,257 Total income 375,830 378,369 334,045 290,440 251,639 8.18% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses ADVANCES INCOME Interest on deposits 73,929 73,109 70,948 46,650 37,373 4.36% 2.86% Interest on borrowed funds, deposits and placements from other banks 5,410 5,481 5,064 3,972 3,535 0.84% 1.23% Other interest expense 8,441 8,410 7,651 5,609 3,474 Total interest expense 87,780 87,000 83,663 56,230 44,382 2013 2014 2015 2016 2017 General administrative expenses 88,381 83,626 75,931 70,604 65,402 Other operating expenses 46,507 45,015 40,278 38,651 33,509 Balance Sheet (KSh Billions) Total operating expenses 134,888 128,641 116,209 109,254 98,911 Total expenditure 222,667 215,641 199,872 165,485 143,293 CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions 153,163 162,728 134,173 124,956 108,346 2017 2016 2015 Losses on loans and advances 32,382 32,010 18,229 11,327 9,312 Profits Before Tax (after exceptional Items) 120,781 130,718 115,943 113,629 99,033 12.88% 13.05% DISCLOSURES (KSH IN MILLIONS) 12.04% Total provisions (Loan loss provision and interest in suspense) 91,225 71,456 46,398 37,949 29,243 Non-performing loans Net of provisions & suspended interest 67,653 50,964 39,302 23,980 19,264 11.27% 11.21% 192.8 Total Non-performing loans (Net of interest in suspense) 133,280 105,560 73,517 51,397 41,126 161.8 156.8 Realisable value of securities 60,748 47,532 36,063 21,784 16,231 130.6 Net NPL exposure 6,905 3,432 3,239 2,196 3,033 2013 2014 2015 2016 2017 112.3 104.2 105.2 107.1 107.9 Total Insider Loans 72,715 73,661 64,653 57,975 51,977 Core Capital 409,366 365,906 328,977 294,848 249,856 Supplementary Capital 62,781 73,419 72,474 74,014 48,506 RETURN ON AVERAGE ASSETS Total Capital 472,147 439,325 401,451 368,862 298,362 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Quick Assets 1,021,463 855,057 735,019 632,127 540,486 Total risk weighted assets 2,587,474 2,345,776 2,199,484 1,898,658 1,485,661 SELECTED PERFORMANCE RATIOS (IN %) 3.48% 3.68% 3.45% 3.26% 2.54% Total liabilities/ Total assets 84.13 84.06 84.43 83.78 83.25 Shareholders' funds/ Total assets 15.87 15.94 15.57 16.22 16.75 Total income/ Total assets 12.46 13.86 13.27 13.53 13.60 2013 2014 2015 2016 2017 Profitability (KSh Billions) Net interest margin/ Total assets 6.50 7.53 6.75 7.22 7.63 Net advances/ Total assets 58.42 60.86 61.46 61.47 58.76 2017 2016 2015 Total deposits/ Total assets 76.09 74.86 74.33 74.35 74.31 Gov. securities & placement with other banks/Total assets 28.40 25.56 22.23 22.87 22.74 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total deposits 30.52 28.55 25.75 25.99 25.20 Gov. securities & cash and balances with CBK/Total advances 40.80 35.91 29.65 30.71 31.06 17.0 17.5 Total advances/ Total deposits 80.75 84.80 85.17 85.06 81.20 3.57% 15.5 14.7 Shareholders' funds/ Total deposits 20.86 21.29 20.95 21.81 22.54 3.12% 3.14% 13.5 2.92% 2.77% 12.3 Average Cost of Funds (COF) 3.27 3.59 3.79 2.97 2.83 Cost Income Ratio (CIR) 46.84 44.16 46.41 46.65 47.72 Gross Non-Performing Loans/ Total loans & advances 8.57 7.06 5.38 4.56 4.34 7.1 6.7 5.7 5.9 6.3 6.3 Loans Loss Provisions/ Operating income 22.79 17.30 13.08 11.17 10.35 Core capital/ Total deposit liabilities 17.83 17.90 17.59 18.47 18.17 Core capital/ Total risk weighted assets 15.82 15.60 14.96 15.53 16.82 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Quick assets / Total liabilities 40.24 37.26 34.59 35.14 35.08 Quick assets / Total deposit liabilities 44.49 41.84 39.30 39.59 39.30 202 BANKING SURVEY | 2018 BANKING SURVEY | 2018 203 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier II National Bank of Kenya 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) Strategic Focus LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) Total Assets 109,942 111,929 125,295 122,865 92,493 Total Liabilities 102,895 105,174 114,381 110,751 80,645 National Bank was incorporated on Net Assets (Shareholders' Funds) 7,048 6,755 10,914 12,114 11,848 19th June 1968 and officially opened 2017 2016 2015 Customer Deposits 94,544 93,892 110,622 104,734 77,993 on Thursday November 14th 1968. At the time it was fully owned by the 17.30% 22.79% Other Deposits 5,620 3,592 2,343 5,078 825 10.35% 11.17% 13.08% Total Deposits 100,164 97,484 112,966 109,811 78,818 Government. The objective for which Loans and advances to customers (net of provisions) 52,361 55,020 67,804 65,641 39,567 it was formed was to help Kenyans 221 2013 2014 2015 2016 2017 204 202 Total loans and advances to customers 68,153 67,265 72,841 68,093 41,367 get access to credit and control their Cash and balances with CBK 7,500 8,417 16,120 16,965 9,392 economy after independence. In 1994, Kenya government securities 35,708 34,546 27,083 30,091 27,401 the Government reduced its shareholding Placements with other banks 2,460 1,312 4,257 2,034 8,283 by 32% (40 Million Shares) to members PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) of the public. Again in May 1996, it NON PERFORMING LOANS / TOTAL LOANS 60 54 53 3 4 4 Income further reduced its Shareholding by 40 Interest on loans and advances 5,701 8,794 8,934 7,563 4,766 million Shares to the public. The current INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Interest on government securities 4,164 3,256 3,202 2,979 3,170 Shareholding now stands at National 8.57% ADVANCES INCOME Interest on placements and bank balances 97 51 112 155 171 Social Security Fund (NSSF) 48.06%, 7.06% 5.38% Other Interest Income - - - - 59 General Public – 29.44% and Kenya 4.34% 4.56% Total Interest Income 9,962 12,101 12,248 10,697 8,166 Government 22.5%. National Bank is a Net Interest Income 6,708 7,792 6,381 6,790 5,638 major player in Kenya’s banking industry. Foreign exchange gain (loss) 527 364 565 434 309 It is one of the largest banks in the 2013 2014 2015 2016 2017 Fees and Commissions Income (net) 1,378 1,372 2,052 1,998 1,555 country giving financial services to all Other operating Income 465 1,040 466 571 941 sectors of the economy. The bank will Total net operating income 9,080 10,568 9,464 9,794 8,444 continue to cover the financial landscape Total income 12,334 14,877 15,331 13,701 10,972 and respond positively to the needs of its Balance Sheet (KSh Billions) Expenses customers, shareholders and the economy CORE CAPITAL/TOTAL DEPOSIT LIABILITY Interest on deposits 2,941 3,518 5,129 3,621 2,376 besides offering traditional financial 2017 2016 2015 Interest on borrowed funds, deposits and placements from other banks 313 786 726 281 145 services and products. National Bank Other interest expense - 5 11 5 6 has taken a leading role in the issuance Total interest expense 3,254 4,309 5,867 3,907 2,528 and promotion of modern delivery 18.47% General administrative expenses 5,465 4,868 4,587 4,660 4,438 and payment systems. The Bank has 18.17% also been involved in the stock market 17.90% 17.83% 3,017 Other operating expenses 2,118 3,226 2,843 2,276 1,940 17.59% 2,730 Total operating expenses 7,583 8,094 7,430 6,937 6,377 playing multiple roles as an arranger, 2,517 Total expenditure 10,837 12,403 13,296 10,844 8,905 underwriter and placing agent. The Bank 2,209 1,959 Operating profits before provisions 1,497 2,474 2,035 2,857 2,067 is an appointed fiscal agent, registrar 1,777 1,763 and market-maker in the secondary 2013 2014 2015 2016 2017 1,662 1,547 Losses on loans and advances 757 2,415 3,719 525 288 Profits Before Tax (after exceptional Items) 740 59 (1,684) 2,332 1,779 market. National Bank operates one DISCLOSURES (KSH IN MILLIONS) subsidiary Company; Nat Bank Trustee Total provisions (Loan loss provision and interest in suspense) 15,792 12,246 5,038 2,452 1,800 and Investment Services Limited Non-performing loans Net of provisions & suspended interest 11,866 17,742 6,725 4,785 2,412 incorporated in Kenya on 21st July 1995 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES RETURN ON AVERAGE ASSETS Total Non-performing loans (Net of interest in suspense) 23,878 26,769 9,964 7,048 4,170 with a Share Capital of Ksh.10 Million. On Realisable value of securities 11,866 17,742 6,725 4,785 2,412 24th May 2013, the bank rebranded and Net NPL exposure - - - - - changed its logo and colours from the Total Insider Loans 4,747 4,232 4,994 4,964 4,733 predominately green to yellow. The new 5.70% 5.68% slogan is “Bank on Better.” This is a brand 4.97% 4.98% 4.20% Core Capital 3,503 5,626 9,784 10,343 10,312 Supplementary Capital 1,268 598 747 862 635 promise to customers, shareholders as Total Capital 4,771 6,225 10,531 11,206 10,947 well as stakeholders. 2013 2014 2015 2016 2017 Quick Assets 45,668 44,275 47,460 49,090 45,076 Total risk weighted assets 87,998 87,076 75,266 80,433 45,333 The bank net profit greatly increased Profitability (KSh Billions) SELECTED PERFORMANCE RATIOS (IN %) by 1159% in 2017 to KSh 740 million Total liabilities/ Total assets 93.59 93.97 91.29 90.14 87.19 compared to KSh 59 million posted in 2017 2016 2015 Shareholders' funds/ Total assets 6.41 6.03 8.71 9.86 12.81 2016.Total assets slightly declined by 2% AVERAGE COST OF FUNDS Total income/ Total assets 11.22 13.29 12.24 11.15 11.86 in 2017 to KSh 109 billion compared Net interest margin/ Total assets 6.10 6.96 5.09 5.53 6.10 to KSh 111 billion in 2016.In 2017 the Net advances/ Total assets 47.63 49.16 54.12 53.43 42.78 customer deposit was KSh 94 billion Total deposits/ Total assets 91.11 87.09 90.16 89.38 85.21 which is a 1% increase compared to KSh 284 293 288 291 254 Gov. securities & placement with other banks/Total assets 34.72 32.04 25.01 26.15 38.58 93 billon recorded in 2016.Loans and 4.10% 250 3.75% 3.44% Gov. securities & cash and balances with CBK/Total deposits 39.30 38.38 34.48 38.30 39.78 advances declined by 5% from KSh 55 3.00% 3.21% Gov. securities & cash and balances with CBK/Total advances 52.39 51.36 37.18 44.19 66.24 billion recorded in 2016 to KSh 52 billion Total advances/ Total deposits 68.04 69.00 64.48 62.01 52.48 recorded in 2017.Interest on loans and 121 131 116 88 87 84 Shareholders' funds/ Total deposits 7.04 6.93 9.66 11.03 15.03 advances declined by 35% from KSh 8.7 Average Cost of Funds (COF) 3.25 4.42 5.18 3.55 3.20 in 2016 to KSh 5.7 in 2017.Net interest PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Cost Income Ratio (CIR) 83.51 76.59 78.50 70.83 75.52 income declined by 14% in 2017 to KSh 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Total Non-Performing Loans/ Total loans & advances 40.58 44.58 16.15 10.63 10.18 6.7 compared to KSh 7.7 recorded in Loans Loss Provisions/ Operating income 132.29 85.42 34.22 23.11 20.82 2016.Total non -performing loan in 2017 Core capital/ Total deposit liabilities 3.50 5.77 8.66 9.42 13.08 were 23.8 billion which is a 11% decline Core capital/ Total risk weighted assets 3.98 6.46 13.00 12.86 22.75 compared to KSh 26.7 billion recorded Quick assets / Total liabilities 44.38 42.10 41.49 44.32 55.89 in 2016. Quick assets / Total deposit liabilities 45.59 45.42 42.01 44.70 57.19 204 BANKING SURVEY | 2018 BANKING SURVEY | 2018 205 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier II Directors Contacts Financial Snapshot Citibank N.A. Kenya 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Wilfred Musau-Ag MD P.O. Box 72866 - 00200, Nairobi Total Assets (Ksh in 'billions') 109.9 Total Assets 98,232 103,324 88,147 79,397 71,243 Telephone: +254-20-2828000, 0711038000 Core Capital (Ksh in 'billions') 3.5 Total Liabilities 78,055 83,695 68,740 61,039 55,279 Citibank N.A Kenya operates as a wholly Fax: +254-20-311444 / 2223044 Profit Before Tax (Ksh in 'thousands') 0.7 Net Assets (Shareholders' Funds) 20,177 19,629 19,407 18,358 15,964 owned subsidiary of the Citibank, Email: [email protected] Non Perfoming Loans/Total Loans 35.0 Customer Deposits 64,369 62,486 62,022 51,150 43,762 Tier Ranking 9 National Association, one of the leading Website: www.nationalbank.co.ke Return on Assets (%) 0.7 Other Deposits 1,092 1,020 2,796 6,378 3,847 Overall Ranking 38 international banking institutions Core Capital/Total Deposit Liability (%) 10.5 Total Deposits 65,461 63,506 64,818 57,528 47,608 headquartered in New York. The parent Return on Capital Employed (%) 3.5 Loans and advances to customers (net of provisions) 37,187 27,437 26,629 24,012 24,338 Total loans and advances to customers 38,080 28,242 27,683 24,541 24,775 bank, is the consumer banking arm of Cash and balances with CBK 8,207 6,948 9,781 9,329 5,889 international financial services provider Kenya government securities 35,468 39,551 28,277 27,899 26,841 giant Citigroup Inc. which has operations Placements with other banks 1,943 3,168 3,466 7,247 4,013 LOAN LOSS PROVISION / OPERATING INCOME in over 100 countries across the world. Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income Currently the lender is one of the banks 2017 2016 2015 which has signed an agreement with the 69.63% Interest on loans and advances 2,422 2,302 2,359 2,474 2,227 44.96% Interest on government securities 3,766 4,678 3,440 3,071 2,939 Kenyan government to improve the local 10.96% 12.16% 18.01% Interest on placements and bank balances 248 298 1,367 313 353 currency. Other Interest Income 15 34 35 92 111 8.9 2013 2014 2015 2016 2017 8.8 Total Interest Income 6,451 7,311 7,201 5,949 5,630 Net Interest Income 5,419 6,200 5,680 4,524 4,196 The net profit increased by 5% in 2017 5.7 Foreign exchange gain (loss) 1,893 1,423 1,618 1,609 1,880 to KSh 6.3 billion compared to KSh 6.0 Fees and Commissions Income (net) 1,556 1,329 1,228 1,144 1,145 billion recorded in 2016. Total assets NON PERFORMING LOANS / TOTAL LOANS Other operating Income 649 31 183 111 357 declined by 5% from KSh 103 billon Total net operating income 9,516 8,983 8,708 7,387 7,577 1.4 1.4 2.1 0.1 0.1 0.1 recorded in 2016 to KSh 98 billion in Total income 10,549 10,095 10,230 8,812 9,011 2017.Loans and advances increased INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses by36% in 2017 to KSh 37 billion 23.46% 21.36% ADVANCES INCOME Interest on deposits 859 985 1,366 1,313 1,300 Interest on borrowed funds, deposits and placements from other banks 171 115 80 96 92 compared to KSh 27 billion in 2016. 8.50% 5.36% 5.59% Other interest expense 3 11 75 16 42 Interest on loans and advances increased Total interest expense 1,033 1,111 1,521 1,425 1,434 by 5% from KSh 2.3 billion in 2016 to KSh 2013 2014 2015 2016 2017 General administrative expenses 1,835 2,283 1,771 1,647 1,537 2.4 billion in 2017.Net interest income Other operating expenses 1,275 762 1,018 1,525 - decreased by 13% to KSh 5.4 billion Total operating expenses 3,109 3,045 2,789 3,172 1,537 Balance Sheet (KSh Billions) Total expenditure 4,142 4,156 4,310 4,597 2,971 in 2017 compared to KSh 6.2 billion CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions 6,407 5,938 5,919 4,215 6,040 recorded in 2016. Total non -performing 2017 2016 2015 Losses on loans and advances 35 (95) 342 70 1,056 loans greatly increased by 160% from Profits Before Tax (after exceptional Items) 6,373 6,033 5,578 4,145 4,984 KSh 527 million recorded in 2016 to KSh DISCLOSURES (KSH IN MILLIONS) 1.3 billion recorded in 2017. 6.89% Total provisions (Loan loss provision and interest in suspense) 892 805 1,054 529 437 125.3 4.96% 4.56% Non-performing loans Net of provisions & suspended interest 831 - 713 352 - 3.04% 109.9 111.9 110.6 Total Non-performing loans (Net of interest in suspense) 1,369 527 1,545 922 140 1.84% 94.5 93.9 Realisable value of securities 831 - 713 - - 2013 2014 2015 2016 2017 67.8 Net NPL exposure - - 0 352 - 52.4 55.0 Total Insider Loans 1,650 1,745 1,446 1,537 1,335 Core Capital 19,037 18,480 18,448 17,592 15,431 Supplementary Capital 726 716 653 465 355 Total Capital 19,763 19,196 19,101 18,057 15,786 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES RETURN ON AVERAGE ASSETS Quick Assets 45,618 49,666 41,524 44,475 36,742 Total risk weighted assets 77,348 72,808 67,435 66,135 44,600 SELECTED PERFORMANCE RATIOS (IN %) 1.17% 1.14% -0.71% Total liabilities/ Total assets 79.46 81.00 77.98 76.88 77.59 0.03% 0.35% Shareholders' funds/ Total assets 20.54 19.00 22.02 23.12 22.41 2013 2014 2015 2016 2017 Total income/ Total assets 10.74 9.77 11.61 11.10 12.65 Profitability (KSh Billions) Net interest margin/ Total assets 5.52 6.00 6.44 5.70 5.89 Net advances/ Total assets 37.86 26.55 30.21 30.24 34.16 2017 2016 2015 Total deposits/ Total assets 66.64 61.46 73.53 72.46 66.83 Gov. securities & placement with other banks/Total assets 38.08 41.34 36.01 44.27 43.31 Gov. securities & cash and balances with CBK/Total deposits 44.46 45.00 43.17 46.89 45.94 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 93.14 140.04 102.15 113.68 108.34 Total advances/ Total deposits 58.17 44.47 42.71 42.66 52.04 12.1 12.2 2.77% Shareholders' funds/ Total deposits 30.82 30.91 29.94 31.91 33.53 10.0 10.6 9.1 9.5 Average Cost of Funds (COF) 1.57 1.73 2.23 2.45 2.92 1.98% 2.18% 2.15% 1.73% Cost Income Ratio (CIR) 32.67 33.90 32.03 42.94 20.29 5.9 Gross Non-Performing Loans/ Total loans & advances 4.53 2.85 6.39 3.59 1.76 4.3 0.7 0.1 3.3 Loans Loss Provisions/ Operating income 5.65 5.87 9.55 7.72 1.85 Core capital/ Total deposit liabilities 29.08 29.10 28.46 30.58 32.41 PROFIT BEFORE (1.7) TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 24.61 25.38 27.36 26.60 34.60 EXPENSES INCOME 2013 2014 2015 2016 2017 Quick assets / Total liabilities 58.44 59.34 60.41 72.86 66.47 Quick assets / Total deposit liabilities 69.69 78.21 64.06 77.31 77.18 206 BANKING SURVEY | 2018 BANKING SURVEY | 2018 207 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier II Directors Contacts Financial Snapshot Bank of Baroda 2017 2016 2015 2014 2013 Strategic Focus Joyce-Ann Wainaina- CEO P.O. Box 30711 - 00100, Nairobi Total Assets (Ksh in 'billions') 98.2 BALANCE SHEET (KSH IN MILLIONS) Telephone: +254-20-2754000, 2711221, Core Capital (Ksh in 'billions') 19.0 Total Assets 96,132 82,907 68,178 61,945 52,022 Total Liabilities 78,232 68,683 56,904 52,077 44,452 Fax: +254-20-2714810/1 Profit Before Tax (Ksh in 'thousands') 6.4 Bank of Baroda is an Indian state owned Email: [email protected] Non Perfoming Loans/Total Loans 0.0 Net Assets (Shareholders' Funds) 17,900 14,225 11,273 9,868 7,570 International banking and financial Tier Ranking 1 Customer Deposits 73,005 64,874 52,929 48,683 41,877 Website: www.citibank.co.ke Return on Assets (%) 6.5 services company headquartered in Overall Ranking 1 Other Deposits 4,689 2,900 3,597 3,036 2,112 Core Capital/Total Deposit Liability (%) 31.6 Vadodara (earlier known as Baroda) in Total Deposits 77,694 67,774 56,526 51,719 43,989 Return on Capital Employed (%) 29.1 Loans and advances to customers (net of provisions) 42,207 36,401 31,018 28,389 23,578 Gujarat, India. It is the second largest Total loans and advances to customers 43,943 38,089 32,263 29,002 24,067 bank in India, next to State Bank of India. Cash and balances with CBK 4,374 4,054 3,238 3,021 2,397 Kenya government securities 46,550 41,209 31,018 28,687 24,251 Bank of Baroda started oversees journey LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) Placements with other banks 2,014 334 819 1,195 1,024 by opening a branch at Makadara Road, PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Mombasa in Kenya in December 1953. 4.55% 2017 2016 2015 Income 3.68% Interest on loans and advances 5,170 4,934 4,470 4,075 3,755 Later, on 03rd October 1959, another 2.79% 2.69% Interest on government securities 5,233 4,608 2,987 2,640 2,248 branch was opened at Digo Road 0.88% Interest on placements and bank balances 28 29 114 65 51 in Mombasa. Subsequently, in 2002 Other Interest Income 13 17 21 28 32 Makadara Branch was merged with 2013 2014 2015 2016 2017 2.4 2.3 2.4 Total Interest Income 10,445 9,587 7,592 6,807 6,086 Digo Road Branch, Mombasa. On 21st Net Interest Income 5,775 4,990 3,708 3,376 3,044 1.6 Foreign exchange gain (loss) 90 89 86 80 78 January 1992 the subsidiary, Bank of 1.4 1.3 1.2 Fees and Commissions Income (net) 166 171 155 152 163 Baroda (Kenya) Ltd was incorporated NON PERFORMING LOANS / TOTAL LOANS Other operating Income 523 112 99 24 34 with 86.70% shareholding of the Bank of 0.2 0.3 Total net operating income 6,556 5,363 4,047 3,632 3,319 Baroda, India and 43 local shareholders Total income 11,225 9,960 7,932 7,063 6,361 INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS constitute the remaining 13.3%. As on 3.04% Expenses 2.16% ADVANCES INCOME 31st December 2012, Bank of Baroda 1.71% 1.36% Interest on deposits 4,588 4,532 3,816 3,389 3,008 0.84% Interest on borrowed funds, deposits and placements from other banks 82 65 67 42 27 (Kenya) Ltd. has an authorized Capital Other interest expense 0 - 1 - 7 of Kenya Shillings 2,000 million with 2013 2014 2015 2016 2017 Total interest expense 4,670 4,597 3,884 3,431 3,042 subscribed and paid up capitals of KSh. General administrative expenses 796 726 672 590 517 900 million respectively. Bank of Baroda, Other operating expenses 343 326 289 262 227 India is contributing a capital of KSh. 858 Balance Sheet (KSh Billions) Total operating expenses 1,139 1,052 960 852 743 million CORE CAPITAL/TOTAL DEPOSIT LIABILITY Total expenditure 5,808 5,649 4,844 4,283 3,785 2017 2016 2015 Operating profits before provisions 5,417 4,312 3,087 2,780 2,576 Losses on loans and advances 364 436 602 85 72 The net profit for the bank grew by 30% 15.43% Profits Before Tax (after exceptional Items) 5,053 3,876 2,485 2,694 2,504 in 2017 to KSh 5.0 billion as compared DISCLOSURES (KSH IN MILLIONS) 14.56% to KSh 3.9 billion recorded in 2016. 13.86% 13.85% 103.3 Total provisions (Loan loss provision and interest in suspense) 1,736 1,689 1,245 613 489 13.55% 98.2 Total assets increased by 16% from KSh 88.1 Non-performing loans Net of provisions & suspended interest 930 1,704 1,119 451 109 Total Non-performing loans (Net of interest in suspense) 2,475 3,078 2,141 946 525 82 billion in 2016 to KSh 96 billion in 2013 2014 2015 2016 2017 64.4 62.5 62.0 Realisable value of securities 930 1,704 1,119 451 109 2017.Customer deposits grew by 13% Net NPL exposure - 0 0 - - in 2017 to KSh 73 billion compared to 37.2 Total Insider Loans 420 294 238 171 160 KSh 64 billion recorded in 2016.Loans 27.4 26.6 Core Capital 16,203 13,506 11,181 9,324 7,414 and advances grew by 16% from KSh 36 Supplementary Capital 706 486 365 359 249 RETURN ON AVERAGE ASSETS billion in 2016 to KSh 42 billion in 2017. TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 16,909 13,992 11,546 9,683 7,663 Quick Assets 52,937 45,597 35,076 32,903 27,672 Interest on loans and advances grew by Total risk weighted assets 52,365 45,823 42,539 40,044 35,458 5% in 2017 to KSh 5.2 billion compared 3.37% 2.62% 3.17% 3.00% 3.01% SELECTED PERFORMANCE RATIOS (IN %) to KSh 4.9 billion recorded in 2016.Net Total liabilities/ Total assets 81.38 82.84 83.47 84.07 85.45 interest income increased by 16% in 2017 Shareholders' funds/ Total assets 18.62 17.16 16.53 15.93 14.55 to KSh 5.7 billion in 2017 compared to Total income/ Total assets 11.68 12.01 11.63 11.40 12.23 2013 2014 2015 2016 2017 KSh 5.0 billion recorded in 2016. Total Profitability (KSh Billions) Net interest margin/ Total assets 6.01 6.02 5.44 5.45 5.85 Net advances/ Total assets 43.91 43.91 45.50 45.83 45.32 non-performing loans decreased by 20% 2017 2016 2015 Total deposits/ Total assets 80.82 81.75 82.91 83.49 84.56 from KSh 3.0 billion in 2016 to KSh 2.4 AVERAGE COST OF FUNDS Gov. securities & placement with other banks/Total assets 50.52 50.11 46.70 48.24 48.58 billion in 2017. Gov. securities & cash and balances with CBK/Total deposits 52.97 54.60 50.25 51.19 51.22 9.5 Gov. securities & cash and balances with CBK/Total advances 105.93 108.19 96.14 98.91 100.76 1.41% 9.0 8.7 1.28% Total advances/ Total deposits 56.56 56.20 57.08 56.08 54.71 1.13% 7.3 7.2 Shareholders' funds/ Total deposits 23.04 20.99 19.94 19.08 17.21 6.4 6.5 0.82% 0.76% 6.0 5.6 Average Cost of Funds (COF) 6.01 6.78 6.87 6.63 6.90 Cost Income Ratio (CIR) 17.37 19.61 23.73 23.46 22.40 Gross Non-Performing Loans/ Total loans & advances 6.07 8.91 7.33 3.67 2.49 1.0 1.1 1.5 Loans Loss Provisions/ Operating income 23.57 25.62 25.25 13.62 12.53 Core capital/ Total deposit liabilities 20.85 19.93 19.78 18.03 16.85 2013 2014 2015 2016 2017 PROFIT BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 30.94 29.47 26.28 23.28 20.91 EXPENSES INCOME Quick assets / Total liabilities 67.67 66.39 61.64 63.18 62.25 Quick assets / Total deposit liabilities 68.14 67.28 62.05 63.62 62.91 208 BANKING SURVEY | 2018 BANKING SURVEY | 2018 209 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier II Directors Contacts Financial Snapshot Prime Bank 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Ashok Kumar Garg-CEO P.O. Box 30033 - 00100, Nairobi Total Assets (Ksh in 'billions') 96.1 Total Assets 76,438 65,335 65,001 54,918 49,461 Telephone: +254-20-2248402/12, Core Capital (Ksh in 'billions') 16.2 Total Liabilities 62,100 54,502 56,276 47,183 43,645 Prime Bank Ltd is one of the leading Fax: +254-20-316070, 310439 Profit Before Tax (Ksh in 'thousands') 5.1 Net Assets (Shareholders' Funds) 14,338 10,833 8,725 7,735 5,816 Private Banks in Kenya and was founded Email: [email protected] Non Perfoming Loans/Total Loans 5.6 Tier Ranking 3 Customer Deposits 57,555 49,313 50,819 44,940 40,562 in 1992. Prime Bank has regional presence Website: www.bankofbarodakenya.com Return on Assets (%) 5.3 Other Deposits 1,396 1,744 4,988 1,822 2,449 Overall Ranking 4 in Malawi, Botswana, Mozambique Core Capital/Total Deposit Liability (%) 28.2 Total Deposits 58,951 51,057 55,806 46,762 43,011 and Zambia through First Merchant Return on Capital Employed (%) 20.9 Loans and advances to customers (net of provisions) 38,817 39,356 41,048 34,481 26,752 Total loans and advances to customers 39,763 40,170 41,617 35,060 27,408 Bank in Malawi. The bank is under the Cash and balances with CBK 4,759 2,700 3,735 2,485 2,673 leadership of Mr. Bharat Jani who has a Kenya government securities 22,759 16,567 15,446 15,193 15,119 vast experience in international banking Placements with other banks 3,035 2,765 1,623 1,034 2,158 LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) spanning 35 years. In 2014, Mr. Jani was PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income appointed the Managing Director of the 2017 2016 2015 Interest on loans and advances 4,811 5,390 5,136 4,185 3,358 bank. 10.98% 11.14% 10.25% Interest on government securities 2,323 2,001 1,586 1,455 1,440 5.92% 5.45% Interest on placements and bank balances 124 48 102 61 88 The banks net profit declined by 15% in Other Interest Income 113 140 154 120 114 2013 2014 2015 2016 2017 5.2 4.9 Total Interest Income 7,370 7,579 6,977 5,820 5,000 2017 to KSh 1.9 billion compared to KSh 4.5 Net Interest Income 3,629 3,551 3,350 2,972 2,497 2.3 billion recorded in 2016.Total assets Foreign exchange gain (loss) 197 298 442 338 311 increased by 17% from KSh 65 billion Fees and Commissions Income (net) 570 509 484 413 337 recorded in 2016 to KSh 76billion in 2017. NON PERFORMING LOANS / TOTAL LOANS Other operating Income 217 166 234 223 229 Customer deposits in 2017 was KSh 57 0.2 0.2 0.2 0.0 0.0 0.1 Total net operating income 4,638 4,543 4,511 3,945 3,373 billion which is 17% increase compared Total income 8,379 8,571 8,138 6,793 5,876 3.87% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses to KSh 49 billion recorded in 2016.Loans 3.19% 2.64% ADVANCES INCOME Interest on deposits 3,527 3,788 3,490 2,816 2,488 and advances slightly decline by 1% from 1.08% 1.60% Interest on borrowed funds, deposits and placements from other banks 141 172 138 32 14 KSh 39 billion in 2016 to KSh 38 billion Other interest expense 73 68 - - - in 2017.Interest on loan and advances Total interest expense 3,741 4,028 3,628 2,848 2,503 decreased by 11%from KSh 5.4billion in 2013 2014 2015 2016 2017 General administrative expenses 1,576 1,378 1,204 1,085 965 2017 to KSh 4.8 billion recorded in 2016. Other operating expenses 745 621 563 173 406 Net interest income slightly increased Balance Sheet (KSh Billions) Total operating expenses 2,320 1,999 1,766 1,258 1,371 Total expenditure 6,062 6,026 5,394 4,107 3,873 by 2% to KSh3.6 billion recorded in CORE CAPITAL/TOTAL DEPOSIT LIABILITY 2017 from KSh 3.5 billion in 2016.Total 2017 2016 2015 Operating profits before provisions 2,317 2,545 2,744 2,687 2,003 Losses on loans and advances 341 209 152 101 139 non-performing loans increased by 33% 9.07% Profits Before Tax (after exceptional Items) 1,977 2,335 2,592 2,586 1,864 from KSh 1.4 billion recorded in 2016 to 8.60% 8.66% DISCLOSURES (KSH IN MILLIONS) 7.33% 7.84% KSh 1.8 billon recorded in 2017. Total provisions (Loan loss provision and interest in suspense) 945 814 569 579 657 96.1 Non-performing loans Net of provisions & suspended interest 1,306 1,041 419 87 48 82.9 Total Non-performing loans (Net of interest in suspense) 1,895 1,423 698 462 499 73.0 Realisable value of securities 1,301 1,041 419 87 48 68.2 64.9 Net NPL exposure 5 - - - - 2013 2014 2015 2016 2017 52.9 42.2 Total Insider Loans 1,958 1,825 2,039 1,630 1,401 36.4 31.0 Core Capital 11,176 9,741 8,351 6,722 4,951 Supplementary Capital 620 1,024 - - - Total Capital 11,796 10,765 8,351 6,722 4,951 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Quick Assets 30,552 22,031 20,805 18,712 19,950 Total risk weighted assets 52,478 51,216 48,318 40,100 26,914 SELECTED PERFORMANCE RATIOS (IN %) 2.22% 2.06% 2.23% 2.45% Total liabilities/ Total assets 81.24 83.42 86.58 85.92 88.24 1.66% Shareholders' funds/ Total assets 18.76 16.58 13.42 14.08 11.76 Total income/ Total assets 10.96 13.12 12.52 12.37 11.88 2013 2014 2015 2016 2017 Profitability (KSh Billion) Net interest margin/ Total assets 4.75 5.43 5.15 5.41 5.05 Net advances/ Total assets 50.78 60.24 63.15 62.79 54.09 2017 2016 2015 Total deposits/ Total assets 77.12 78.15 85.85 85.15 86.96 Gov. securities & placement with other banks/Total assets 33.74 29.59 26.26 29.55 34.93 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total deposits 36.00 29.49 29.51 32.19 35.97 Gov. securities & cash and balances with CBK/Total advances 57.24 41.24 37.11 43.33 55.16 10.4 Total advances/ Total deposits 67.45 78.68 74.57 74.98 63.72 9.6 Shareholders' funds/ Total deposits 24.32 21.22 15.63 16.54 13.52 3.22% 7.6 Average Cost of Funds (COF) 5.97 7.34 6.50 6.09 5.82 3.14% 3.12% 3.12% 6.6 Cost Income Ratio (CIR) 50.03 43.99 39.16 31.90 40.63 5.4 5.1 4.7 Gross Non-Performing Loans/ Total loans & advances 5.66 4.62 2.38 1.90 2.57 4.6 4.0 2.79% 3.9 3.9 Loans Loss Provisions/ Operating income 12.70 8.41 6.18 9.49 13.40 2.5 Core capital/ Total deposit liabilities 18.96 19.08 14.96 14.38 11.51 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 21.30 19.02 17.28 16.76 18.40 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Quick assets / Total liabilities 49.20 40.42 36.97 39.66 45.71 Quick assets / Total deposit liabilities 51.83 43.15 37.28 40.02 46.38 210 BANKING SURVEY | 2018 BANKING SURVEY | 2018 211 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier II Family Bank 2017 2016 2015 2014 2013 Directors Contacts Financial Snapshot BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Mr. Amar Kantaria-MD P.O. Box 43825 - 00100, Nairobi Total Assets (Ksh in 'billions') 76.4 Total Assets 69,051 69,432 81,190 61,812 43,501 Telephone: +254-20-4203000, Core Capital (Ksh in 'billions') 11.2 Total Liabilities 57,443 56,813 69,263 51,192 37,533 Family Bank is a medium sized Fax: +254-20-4451247 Profit Before Tax (Ksh in 'thousands') 2.0 Net Assets (Shareholders' Funds) 11,608 12,619 11,927 10,620 5,968 commercial bank in Kenya founded in Email: [email protected] Non Perfoming Loans/Total Loans 4.8 Customer Deposits 47,425 41,473 62,731 47,186 34,615 Tier Ranking 4 1984 as Family Finance Building Society Website: www.primebankkenya.com Return on Assets (%) 2.6 Other Deposits 202 923 132 209 436 Overall Ranking 11 Total Deposits 47,627 42,396 62,862 47,396 35,051 Limited (FFBSL). It is the fifth largest Core Capital/Total Deposit Liability (%) 13.8 Loans and advances to customers (net of provisions) 43,472 50,164 55,854 39,925 27,943 bank in Kenya in terms of branches. The Return on Capital Employed (%) 19.0 Total loans and advances to customers 46,928 53,485 57,975 41,681 29,196 bank started operating as a financial Cash and balances with CBK 5,592 5,492 6,167 5,533 4,357 institution in 2007. The bank changed Kenya government securities 7,692 5,005 7,627 6,051 4,796 its managing director in 2016, and Placements with other banks 2,495 187 4,892 7,378 3,037 LOAN LOSS PROVISION / OPERATING INCOME appointed Mr. David Thuku who has Income & Expenses (KSh Billion) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income managed the Retail Banking for the past 2017 2016 2015 Interest on loans and advances 6,125 10,081 8,258 6,216 4,686 25 years. The change resulted when the 4.96% 4.70% Interest on government securities 779 658 788 527 427 former managing director Mr. T K Muya, 3.52% 3.12% 2.29% Interest on placements and bank balances 39 212 764 243 166 retired. Other Interest Income 106 183 222 135 75 2013 2014 2015 2016 2017 5.4 5.1 Total Interest Income 7,048 11,133 10,032 7,121 5,354 4.8 Net Interest Income 4,374 7,022 6,392 5,371 4,450 The bank made a loss of KSh 1.3 billion Foreign exchange gain (loss) 289 236 298 111 67 which is a 316% decline compared to Fees and Commissions Income (net) 1,687 1,629 2,388 2,185 1,661 the profit of KSh 633 million made in NON PERFORMING LOANS / TOTAL LOANS Other operating Income 127 112 128 258 76 2016.Total assets slightly decline by 1% Total net operating income 6,475 8,998 9,207 7,925 6,254 0.6 0.5 0.5 0.1 0.05 0.1 from KSh 69.4 billion in 2016 to KSh Total income 9,149 13,110 12,846 9,676 7,158 69.0 billion in 2017.Customer deposits INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses 1.71% 2.10% ADVANCES INCOME Interest on deposits 1,584 2,868 3,269 1,548 838 grew by 14% in 2017 to KSh 47.4 billion 0.95% 0.70% 0.88% Interest on borrowed funds, deposits and placements from other banks 101 219 - - - compared to KSh 41.5 billion recorded Other interest expense 989 1,025 370 203 66 in 2016.Loans and advances declined by 2013 2014 2015 2016 2017 Total interest expense 2,674 4,112 3,640 1,751 904 13%in 2017 to KSh 43.5 compared to General administrative expenses 3,946 4,470 3,956 3,300 2,820 KSh 50.2 billion recorded in 2016.Interest Other operating expenses 2,969 3,048 2,155 1,618 1,355 on loans and advances declined by 39% Total operating expenses 6,915 7,517 6,111 4,917 4,175 Balance Sheet (KSh Billion) to KSh 6.1 billion in 2017 compared to CORE CAPITAL/TOTAL DEPOSIT LIABILITY Total expenditure 9,589 11,629 9,751 6,668 5,079 Operating profits before provisions (440) 1,481 3,095 3,008 2,080 KSh 10.1 billion recorded in 2016. Net 2017 2016 2015 Losses on loans and advances 931 847 212 390 322 interest income declined by 38% from Profits Before Tax (after exceptional Items) (1,371) 633 2,883 2,618 1,758 KSh 7.0 billion in 2016 to KSh 4.4 billion 7.07% 7.02% DISCLOSURES (KSH IN MILLIONS) 5.32% 5.54% recorded in 2017.Total non-performing 4.26% Total provisions (Loan loss provision and interest in suspense) 3,456 3,321 2,122 1,756 1,253 loan increased by 39% in 2017 to KSh 8.4 Non-performing loans Net of provisions & suspended interest 6,022 3,693 1,393 1,091 1,064 76.4 Total Non-performing loans (Net of interest in suspense) 8,360 6,003 2,879 2,390 2,014 billion compared to KSh 6.0 recorded in 65.3 65.0 Realisable value of securities 5,842 3,561 1,393 1,091 1,064 2016. 2013 2014 2015 2016 2017 57.6 49.3 50.8 Net NPL exposure 180 132 (0) - - 38.8 39.4 41.0 Total Insider Loans 3,269 3,828 3,117 2,307 1,775 Core Capital 10,832 11,980 11,329 10,184 5,631 Return on Average Assets Supplementary Capital 2,315 2,469 2,555 366 264 Total Capital 13,147 14,450 13,884 10,550 5,895 1.84% TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Quick Assets 15,779 10,684 18,686 18,962 12,190 1.60% 1.49% 1.33% Total risk weighted assets 66,207 69,534 73,606 52,067 31,127 1.03% SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 83.19 81.83 85.31 82.82 86.28 Shareholders' funds/ Total assets 16.81 18.17 14.69 17.18 13.72 Total income/ Total assets 13.25 18.88 15.82 15.65 16.45 Net interest margin/ Total assets 6.33 10.11 7.87 8.69 10.23 2013 2014 2015 2016 2017 Profitability (KSh Billions) Net advances/ Total assets 62.96 72.25 68.79 64.59 64.24 Total deposits/ Total assets 68.97 61.06 77.43 76.68 80.58 2017 2016 2015 Gov. securities & placement with other banks/Total assets 14.75 7.48 15.42 21.73 18.01 Gov. securities & cash and balances with CBK/Total deposits 19.24 15.12 16.99 18.74 21.04 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 16.39 9.36 13.15 14.52 16.43 7.4 7.6 Total advances/ Total deposits 98.53 126.16 92.23 87.94 83.29 7.0 Shareholders' funds/ Total deposits 24.37 29.76 18.97 22.41 17.03 Average Cost of Funds (COF) 3.01 6.01 4.78 3.08 2.30 2.67% 4.6 4.5 4.5 Cost Income Ratio (CIR) 106.79 83.55 66.38 62.05 66.75 2.62% 4.0 3.7 3.6 Gross Non-Performing Loans/ Total loans & advances 20.20 13.11 6.06 6.83 7.93 2.35% 2.36% 2.26% 2.3 2.6 Loans Loss Provisions/ Operating income 36.11 25.67 16.14 16.38 15.18 2.0 Core capital/ Total deposit liabilities 22.74 28.26 18.02 21.49 16.07 Core capital/ Total risk weighted assets 16.36 17.23 15.39 19.56 18.09 PROFIT BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Quick assets / Total liabilities 27.47 18.81 26.98 37.04 32.48 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total deposit liabilities 33.13 25.20 29.73 40.01 34.78 212 BANKING SURVEY | 2018 BANKING SURVEY | 2018 213 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier II Directors Contacts Financial Snapshot HFC Group 2017 2016 2015 2014 2013 P.O. Box 74145 - 00200, Nairobi David Thuku-MD Total Assets (Ksh in 'billions') 69.1 BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Telephone: +254-20-318173, 318940/2/7, Core Capital (Ksh in 'billions') 10.8 Total Assets 62,127 68,084 68,809 60,491 46,755 2244166, 2240601 Profit Before Tax (Ksh in 'thousands') -1.4 Total Liabilities 52,163 58,310 59,718 54,215 41,073 Housing finance was founded in 1965 Fax: +254-20-318174 Net Assets (Shareholders' Funds) 9,964 9,774 9,091 6,276 5,682 Non Perfoming Loans/Total Loans 17.8 as a mortgage banking industry. The Email: [email protected] Customer Deposits 36,898 38,156 41,888 36,310 26,589 Tier Ranking 6 Return on Assets (%) -2.0 Housing Finance Company of Kenya is the Other Deposits 84 625 - - - Overall Ranking 29 Website: www.familybank.co.ke Core Capital/Total Deposit Liability (%) -11.8 Total Deposits 36,981 38,781 41,888 36,310 26,589 only mortgage company regulated by the Return on Capital Employed (%) 22.7 Loans and advances to customers (net of provisions) 49,640 54,470 53,021 45,244 35,215 central bank of Kenya. The company was Total loans and advances to customers 52,630 56,786 54,624 46,260 35,928 set to promote and offer housing to the Cash and balances with CBK 3,271 3,372 4,449 3,022 1,739 independent Kenyans. Kenya government securities 2,287 4,086 2,151 264 288 LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) Placements with other banks 2,301 1,659 5,518 8,583 6,858 PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) The net profit declined by 73% in 2017 2017 2016 2015 15.05% Income to KSh 393 million compared to KSh 10.70% Interest on loans and advances 6,713 7,889 7,218 5,814 4,888 1.4 billion recorded in 2016.Total assets 6.83% 6.73% Interest on government securities 314 504 123 36 47 6.33% declined by 9% from KSh 68 billion Interest on placements and bank balances 105 214 759 524 505 recorded in 2016 to KSh 62 billion in 10.1 Other Interest Income - - - - - 2013 2014 2015 2016 2017 2017.Customer deposits declined by 3% 8.3 Total Interest Income 7,133 8,607 8,100 6,374 5,440 Net Interest Income 3,058 3,963 3,581 3,019 2,553 from KSh 38 billion recorded in 2016 to 6.1 Foreign exchange gain (loss) 50 4 60 18 2 KSh36 billion recorded in 2017.Loans NON PERFORMING LOANS / TOTAL LOANS Fees and Commissions Income (net) 146 268 298 312 206 and advances declined by 9% in 2017 1.7 1.6 2.4 0.0 0.2 0.8 Other operating Income 88 89 322 182 95 to KSh 49 billion compared to KSh 54 Total net operating income 3,342 4,323 4,262 3,530 2,855 billion recorded in 2016.Interest on 8.42% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Total income 7,416 8,967 8,780 6,886 5,742 ADVANCES INCOME Expenses loans and advances in 2017 was KSh 6.7 5.46% billion this is a 15% decline compared 3.31% 2.85% Interest on deposits 2,323 2,940 2,892 1,882 1,599 2.53% Interest on borrowed funds, deposits and placements from other banks 111 2 - - - to KSh 7.9 billion in 2016. Net interest Other interest expense 1,640 1,702 1,627 1,473 1,288 income declined by 23% to KSh 3.0 2013 2014 2015 2016 2017 Total interest expense 4,074 4,644 4,519 3,355 2,887 billion recorded in 2017 compared to General administrative expenses 1,321 1,219 1,189 1,101 918 KSh 39 billion posted in 2016.Total non- Other operating expenses 1,052 960 833 593 445 performing loans increased by 34% to Balance Sheet (KSh Billions) Total operating expenses 2,373 2,179 2,021 1,694 1,363 CORE CAPITAL/TOTAL DEPOSIT LIABILITY Total expenditure 6,447 6,823 6,540 5,049 4,250 KSh6.9 billion compared to KSh 5.1 billion 2017 2016 2015 Operating profits before provisions 969 2,144 2,240 1,836 1,492 posted in 2016. Losses on loans and advances 576 699 503 551 281 Profits Before Tax (after exceptional Items) 393 1,445 1,737 1,285 1,211 11.77% DISCLOSURES (KSH IN MILLIONS) 8.95% 9.48% Total provisions (Loan loss provision and interest in suspense) 2,990 2,316 1,603 1,016 713 6.69% 7.51% 81.2 Non-performing loans Net of provisions & suspended interest 5,222 3,878 2,494 3,147 2,497 69.1 69.4 62.7 Total Non-performing loans (Net of interest in suspense) 6,951 5,176 3,487 3,961 3,019 55.9 Realisable value of securities 5,222 3,878 2,494 3,147 2,497 2013 2014 2015 2016 2017 47.4 50.2 41.5 43.5 Net NPL exposure - - - - - Total Insider Loans 1,527 1,722 1,738 1,282 815 Core Capital 8,298 8,519 8,095 4,841 3,994 Supplementary Capital 811 1,060 1,453 1,731 2,252 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 9,109 9,579 9,548 6,571 6,246 Quick Assets 7,859 9,117 12,118 11,870 8,885 Total risk weighted assets 53,576 54,161 52,672 43,534 28,946 1.97% 2.07% 1.68% SELECTED PERFORMANCE RATIOS (IN %) 0.35% -0.83% Total liabilities/ Total assets 83.96 85.64 86.79 89.62 87.85 2013 2014 2015 2016 2017 Shareholders' funds/ Total assets 16.04 14.36 13.21 10.38 12.15 Profitability (KSh Billions) Total income/ Total assets 11.94 13.17 12.76 11.38 12.28 Net interest margin/ Total assets 4.92 5.82 5.21 4.99 5.46 Net advances/ Total assets 79.90 80.00 77.06 74.79 75.32 2017 2016 2015 Total deposits/ Total assets 59.53 56.96 60.88 60.03 56.87 Gov. securities & placement with other banks/Total assets 7.39 8.44 11.14 14.63 15.28 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total deposits 8.95 10.95 9.59 5.43 4.34 11.1 Gov. securities & cash and balances with CBK/Total advances 4.35 7.19 3.94 0.57 0.80 10.0 Total advances/ Total deposits 142.32 146.43 130.41 127.40 135.12 9.0 9.2 2.29% Shareholders' funds/ Total deposits 26.94 25.20 21.70 17.28 21.37 2.15% 7.0 6.5 Average Cost of Funds (COF) 4.72 5.11 4.87 3.53 3.94 1.49% Cost Income Ratio (CIR) 71.00 50.40 47.43 47.98 47.74 1.13% 1.31% 4.1 3.6 Gross Non-Performing Loans/ Total loans & advances 15.60 10.91 7.50 9.00 8.93 0.6 2.9 2.7 Loans Loss Provisions/ Operating income 51.74 30.03 23.29 23.06 18.27 Core capital/ Total deposit liabilities 22.44 21.97 19.32 13.33 15.02 PROFIT (1.4) BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 15.49 15.73 15.37 11.12 13.80 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Quick assets / Total liabilities 15.07 15.64 20.29 21.89 21.63 Quick assets / Total deposit liabilities 21.25 23.51 28.93 32.69 33.42 214 BANKING SURVEY | 2018 BANKING SURVEY | 2018 215 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier II Bank of India (Kenya) 2017 2016 2015 2014 2013 Directors Contacts Financial Snapshot Strategic Focus BALANCE SHEET (KSH IN MILLIONS) P.O. Box 30098 - 00100, Nairobi Total Assets (Ksh in 'billions') 62.1 Mr. Sam Waweru-MD Total Assets 56,631 47,815 42,163 34,370 30,721 Telephone: +254-20-3262000, 317474, 2221101 Core Capital (Ksh in 'billions') 8.3 Total Liabilities 45,006 38,279 34,980 28,296 25,635 Bank of India is registered in Kenya as Fax: +254-20-340299/2250858 Profit Before Tax (Ksh in 'thousands') 0.4 Net Assets (Shareholders’ Funds) 11,625 9,536 7,183 6,075 5,087 a branch rather than a subsidiary of the Email: [email protected] Non Perfoming Loans/Total Loans 13.2 Customer Deposits 31,286 26,726 24,613 24,668 22,778 Tier Ranking 5 main bank which has its headquarters Website: www.housing.co.ke Return on Assets (%) 0.6 Other Deposits 13,539 11,268 10,134 3,446 2,695 Overall Ranking 23 in Mumbai, a factor that has limited its Core Capital/Total Deposit Liability (%) 3.9 Total Deposits 44,825 37,994 34,747 28,114 25,474 Loans and advances to customers (net of provisions) 20,641 19,246 17,858 12,376 10,673 pace of expansion over the years since Return on Capital Employed (%) 22.4 Total loans and advances to customers 20,771 19,354 17,973 12,438 10,750 it has had to expand organically rather Cash and balances with CBK 2,215 1,602 1,525 1,455 1,302 than through acquisitions. The bank Kenya government securities 30,079 24,462 21,238 19,520 17,851 has, however, as a part of its growth Placements with other banks 2,652 1,495 1,284 406 294 LOAN LOSS PROVISION / OPERATING INCOME strategy, targeted key industrial towns Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) for expansion. The plan to put up more Income 2017 2016 2015 Interest on loans and advances 1,992 1,801 1,576 1,338 1,254 branches in the industrial hubs of Kenya Interest on government securities 3,127 2,573 2,122 1,874 1,658 is geared towards tapping increased 20.70% 7.31% 9.22% 9.32% 12.01% Interest on placements and bank balances 65 48 44 29 64 levels of investment by Indian companies Other Interest Income - - - 1 0 in sectors such as medical diagnostics, Total Interest Income 5,185 4,422 3,742 3,242 2,976 2013 2014 2015 2016 2017 communications, petroleum refining and 7.9 Net Interest Income 3,012 2,478 1,808 1,488 1,424 7.2 ICT. 6.7 Foreign exchange gain (loss) 27 27 18 28 29 Fees and Commissions Income (net) 196 165 165 143 131 NON PERFORMING LOANS / TOTAL LOANS Other operating Income 104 80 44 44 37 The net profit increased by 22% from Total net operating income 3,340 2,751 2,035 1,703 1,620 0.1 0.3 0.3 0.1 0.2 0.8 KSh 2.2billion in 2016 to KSh 2.7 billion Total income 5,513 4,695 3,969 3,457 3,172 in 2017. Total assets grew by 18% from INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses KSh 47 billion in 2016 to KSh 56 billion in 6.24% ADVANCES INCOME Interest on deposits 1,846 1,767 1,894 1,717 1,504 4.36% 2017.Customer deposits also increased by 3.57% 3.60% 3.00% Interest on borrowed funds, deposits and placements from other banks 327 177 40 37 48 Other interest expense - - - - - 17% to KSh 31 billion in 2017 from KSh Total interest expense 2,173 1,944 1,934 1,754 1,552 26 billion in 2016.Loans and advances 2013 2014 2015 2016 2017 General administrative expenses 371 295 294 229 201 grew by 7% from KSh 19 billion in 2016 Other operating expenses 200 226 220 206 164 to KSh 20 billion in 2017. Interest on Total operating expenses 571 521 514 434 365 Balance Sheet (KSh Billions) Total expenditure 2,743 2,466 2,448 2,188 1,917 loans and advances grew by 11% from CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions 2,769 2,230 1,521 1,268 1,255 KSh 1.8 billion in 2016 to KSh 1.9 billion 2017 2016 2015 Losses on loans and advances 94 45 52 (16) 2 in 2017.Net interest income increased Profits Before Tax (after exceptional Items) 2,675 2,185 1,469 1,284 1,253 by 22% from KSh 2.5 billion in 2016 8.79% 8.98% 7.73% DISCLOSURES (KSH IN MILLIONS) to KSh3.0 billion in 2017. Total non- Total provisions (Loan loss provision and interest in suspense) 130 108 115 63 77 6.01% 5.33% performing loans greatly increased by 68.1 68.8 Non-performing loans Net of provisions & suspended interest 305 164 249 8 31 58% from KSh 268 million in 2016 to KSh 62.1 Total Non-performing loans (Net of interest in suspense) 428 268 361 69 107 54.5 49.6 53.0 Realisable value of securities 305 164 249 8 31 428 million in 2017. 41.9 Net NPL exposure - - - - - 2013 2014 2015 2016 2017 36.9 38.2 Total Insider Loans 74 63 57 50 32 Core Capital 10,665 8,574 6,948 5,902 4,951 Supplementary Capital 404 397 196 135 117 Total Capital 11,069 8,971 7,144 6,037 5,068 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Quick Assets 34,946 27,559 24,047 21,380 19,447 Total risk weighted assets 20,508 19,615 16,889 15,316 12,205 SELECTED PERFORMANCE RATIOS (IN %) 1.11% 0.96% 1.07% Total liabilities/ Total assets 79.47 80.06 82.96 82.33 83.44 0.84% Shareholders’ funds/ Total assets 20.53 19.94 17.04 17.67 16.56 0.24% Total income/ Total assets 9.73 9.82 9.41 10.06 10.33 2013 2014 2015 2016 2017 Profitability (KSh Billions) Net interest margin/ Total assets 5.32 5.18 4.29 4.33 4.64 Net advances/ Total assets 36.45 40.25 42.35 36.01 34.74 Total deposits/ Total assets 79.15 79.46 82.41 81.80 82.92 2017 2016 2015 Gov. securities & placement with other banks/Total assets 57.80 54.29 53.42 57.97 59.06 Gov. securities & cash and balances with CBK/Total deposits 57.03 54.51 53.99 61.03 62.34 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 144.81 126.39 118.17 156.94 166.06 Total advances/ Total deposits 46.34 50.94 51.72 44.24 42.20 8.6 8.1 Shareholders’ funds/ Total deposits 25.93 25.10 20.67 21.61 19.97 7.1 Average Cost of Funds (COF) 4.85 5.12 5.57 6.24 6.09 2.05% 2.01% 1.78% Cost Income Ratio (CIR) 17.08 18.95 25.25 25.51 22.54 1.69% 1.60% 4.6 4.1 4.5 4.3 4.3 Gross Non-Performing Loans/ Total loans & advances 2.09 1.41 2.02 0.57 1.00 3.3 Loans Loss Provisions/ Operating income 3.66 3.78 5.54 3.57 4.72 0.4 1.4 1.7 Core capital/ Total deposit liabilities 23.79 22.57 20.00 20.99 19.44 Core capital/ Total risk weighted assets 52.00 43.71 41.14 38.53 40.56 PROFIT BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Quick assets / Total liabilities 77.65 72.00 68.75 75.56 75.86 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total deposit liabilities 77.96 72.54 69.21 76.05 76.34 216 BANKING SURVEY | 2018 BANKING SURVEY | 2018 217 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier II Bank of Africa (Kenya) 2017 2016 2015 2014 2013 Directors Contacts Financial Snapshot BALANCE SHEET (KSH IN MILLIONS) Strategic Focus P.O. Box 30246 - 00100, Nairobi Mr. A. K. Azad-Chief Executive Kenya Branches Total Assets (Ksh in 'billions') 56.6 Total Assets 54,191 55,996 69,280 62,212 52,683 Telephone: +254-20-2221414/5/6/7, Core Capital (Ksh in 'billions') 10.7 Total Liabilities 45,724 47,578 60,785 54,298 46,144 BOA group is a multinational Pan-African Fax: +254-20-2221417 Profit Before Tax (Ksh in 'thousands') 2.7 Net Assets (Shareholders' Funds) 8,468 8,418 8,496 7,913 6,539 banking conglomerate, with banking Email: [email protected] Non Perfoming Loans/Total Loans 2.1 Customer Deposits 31,572 34,464 47,488 41,671 36,740 Tier Ranking 2 operations in 18 African countries, and Website: www.bankofindia.com Return on Assets (%) 4.7 Other Deposits 1,762 36 16 626 1,498 Overall Ranking 2 Total Deposits 33,334 34,500 47,503 42,297 38,238 a representative office in Paris, France. Core Capital/Total Deposit Liability (%) 23.0 Loans and advances to customers (net of provisions) 27,388 31,542 37,799 38,454 31,091 Bank of Africa maintains its headquarters Return on Capital Employed (%) 23.8 Total loans and advances to customers 33,589 37,480 41,075 39,226 31,345 in Bamako. The group has Banque Cash and balances with CBK 5,153 6,393 5,954 5,942 3,426 Marocaine du Commerce Exterieur Kenya government securities 4,842 5,181 6,343 7,000 9,443 (BMCE) of Morocco as the majority Placements with other banks 1,670 3,240 7,987 2,938 4,579 shareholder. BMCE of Morocco is the LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income third largest Bank in Morocco. Bank of 2017 2016 2015 Interest on loans and advances 3,359 5,795 5,287 4,517 4,239 Africa Kenya limited is a commercial bank 1.48% 1.73% 1.12% 1.18% 1.15% Interest on government securities 474 471 610 640 573 providing banking services to corporate, Interest on placements and bank balances 269 237 295 213 385 SME and retail clientele. The bank Other Interest Income 23 12 64 93 47 commenced operations in Kenya in July Total Interest Income 4,125 6,515 6,256 5,462 5,244 2013 2014 2015 2016 2017 2.0 2004, after acquiring the Kenyan branch Net Interest Income 1,255 3,023 2,492 2,305 2,135 1.8 of Credit Agricole Indosuez, a large 1.6 Foreign exchange gain (loss) 510 257 318 199 191 Fees and Commissions Income (net) 705 681 804 681 656 international French bank which had Other operating Income 954 1,426 7 71 125 operated in the country for over 20 years. NON PERFORMING LOANS / TOTAL LOANS Total net operating income 3,424 5,386 3,620 3,256 3,106 0.2 0.2 0.2 0.1 0.0 0.0 Total income 6,310 8,878 7,384 6,413 6,215 The net profit before tax made in 2017 Expenses INTEREST ON LOANS & FEES ADVANCES AND COMMISSIONS INCOME INTEREST ON DEPOSITS 0.63% 0.65% Interest on deposits 1,736 2,500 3,111 2,711 2,791 was KSh 35 million, an increase of 0.44% Interest on borrowed funds, deposits and placements from other banks 126 153 223 251 212 305.9% from the previous loss of KSh 0.31% 0.18% Other interest expense 1,008 839 430 196 106 17 million recorded in 2016. The total Total interest expense 2,870 3,493 3,764 3,157 3,109 assets decreased by 3.2% from KSh 56 2013 2014 2015 2016 2017 General administrative expenses 1,775 1,775 1,900 1,688 1,373 billion in 2016 to KSh 54.19 billion in Other operating expenses 862 1,131 1,011 951 665 2017.Customer deposits also decreased Total operating expenses 2,637 2,906 2,912 2,639 2,038 Balance Sheet (KSh Billions) Total expenditure 5,507 6,398 6,675 5,796 5,147 by 8.4% from KSh 34.46 billion in 2016 CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions 803 2,480 709 617 1,069 to KSh 31.57 billion in 2017. Loans and 2017 2016 2015 Losses on loans and advances 768 2,497 2,143 413 135 advances reduced by 13.2% from KSh Profits Before Tax (after exceptional Items) 35 (17) (1,434) 203 934 31.54 billion in 2016 to KSh 27.39 billion DISCLOSURES (KSH IN MILLIONS) 7.44% in 2017. Interest on loans and advances 6.56% 7.05% 56.6 Total provisions (Loan loss provision and interest in suspense) 6,201 5,938 3,277 772 254 6.07% 6.25% had a decrease of 42% from KSh 5.8 Non-performing loans Net of provisions & suspended interest 4,370 4,856 6,467 1,640 1,089 47.8 billion in 2016 to KSh 3.36 billion in 2017. 42.2 Total Non-performing loans (Net of interest in suspense) 7,713 8,219 8,788 2,115 1,212 Realisable value of securities 3,788 4,088 4,671 1,050 1,089 Net interest income decreased by 58% 31.3 Net NPL exposure 582 768 1,797 590 - from KSh 3.02 billion in 2016 to KSh 1.26 2013 2014 2015 2016 2017 26.7 24.6 20.6 Total Insider Loans 840 1,452 750 1,000 731 billion. Total non-performing loans fell 19.2 17.9 Core Capital 4,946 5,585 6,970 6,105 4,803 by 6% from KSh 8.2 billion in 2016 to KSh Supplementary Capital 2,040 2,052 1,681 2,139 785 7.7 billion in 2017. TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 6,986 7,637 8,651 8,244 5,587 RETURN ON AVERAGE ASSETS Quick Assets 11,664 14,814 20,283 15,880 17,448 Total risk weighted assets 44,275 47,248 52,778 51,781 43,922 1.52% 1.60% SELECTED PERFORMANCE RATIOS (IN %) 1.41% 1.23% 1.20% Total liabilities/ Total assets 84.37 84.97 87.74 87.28 87.59 Shareholders' funds/ Total assets 15.63 15.03 12.26 12.72 12.41 Total income/ Total assets 11.64 15.86 10.66 10.31 11.80 2013 2014 2015 2016 2017 Net interest margin/ Total assets 2.32 5.40 3.60 3.71 4.05 Profitability (KSh Billions) Net advances/ Total assets 50.54 56.33 54.56 61.81 59.02 Total deposits/ Total assets 61.51 61.61 68.57 67.99 72.58 2017 2016 2015 Gov. securities & placement with other banks/Total assets 12.02 15.04 20.68 15.97 26.61 Gov. securities & cash and balances with CBK/Total deposits 18.44 20.67 17.75 20.80 24.43 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 14.42 13.82 15.44 17.85 30.12 Total advances/ Total deposits 100.76 108.64 86.47 92.74 81.97 5.2 Shareholders' funds/ Total deposits 25.40 24.40 17.88 18.71 17.10 4.4 Average Cost of Funds (COF) 4.77 6.08 6.14 6.38 7.28 2.10% 2.05% 1.92% 3.7 Cost Income Ratio (CIR) 77.02 53.95 80.42 81.06 65.60 1.67% 1.64% 3.3 2.7 2.8 Gross Non-Performing Loans/ Total loans & advances 31.47 28.80 23.72 6.15 4.28 2.2 2.2 1.9 1.9 2.0 Loans Loss Provisions/ Operating income 97.63 62.44 64.10 14.58 3.97 1.5 Core capital/ Total deposit liabilities 14.84 16.19 14.67 14.43 12.56 Core capital/ Total risk weighted assets 11.17 11.82 13.21 11.79 10.93 PROFIT BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Quick assets / Total liabilities 25.51 31.14 33.37 29.24 37.81 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total deposit liabilities 34.99 42.94 42.70 37.54 45.63 218 BANKING SURVEY | 2018 BANKING SURVEY | 2018 219 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier II Directors Contacts Financial Snapshot Ecobank (Kenya) 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Ronald Marambii-CEO P.O. Box 69562 - 00400, Nairobi Total Assets (Ksh in 'billions') 54.2 Total Assets 53,456 47,124 52,427 45,934 36,907 Telephone: +254-20-3275000, 2211175, Core Capital (Ksh in 'billions') 4.9 Total Liabilities 47,017 39,817 44,866 38,107 33,517 Fax: +254-20-2211477 Profit Before Tax (Ksh in 'thousands') 0.0 Ecobank is a private ban solely owned by Net Assets (Shareholders' Funds) 6,439 7,307 7,561 7,828 3,390 Email: [email protected] the Ecobank Transnational which is an Tier Ranking 7 Non Perfoming Loans/Total Loans 23.0 Customer Deposits 43,686 32,243 34,479 32,414 25,351 Website: www.boakenya.com international bank. The bank operates Overall Ranking 30 Return on Assets (%) 0.1 Other Deposits 2,170 5,073 - - - Core Capital/Total Deposit Liability (%) 0.4 Total Deposits 45,856 37,316 34,479 32,414 25,351 a huge branch network but recently Return on Capital Employed (%) 14.8 Loans and advances to customers (net of provisions) 16,371 24,474 29,621 22,982 18,460 announced closure of its branches in Total loans and advances to customers 21,456 27,393 30,902 24,116 19,943 Kenya. Cash and balances with CBK - 2,248 3,588 2,956 3,505 Kenya government securities 6,064 8,456 9,144 9,897 8,247 LOAN LOSS PROVISION / OPERATING INCOME Placements with other banks 19,579 6,076 5,396 5,429 2,244 The bank recorded a loss of KSh 1.4 Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) billion in 2017 this is a 50% improvement Income from a loss of KSh 2.9 billion that was 2017 2016 2015 44.38% Interest on loans and advances 2,471 3,596 3,246 2,320 2,149 recorded in 2016.Total assets grew by Interest on government securities 961 (1,196) 787 598 600 29.14% 28.38% 13% from KSh 47 billion recorded in Interest on placements and bank balances 251 170 161 75 20 2016 to KSh 53 billion recorded in 2017. 1.80% 6.63% Other Interest Income 0 1 1 1 1 Customer deposits grew by 35% in 5.8 Total Interest Income 3,683 2,571 4,194 2,994 2,770 2013 2014 2015 2016 2017 5.3 Net Interest Income 2,219 290 1,710 997 901 2017 to KSh 43 billion compared to KSh Foreign exchange gain (loss) 363 267 247 218 54 32billion that was recorded in 2016.Loans 3.4 Fees and Commissions Income (net) 184 424 960 844 542 and advances declined by 33% from Other operating Income 172 307 107 111 269 KSh 24 billion in 2016 to KSh16 billion NON PERFORMING LOANS / TOTAL LOANS Total net operating income 2,938 1,287 3,024 2,170 1,767 0.7 0.7 0.8 0.3 0.2 0.3 in 2017.Interest on loans and advances Total income 4,402 3,568 5,509 4,166 3,636 declined by 31% in 2017 to KSh2.4 billion INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses from KSh 3.5 billion in 2016.Net interest 13.09% 14.31% ADVANCES INCOME Interest on deposits 1,215 1,845 1,680 1,520 1,382 10.78% Interest on borrowed funds, deposits and placements from other banks 249 436 805 476 488 income greatly increased by 666% from Other interest expense - - - - - KSh 290 million in 2016 to KSh 2.2 billion 2.79% 1.95% Total interest expense 1,464 2,281 2,485 1,996 1,869 in 2017. Total non-performing loans General administrative expenses 1,969 1,998 1,664 1,591 1,485 increased by 55% in 2017 to KSh 6.1 2013 2014 2015 2016 2017 Other operating expenses 627 969 1,219 1,135 1,059 billion from KSh 3.9 billion in 2016. Total operating expenses 2,596 2,967 2,883 2,726 2,543 Total expenditure 4,060 5,248 5,367 4,722 4,413 Operating profits before provisions 342 (1,680) 141 (556) (777) CORE CAPITAL/TOTAL DEPOSIT LIABILITY Losses on loans and advances 1,776 1,209 48 (56) 320 Profits Before Tax (after exceptional Items) (1,434) (2,889) 93 (500) (1,097) DISCLOSURES (KSH IN MILLIONS) Total provisions (Loan loss provision and interest in suspense) 5,085 2,919 1,281 1,134 1,483 7.36% 6.74% Non-performing loans Net of provisions & suspended interest 3,202 2,440 1,163 1,327 710 5.71% 6.56% 6.67% Total Non-performing loans (Net of interest in suspense) 6,171 3,985 1,841 2,002 1,436 Realisable value of securities 3,202 2,440 1,163 1,327 710 Net NPL exposure - - (0) - - Total Insider Loans 1,297 1,365 899 857 1,283 2013 2014 2015 2016 2017 Core Capital 5,767 6,961 9,083 9,044 5,079 Supplementary Capital 228 645 821 1,451 1,940 Total Capital 5,995 7,606 9,904 10,495 7,018 Quick Assets 25,643 16,780 18,129 18,282 13,996 RETURN ON AVERAGE ASSETS Total risk weighted assets 37,495 39,119 39,685 32,967 22,968 SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 87.96 84.49 85.58 82.96 90.81 Shareholders' funds/ Total assets 12.04 15.51 14.42 17.04 9.19 0.84% Total income/ Total assets 8.24 7.57 10.51 9.07 9.85 0.16% -0.01% 0.03% Profitability (KSh Billions) Net interest margin/ Total assets 4.15 0.61 3.26 2.17 2.44 2013 2014 -0.99%2015 2016 2017 Net advances/ Total assets 30.63 51.93 56.50 50.03 50.02 2017 2016 2015 Total deposits/ Total assets 85.78 79.19 65.77 70.57 68.69 Gov. securities & placement with other banks/Total assets 47.97 30.84 27.73 33.37 28.42 Gov. securities & cash and balances with CBK/Total deposits 11.34 22.71 24.29 27.98 31.84 Gov. securities & cash and balances with CBK/Total advances 28.26 30.87 29.59 41.04 41.35 Total advances/ Total deposits 46.79 73.41 89.63 74.40 78.67 AVERAGE COST OF FUNDS 6.5 6.3 Shareholders' funds/ Total deposits 14.04 19.58 21.93 24.15 13.37 5.4 Average Cost of Funds (COF) 3.15 5.86 5.58 5.31 5.64 3.40% 4.1 Cost Income Ratio (CIR) 88.36 230.55 95.32 125.61 143.97 3.07% 3.01% 3.5 3.8 3.4 3.6 2.46% Gross Non-Performing Loans/ Total loans & advances 38.62 19.56 7.91 10.20 11.00 2.05% 2.9 0.0 Loans Loss Provisions/ Operating income 101.06 120.06 22.42 31.10 41.12 Core capital/ Total deposit liabilities 12.58 18.65 26.34 27.90 20.03 PROFIT (0.0) BEFORE (1.4) TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 15.38 17.79 22.89 27.43 22.11 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total liabilities 54.54 42.14 40.41 47.98 41.76 Quick assets / Total deposit liabilities 55.92 44.97 52.58 56.40 55.21 220 BANKING SURVEY | 2018 BANKING SURVEY | 2018 221 INDIVIDUAL BANKS INDIVIDUAL BANKS Tier II - Aggregate Aggregate Tier II 2017 2016 2015 2014 2013 Directors Contacts Financial Snapshot BALANCE SHEET (KSH IN MILLIONS) P.O. Box 45626 - 00100, Nairobi Samuel Ashitey Adjei- CEO Total Assets (Ksh in 'billions') 53.5 Total Assets 676,199 651,946 802,938 747,654 595,361 Telephone: +254-20-2883000, 2249633/4, Core Capital (Ksh in 'billions') 5.8 Total Liabilities 568,634 552,850 697,278 642,334 514,291 0722-204863 Profit Before Tax (Ksh in 'thousands') -1.4 Net Assets (Shareholders' Funds) 107,566 99,096 105,660 105,321 81,070 Fax: +254-20-2883304, 2883815 Non Perfoming Loans/Total Loans 0.0 Customer Deposits 480,339 443,626 580,218 558,028 436,272 Tier Ranking 8 Email: [email protected] Return on Assets (%) -2.7 Other Deposits 30,554 27,180 35,578 22,121 26,499 Total Deposits 510,893 470,806 615,796 580,149 462,771 Overall Ranking 32 Website: www.ecobank.com Core Capital/Total Deposit Liability (%) -22.3 Loans and advances to customers (net of provisions) 328,085 338,108 459,687 396,322 303,352 Return on Capital Employed (%) 12.6 Total loans and advances to customers 365,312 368,263 479,627 408,080 312,705 Cash and balances with CBK 41,069 41,226 65,709 68,089 41,015 Kenya government securities 191,449 179,062 160,379 161,938 150,118 LOAN LOSS PROVISION / OPERATING INCOME Placements with other banks 38,148 20,236 45,044 52,760 44,332 Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income 38.73% 32.60% 2017 2016 2015 Interest on loans and advances 38,764 50,583 58,364 55,572 45,568 Interest on government securities 21,141 17,551 17,429 16,161 14,593 13.27% 10.03% 7.23% Interest on placements and bank balances 1,226 1,306 4,369 1,860 1,896 2013 2014 2015 2016 2017 Other Interest Income 271 386 497 584 504 3.6 Total Interest Income 61,402 69,826 80,658 74,177 62,560 3.2 Net Interest Income 35,449 39,308 38,886 41,859 35,872 2.5 Foreign exchange gain (loss) 3,947 2,964 5,158 4,195 3,596 NON PERFORMING LOANS / TOTAL LOANS Fees and Commissions Income (net) 6,587 6,548 10,729 10,236 8,014 Other operating Income 3,298 3,362 1,619 1,608 2,257 Total net operating income 49,308 52,203 56,392 57,898 49,739 0.2 0.4 1.0 0.3 0.2 0.2 12.46% Total income 75,278 82,721 98,164 90,216 76,427 6.31% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses 3.55% 3.29% 2.55% ADVANCES INCOME Interest on deposits 20,619 24,743 35,219 27,637 23,224 Interest on borrowed funds, deposits and placements from other banks 1,621 2,126 4,038 2,788 1,733 2013 2014 2015 2016 2017 Other interest expense 3,713 3,650 2,515 1,893 1,515 Total interest expense 25,953 30,518 41,772 32,318 26,687 General administrative expenses 19,054 19,011 20,610 20,259 17,614 CORE CAPITAL/TOTAL DEPOSIT LIABILITY Other operating expenses 10,188 11,269 13,299 12,001 8,994 Total operating expenses 29,242 30,280 33,909 32,260 26,609 Balance Sheet (KSh Billions) Total expenditure 55,195 60,798 75,681 64,577 53,296 9.00% 8.50% Operating profits before provisions 20,083 21,923 22,483 25,638 23,131 6.46% 6.02% 2017 2016 2015 Losses on loans and advances 5,642 8,263 9,866 3,000 3,196 4.06% Profits Before Tax (after exceptional Items) 14,441 13,661 12,618 22,638 19,935 DISCLOSURES (KSH IN MILLIONS) Total provisions (Loan loss provision and interest in suspense) 37,227 30,155 19,939 11,758 9,353 2013 2014 2015 2016 2017 53.5 52.4 Non-performing loans Net of provisions & suspended interest 34,054 35,517 29,052 15,260 9,342 47.1 43.7 Total Non-performing loans (Net of interest in suspense) 59,239 55,447 42,371 24,044 15,537 Realisable value of securities 33,287 34,616 27,284 14,160 9,216 32.2 34.5 RETURN ON AVERAGE ASSETS 29.6 Net NPL exposure 766 900 1,767 1,100 126 24.5 Total Insider Loans 15,783 16,526 28,432 18,971 15,506 16.4 Core Capital 90,426 88,972 99,799 96,233 73,824 Supplementary Capital 9,118 9,448 14,575 8,342 7,179 Total Capital 99,543 98,420 114,374 104,575 81,002 0.06% TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Quick Assets 270,665 240,524 271,132 282,787 235,466 2013 2014 2015 2016 2017 Total risk weighted assets 492,249 486,600 572,965 533,544 370,315 -0.39% -1.03% -0.92% SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 84.09 84.80 86.84 85.91 86.38 Shareholders' funds/ Total assets 15.91 15.20 13.16 14.09 13.62 -1.87% Total income/ Total assets 11.13 12.69 12.23 12.07 12.84 Net interest margin/ Total assets 5.24 6.03 4.84 5.60 6.03 Profitability (KSh Billions) Net advances/ Total assets 48.52 51.86 57.25 53.01 50.95 AVERAGE COST OF FUNDS Total deposits/ Total assets 75.55 72.22 76.69 77.60 77.73 2017 2016 2015 Gov. securities & placement with other banks/Total assets 33.95 30.57 25.58 28.72 32.66 Gov. securities & cash and balances with CBK/Total deposits 34.39 33.79 28.16 30.77 32.10 Gov. securities & cash and balances with CBK/Total advances 52.41 48.62 33.44 39.68 48.01 1.93% 1.95% Total advances/ Total deposits 71.50 78.22 77.89 70.34 67.57 1.82% 1.76% Shareholders' funds/ Total deposits 21.05 21.05 17.16 18.15 17.52 4.2 3.7 Average Cost of Funds (COF) 4.10 5.25 5.76 4.87 5.04 2.9 3.0 1.11% 2.6 2.3 2.5 Cost Income Ratio (CIR) 59.30 58.00 60.13 55.72 53.50 0.1 1.5 1.3 Gross Non-Performing Loans/ Total loans & advances 19.51 17.83 10.21 6.62 5.98 Loans Loss Provisions/ Operating income 51.08 38.18 23.62 15.17 12.45 PROFIT (1.4) BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Core capital/ Total deposit liabilities 17.70 18.90 16.21 16.59 15.95 EXPENSES INCOME (2.9) Core capital/ Total risk weighted assets 18.37 18.28 17.42 18.04 19.94 Quick assets / Total liabilities 47.60 43.51 38.88 44.02 45.78 2013 2014 2015 2016 2017 Quick assets / Total deposit liabilities 52.98 51.09 44.03 48.74 50.88 222 BANKING SURVEY | 2018 BANKING SURVEY | 2018 223 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier III Gulf African Bank 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) Strategic Focus LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) Total Assets 31,316 27,156 24,714 19,754 16,054 Total Liabilities 26,897 22,781 20,836 16,607 13,368 The Bank was a medium sized commercial Net Assets (Shareholders' Funds) 4,420 4,376 3,877 3,147 2,686 2017 2016 2015 bank in Kenya that was founded in 2008. Customer Deposits 26,074 21,755 19,024 15,795 12,970 It is the second bank in Kenya operating 51.08% Other Deposits 31 627 1,156 414 52 38.18% purely under the Sharia laws. The bank 23.62% Total Deposits 26,105 22,382 20,179 16,209 13,022 12.45% 15.17% Loans and advances to customers (net of provisions) 19,384 16,193 15,428 13,791 10,665 was incorporated on August 9th, 2006 58.4 Total loans and advances to customers 20,144 16,686 15,864 14,068 10,858 and started operations as a commercial 2013 2014 2015 2016 2017 50.6 Cash and balances with CBK 3,429 3,471 2,198 1,600 1,836 bank in January 8th 2008, in a historic Kenya government securities - - - - - event, where it was granted the country’s 38.8 Placements with other banks 7,046 6,285 5,998 3,464 2,700 first fully-fledged commercial banking PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) NON PERFORMING LOANS / TOTAL LOANS Income license as a dedicated Islamic bank, by the 6.6 6.5 10.7 1.2 1.3 4.4 Interest on loans and advances 2,122 2,176 1,866 1,624 1,351 Central Bank of Kenya. In 2016 the bank Interest on government securities - - - - - diversified the revenue income through INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Interest on placements and bank balances 389 340 584 292 198 ADVANCES INCOME introducing more customer services Other Interest Income - - - - - and enhancing efficiency through cost Total Interest Income 2,512 2,515 2,450 1,916 1,549 17.83% 19.51% management initiatives. 10.21% Net Interest Income 1,953 2,050 2,010 1,552 1,251 5.98% 6.62% Foreign exchange gain (loss) 257 124 164 142 121 Fees and Commissions Income (net) 419 274 673 220 183 The bank recorded a net profit of KSh Other operating Income 2 0 0 0 22 254 million in 2017 which is a 66% 2013 2014 2015 2016 2017 Total net operating income 2,631 2,448 2,848 1,915 1,576 decrease compared to KSh 754million Total income 3,189 2,913 3,288 2,278 1,874 Expenses recorded in 2016.Total assets increased Balance Sheet (KSh Billions) Interest on deposits 530 431 415 351 277 by 15% from KSh 27 billion in 2016 to CORE CAPITAL/TOTAL DEPOSIT LIABILITY Interest on borrowed funds, deposits and placements from other banks 7 34 25 13 21 KSh 31 billion recorded in 2017.Customer 2017 2016 2015 Other interest expense 22 - - - - deposits in 2017 was KSh 26 billion Total interest expense 558 465 440 363 298 which is a 20% increase compared to General administrative expenses 1,225 1,177 1,134 905 738 18.90% KSh 21 billion recorded in 2016.Loans 17.70% Other operating expenses 507 464 417 363 397 16.59% and advances grew by 20% from KSh 16 15.95% 16.21% Total operating expenses 1,733 1,642 1,551 1,268 1,135 billion recorded in 2016 to KSh 19 billion 802.9 Total expenditure 2,291 2,107 1,991 1,631 1,433 Operating profits before provisions 898 806 1,297 647 442 recorded in 2017.Net interest income 676.2 651.9 Losses on loans and advances 644 52 203 31 43 declined by 5% from KSh 2.0 billion in 580.2 Profits Before Tax (after exceptional Items) 254 754 1,094 615 398 480.3 2016 to KSh 1.9 billion in 2017.Total non- 443.6 459.7 DISCLOSURES (KSH IN MILLIONS) 2013 2014 2015 2016 2017 performing loans increased by 20% from 328.1 338.1 Total provisions (Loan loss provision and interest in suspense) 760 493 436 277 193 KSh 1.4 billion in 2016 to KSh 1.8 billion Non-performing loans Net of provisions & suspended interest 1,201 1,124 962 756 498 Total Non-performing loans (Net of interest in suspense) 1,800 1,494 1,299 896 621 in 2017. RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Realisable value of securities 1,167 1,182 992 756 498 Net NPL exposure 34 (58) (31) - - Total Insider Loans 1,284 1,256 629 503 361 Core Capital 4,247 4,239 3,877 3,056 2,668 3.68% 3.37% Supplementary Capital 589 27 - 91 18 1.88% 2.17% Total Capital 4,836 4,266 3,877 3,147 2,686 1.63% Quick Assets 10,475 9,756 8,196 5,063 4,537 Total risk weighted assets 29,847 22,788 24,593 23,285 14,804 SELECTED PERFORMANCE RATIOS (IN %) 2013 2014 2015 2016 2017 Total liabilities/ Total assets 85.89 83.89 84.31 84.07 83.27 Profitability (KSh Billions) Shareholders' funds/ Total assets 14.11 16.11 15.69 15.93 16.73 Total income/ Total assets 10.18 10.73 13.30 11.53 11.67 2017 2016 2015 Net interest margin/ Total assets 6.24 7.55 8.13 7.86 7.79 AVERAGE COST OF FUNDS Net advances/ Total assets 61.90 59.63 62.43 69.81 66.43 Total deposits/ Total assets 83.36 82.42 81.65 82.06 81.12 Gov. securities & placement with other banks/Total assets 22.50 23.14 24.27 17.53 16.82 Gov. securities & cash and balances with CBK/Total deposits 10.95 12.78 8.89 8.10 11.44 80.7 Gov. securities & cash and balances with CBK/Total advances - - - - - 69.8 Total advances/ Total deposits 77.17 74.55 78.61 86.79 83.38 6.01% 61.4 5.56% 5.43% 56.4 Shareholders' funds/ Total deposits 16.93 19.55 19.21 19.41 20.63 4.50% 49.3 52.2 4.22% 41.8 Average Cost of Funds (COF) 2.02 2.08 2.18 2.24 2.29 30.5 Cost Income Ratio (CIR) 65.87 67.06 54.47 66.23 71.98 14.4 13.7 12.6 26.0 Gross Non-Performing Loans/ Total loans & advances 9.74 9.69 8.81 7.34 6.36 Loans Loss Provisions/ Operating income 22.75 15.10 11.85 7.34 7.85 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Core capital/ Total deposit liabilities 16.27 18.94 19.21 18.85 20.49 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Core capital/ Total risk weighted assets 14.23 18.60 15.77 13.12 18.02 Quick assets / Total liabilities 38.94 42.83 39.34 30.49 33.94 Quick assets / Total deposit liabilities 40.13 43.59 40.62 31.24 34.84 224 BANKING SURVEY | 2018 BANKING SURVEY | 2018 225 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier III Directors Contacts Financial Snapshot GT Bank Kenya 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Abdalla Abdulkhalik-MD P.O. Box 43683 - 00100, Nairobi Total Assets (Ksh in 'billions') 31.3 Total Assets 27,628 29,619 29,374 32,992 25,638 Telephone: +254-20-2740000, 2718608/9, Core Capital (Ksh in 'billions') 4.2 Total Liabilities 19,019 21,253 21,468 25,827 19,547 Guaranty Trust Bank plc, is a foremost Fax: +254-20-2715655 Profit Before Tax (Ksh in 'thousands') 0.3 Net Assets (Shareholders' Funds) 8,609 8,366 7,906 7,165 6,091 Banking Group headquartered in Lagos, Email: [email protected] Non Perfoming Loans/Total Loans 8.9 Customer Deposits 15,141 16,562 15,490 17,734 18,447 Tier Ranking 5 Nigeria, and listed on the Nigeria and Website: www.gulfafricanbank.com Return on Assets (%) 0.8 Other Deposits 1,461 1,853 2,142 3,304 540 Overall Ranking 22 London Stock Exchanges. In 2013, it Core Capital/Total Deposit Liability (%) 5.7 Total Deposits 16,601 18,415 17,631 21,038 18,987 acquired a 70% controlling stake of Return on Capital Employed (%) 16.3 Loans and advances to customers (net of provisions) 13,204 12,906 12,422 12,441 10,303 Total loans and advances to customers 13,746 13,418 12,826 12,851 10,713 then Fina Bank Group which had been Cash and balances with CBK 1,755 2,070 1,713 2,402 1,048 in operation in Kenya for over 25 years Kenya government securities 6,904 8,417 10,345 10,108 3,715 with subsidiaries in Rwanda and Uganda. Placements with other banks 1,483 2,260 839 3,836 5,684 LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) The remaining 30% shareholding is split PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income between Dhabaria Limited (7.83%), 2017 2016 2015 6.50% Interest on loans and advances 1,596 1,907 1,728 1,551 1,484 Dhanji Hansraj Chandaria (7.97%), Rare 4.31% Interest on government securities 669 1,083 986 889 517 Limited (7.05%) and Rameshkumar 2.24% 3.39% 2.10% Interest on placements and bank balances 68 58 287 94 47 M. Patel (7.15%). GT Bank has been in Other Interest Income 14 14 35 31 37 2.2 operation for over 25 years and today 2013 2014 2015 2016 2017 2.1 Total Interest Income 2,346 3,063 3,036 2,566 2,084 1.9 operates over 200 branches in Nigeria, Net Interest Income 1,338 1,753 1,700 1,448 1,106 Foreign exchange gain (loss) 69 72 79 63 75 Gambia, Ghana, Liberia, Sierra Leone, Fees and Commissions Income (net) 311 342 245 249 236 Cote d’lvoire, Kenya, Uganda, Rwanda Other operating Income 156 51 90 77 91 and the United Kingdom. GT Bank’s NON PERFORMING LOANS / TOTAL LOANS 0.7 0.4 0.3 0.4 0.3 0.6 Total net operating income 1,874 2,217 2,114 1,838 1,507 expansion into East Africa is in line with Total income 2,882 3,527 3,449 2,956 2,485 the Bank’s spirit of being ‘Proudly African INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses 2.52% 2.77% 2.78% ADVANCES INCOME and Truly International’. 1.82% 2.10% Interest on deposits 858 1,171 1,107 1,025 940 Interest on borrowed funds, deposits and placements from other banks 23 104 210 74 19 Other interest expense 128 34 19 19 19 The bank recorded a profit of KSh 241 Total interest expense 1,008 1,310 1,336 1,118 977 million in 2017 which is a 63% decline 2013 2014 2015 2016 2017 General administrative expenses 816 890 927 772 721 compared to KSh 659 million recorded Other operating expenses 533 591 547 345 340 in 2016.Total assets declined by 7% from Balance Sheet (KSh Billions) Total operating expenses 1,349 1,481 1,474 1,116 1,061 Total expenditure 2,357 2,791 2,810 2,234 2,039 KSh 29 billion recorded in 2016.Customer CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions 525 736 639 722 446 deposits declined by 9% to KSh 15 billion 2017 2016 2015 Losses on loans and advances 284 76 93 35 33 in 2017 from KSh 16 billion in 2016. Profits Before Tax (after exceptional Items) 241 659 547 687 413 Loans and advances slightly increased by DISCLOSURES (KSH IN MILLIONS) 2% from KSh 12 billion in 2016 to KSh 5.85% Total provisions (Loan loss provision and interest in suspense) 542 512 403 410 409 5.39% 5.49% 5.41% 31.3 13 billion in 2017.Interest on loans and 4.65% Non-performing loans Net of provisions & suspended interest 879 481 167 62 49 27.2 26.1 24.7 Total Non-performing loans (Net of interest in suspense) 1,142 744 394 269 259 advances declined by 16% in 2017 to KSh 21.8 Realisable value of securities 879 481 167 62 49 1.5 billion compared to KSh 1.9 billion 19.0 19.4 2013 2014 2015 2016 2017 16.2 15.4 Net NPL exposure - - (0) - - recorded in 2016.Net interest income Total Insider Loans 70 416 274 297 210 declined by 24% from KSh 1.7 billion in Core Capital 5,257 5,462 5,023 4,667 4,142 2016 to KSh 1.3 billion in 2017.Total non- Supplementary Capital 98 118 149 195 211 performing loans was KSh 1.1 billion in Total Capital 5,354 5,580 5,172 4,862 4,353 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES 2017 which is a 54% increase compared Quick Assets 10,142 12,747 12,897 16,346 10,446 Total risk weighted assets 19,923 20,599 18,647 18,750 12,892 to KSh 744 million recorded in 2016. SELECTED PERFORMANCE RATIOS (IN %) 1.41% Total liabilities/ Total assets 68.84 71.75 73.09 78.28 76.24 0.77% 0.98% 0.83% 0.25% Shareholders' funds/ Total assets 31.16 28.25 26.91 21.72 23.76 Total income/ Total assets 10.43 11.91 11.74 8.96 9.69 2013 2014 2015 2016 2017 Profitability (KSh Billions) Net interest margin/ Total assets 4.84 5.92 5.79 4.39 4.32 Net advances/ Total assets 47.79 43.57 42.29 37.71 40.19 2017 2016 2015 Total deposits/ Total assets 60.09 62.17 60.02 63.77 74.06 Gov. securities & placement with other banks/Total assets 30.36 36.05 38.07 42.27 36.66 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total deposits 31.34 35.41 41.05 37.92 18.58 Gov. securities & cash and balances with CBK/Total advances 50.23 62.73 80.66 78.66 34.68 2.8 Total advances/ Total deposits 82.80 72.87 72.74 61.08 56.42 2.5 2.5 2.6 2.5 2.4 Shareholders' funds/ Total deposits 51.86 45.43 44.84 34.06 32.08 0.71% Average Cost of Funds (COF) 4.72 6.50 7.39 5.18 5.00 0.69% 0.69% Cost Income Ratio (CIR) 71.99 66.82 69.75 60.74 70.42 0.62% 0.63% 1.1 Gross Non-Performing Loans/ Total loans & advances 10.34 7.40 4.45 3.67 4.28 Loans Loss Provisions/ Operating income 14.06 11.86 10.73 11.26 13.94 0.3 0.8 0.6 0.5 0.4 Core capital/ Total deposit liabilities 31.66 29.66 28.49 22.18 21.81 PROFIT BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 26.38 26.52 26.94 24.89 32.13 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total liabilities 53.32 59.98 60.07 63.29 53.44 Quick assets / Total deposit liabilities 61.09 69.22 73.15 77.70 55.02 226 BANKING SURVEY | 2018 BANKING SURVEY | 2018 227 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier III Directors Contacts Financial Snapshot Victoria Commercial Bank 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Ibukunoluwa Odegbaike-MD P.O. Box 20613 - 00200, Nairobi Total Assets (Ksh in 'billions') 27.6 Total Assets 25,985 22,403 20,020 17,244 13,644 Telephone: +254-20-3284000, 2246943, 2253153, Core Capital (Ksh in 'billions') 5.3 Total Liabilities 20,373 17,343 16,509 14,369 11,116 Victoria Commercial Bank Ltd is amid- 2247113 Profit Before Tax (Ksh in 'thousands') 0.2 Net Assets (Shareholders’ Funds) 5,612 5,060 3,512 2,876 2,528 sized commercial bank, with its offices Fax: +254-20-2247164/2229696 Non Perfoming Loans/Total Loans 8.3 Customer Deposits 18,677 15,696 14,024 12,289 9,044 in Upper Hill, Nairobi Kenya. The Tier Ranking 3 Email: [email protected] Return on Assets (%) 0.9 Other Deposits 209 - 1,077 637 166 company was initially licensed in 1987 Overall Ranking 17 Website: www.finabank.com Core Capital/Total Deposit Liability (%) 2.8 Total Deposits 18,886 15,696 15,101 12,925 9,210 as a finance company and opened its Return on Capital Employed (%) 31.7 Loans and advances to customers (net of provisions) 18,870 15,293 13,124 10,979 8,363 Total loans and advances to customers 18,887 15,293 13,124 10,979 8,363 doors for business in October of the same Cash and balances with CBK 1,748 1,339 1,320 1,533 469 year. Victoria Commercial bank has 72 Kenya government securities 2,587 2,994 3,348 2,400 1,166 individuals owning 62.47% shareholding. LOAN LOSS PROVISION / OPERATING INCOME Placements with other banks 1,542 1,712 1,492 1,040 1,932 The lender has been under the leadership Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income of Dr. Yogesh K. Pattni who serves as the 4.22% 4.26% 2017 2016 2015 3.41% 3.25% 3.59% Interest on loans and advances 2,180 2,025 1,885 1,427 992 Managing. Mr. Pattni has been with VCB Interest on government securities 319 356 297 188 238 since its inception. He started his banking Interest on placements and bank balances 43 36 116 64 49 career with Equatorial Commercial Bank Other Interest Income 16 34 82 76 96 Ltd before moving on to Commercial 2013 2014 2015 2016 2017 Total Interest Income 2,559 2,451 2,380 1,755 1,375 1.9 Bank of Africa Ltd. He continues to lead 1.7 Net Interest Income 1,284 1,148 1,054 852 780 1.6 Foreign exchange gain (loss) 30 26 28 23 26 the Victoria Commercial Bank into new Fees and Commissions Income (net) 271 197 179 137 128 frontiers NON PERFORMING LOANS / TOTAL LOANS Other operating Income 58 37 5 57 41 Total net operating income 1,643 1,416 1,266 1,069 975 0.3 0.3 0.2 0.1 0.1 0.3 The net profit of 2017 increased by 7% Total income 2,917 2,718 2,591 1,972 1,570 3.13% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses from KSh 796 million in 2016 to KSh 849 2.24% ADVANCES INCOME Interest on deposits 1,175 1,194 1,212 781 534 million in 2017.Total assets grew by 16% 1.30% 1.11% 1.35% Interest on borrowed funds, deposits and placements from other banks - 7 14 19 12 to KSh 25.9 billion in 2017 from KSh Other interest expense 100 102 100 103 49 22.4 billion in 2016. Customer Deposits 2013 2014 2015 2016 2017 Total interest expense 1,274 1,303 1,325 903 595 increased by 19% from KSh 15.6 billion General administrative expenses 517 427 389 299 264 to KSh 18.6 billion in 2017.Loans and Other operating expenses 242 180 180 124 121 advances grew by 23% from KSh 15.3 Balance Sheet (KSh Billions) Total operating expenses 759 608 569 423 385 Total expenditure 2,033 1,910 1,894 1,326 980 billion in 2016 to KSh 18.9 billion in 2017. CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions 884 808 697 646 590 Interest on loans and advances grew by 2017 2016 2015 Losses on loans and advances 35 12 20 11 11 8% from KSh 2.0 billion to KSh 2.2 billion Profits Before Tax (after exceptional Items) 849 796 677 635 579 in 2017.Net interest income increased by DISCLOSURES (KSH IN MILLIONS) 12% from KSh 1.2 billion in 2016 to KSh Total provisions (Loan loss provision and interest in suspense) 17 - - - - 8.63% 8.99% 9.59% 29.6 29.4 1.3 billion in 2017. Total non-performing 6.61% 6.72% 27.6 Non-performing loans Net of provisions & suspended interest - - - - - Total Non-performing loans (Net of interest in suspense) 15 - - - - loans was KSh 15 million in 2017. Realisable value of securities - - - - - 2013 2014 2015 2016 2017 Net NPL exposure - - - - - 15.1 16.6 15.5 13.2 12.9 12.4 Total Insider Loans 299 243 158 229 165 Core Capital 5,363 4,849 3,342 2,615 2,300 Supplementary Capital 154 139 132 140 73 Total Capital 5,517 4,988 3,474 2,756 2,373 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Quick Assets 5,877 6,045 6,159 4,974 3,566 Total risk weighted assets 24,265 19,599 18,004 14,376 11,960 SELECTED PERFORMANCE RATIOS (IN %) 0.71% 0.68% 0.58% 0.53% Total liabilities/ Total assets 78.40 77.42 82.46 83.32 81.47 0.26% Shareholders’ funds/ Total assets 21.60 22.58 17.54 16.68 18.53 Total income/ Total assets 11.23 12.13 12.94 11.43 11.51 2013 2014 2015 2016 2017 Profitability (KSh Billions) Net interest margin/ Total assets 4.94 5.12 5.27 4.94 5.72 Net advances/ Total assets 72.62 68.26 65.56 63.67 61.30 2017 2016 2015 Total deposits/ Total assets 72.68 70.06 75.43 74.95 67.50 Gov. securities & placement with other banks/Total assets 15.89 21.00 24.17 19.95 22.70 Gov. securities & cash and balances with CBK/Total deposits 16.68 19.34 23.31 22.81 11.98 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 13.70 19.57 25.51 21.86 13.94 3.1 3.0 Total advances/ Total deposits 100.00 97.43 86.91 84.94 90.81 Shareholders’ funds/ Total deposits 29.71 32.24 23.25 22.25 27.45 2.3 2.2 2.1 Average Cost of Funds (COF) 5.80 6.98 7.47 5.59 5.10 2.04% 2.06% 1.9 1.73% 1.65% Cost Income Ratio (CIR) 46.17 42.92 44.96 39.60 39.51 1.39% 1.3 1.3 Gross Non-Performing Loans/ Total loans & advances 0.09 - - - - 1.0 Loans Loss Provisions/ Operating income 0.92 - - - - 0.2 0.7 0.5 Core capital/ Total deposit liabilities 28.40 30.89 22.13 20.23 24.97 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 22.10 24.74 18.56 18.19 19.23 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Quick assets / Total liabilities 28.85 34.85 37.31 34.61 32.08 Quick assets / Total deposit liabilities 31.12 38.51 40.78 38.48 38.72 228 BANKING SURVEY | 2018 BANKING SURVEY | 2018 229 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier III Directors Contacts Financial Snapshot ABC Bank 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Dr. Yogesh K. Pattni-MD P.O. Box 41114 - 00100, Nairobi Total Assets (Ksh in 'billions') 26.0 Total Assets 24,804 22,422 22,058 21,439 19,640 Telephone: +254-20-2719499, 2719815, 2710271, Core Capital (Ksh in 'billions') 5.4 Total Liabilities 21,644 19,426 19,222 18,816 17,189 ABC Bank is an indigenous Kenya bank 2716108, 2719814 Profit Before Tax (Ksh in 'thousands') 0.8 Net Assets (Shareholders' Funds) 3,160 2,997 2,837 2,623 2,450 with 34 years’ experience in special niche Fax: +254-20-2713778/2715857 Non Perfoming Loans/Total Loans 0.1 Customer Deposits 19,701 16,078 15,774 16,050 15,905 provision of focused financial services Tier Ranking 1 Email: [email protected] Return on Assets (%) 3.3 Other Deposits 403 344 554 796 342 and solutions to a wide range of client Overall Ranking 7 Website: www.victoriabank.co.ke Core Capital/Total Deposit Liability (%) 15.1 Total Deposits 20,104 16,423 16,329 16,847 16,247 base who include individuals, Small and Return on Capital Employed (%) 28.4 Loans and advances to customers (net of provisions) 15,383 14,229 14,829 13,128 10,851 Total loans and advances to customers 16,371 15,022 15,538 13,513 11,129 Medium Enterprises, and Corporate Cash and balances with CBK 2,346 1,395 1,085 1,110 1,243 organizations, Sacco’s, Learning Kenya government securities 3,325 3,424 3,741 4,705 4,598 Institutions, Religious Institutions and Placements with other banks 1,525 1,230 123 91 835 service providers for various economic LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income sectors. 2017 2016 2015 Interest on loans and advances 2,406 2,621 2,288 1,971 1,764 Interest on government securities 370 393 470 505 506 0.26% The net profit of the bank declined by Interest on placements and bank balances 44 6 4 19 17 9% in 2017 to KSh 203 million compared 0.00% 0.00% 0.00% 0.00% Other Interest Income - 3 26 32 38 2013 2014 2015 2016 2017 2.2 Total Interest Income 2,820 3,022 2,787 2,526 2,325 to KSh 222 million recorded in 2016. 2.0 1.9 Net Interest Income 1,080 992 1,202 1,200 1,090 Total assets increased by 11% from KSh Foreign exchange gain (loss) 44 82 60 133 130 22billion in 2016 to KSh 24 billion in Fees and Commissions Income (net) 467 429 321 307 275 2017.Customer deposits grew by 23% Other operating Income 9 14 9 27 64 in 2017 to KSh19 billion compared to NON PERFORMING LOANS / TOTAL LOANS 0.3 0.2 0.2 0.0 0.0 0.1 Total net operating income 1,600 1,517 1,592 1,666 1,560 KSh 16 billon that was recorded in 2016. Total income 3,340 3,546 3,177 2,993 2,794 INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses Loans and advances grew by 8% from 0.02% ADVANCES INCOME Interest on deposits 1,564 1,690 1,323 1,153 1,149 KSh 14 billon posted in 2016 to KSh 15 Interest on borrowed funds, deposits and placements from other banks 40 190 98 40 19 billion recorded in 2017. Interest on 0.00% 0.00% 0.00% 0.00% Other interest expense 137 150 164 135 66 Loans and advances declined by 8% to Total interest expense 1,740 2,030 1,585 1,327 1,235 KSh 24 billion compared to KSh 26 billion 2013 2014 2015 2016 2017 General administrative expenses 923 863 791 798 666 recorded in 2016.Net interest income in Other operating expenses 385 330 368 419 303 2017 was KSh 1.0 billion which is a 9% Total operating expenses 1,308 1,193 1,159 1,216 970 Balance Sheet (KSh Billions) Total expenditure 3,048 3,222 2,744 2,543 2,204 increase compared to KSh 992 million CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions 292 324 433 450 590 recorded in 2016. Total non-performing 2017 2016 2015 Losses on loans and advances 90 102 78 132 12 loans increased by 27% to KSh 2.9 billion Profits Before Tax (after exceptional Items) 203 222 355 318 578 in 2017 compared to KSh 2.2 billion 8.58% DISCLOSURES (KSH IN MILLIONS) 6.94% 7.89% recorded in 2016. 5.62% 6.15% Total provisions (Loan loss provision and interest in suspense) 988 793 710 386 278 26.0 Non-performing loans Net of provisions & suspended interest 2,547 2,047 1,967 499 346 22.4 Total Non-performing loans (Net of interest in suspense) 2,903 2,283 2,163 680 481 20.0 18.7 18.9 Realisable value of securities 2,518 1,981 1,967 499 346 15.7 15.3 Net NPL exposure 29 66 - - - 2013 2014 2015 2016 2017 14.0 13.1 Total Insider Loans 776 696 570 492 426 Core Capital 2,488 2,368 2,181 1,928 1,774 Supplementary Capital 418 601 1,181 1,017 99 Total Capital 2,906 2,969 3,362 2,945 1,873 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES RETURN ON AVERAGE ASSETS Quick Assets 7,196 6,049 4,949 5,906 6,676 Total risk weighted assets 19,239 18,530 18,304 17,096 12,429 SELECTED PERFORMANCE RATIOS (IN %) 1.34% 1.14% 1.01% 1.04% 0.97% Total liabilities/ Total assets 87.26 86.63 87.14 87.77 87.52 Shareholders' funds/ Total assets 12.74 13.37 12.86 12.23 12.48 Total income/ Total assets 13.47 15.82 14.40 13.96 14.23 2013 2014 2015 2016 2017 Profitability (KSh Billions) Net interest margin/ Total assets 4.35 4.43 5.45 5.60 5.55 Net advances/ Total assets 62.02 63.46 67.22 61.23 55.25 Total deposits/ Total assets 81.05 73.24 74.03 78.58 82.73 2017 2016 2015 Gov. securities & placement with other banks/Total assets 19.55 20.76 17.52 22.37 27.66 Gov. securities & cash and balances with CBK/Total deposits 22.86 21.49 21.88 27.13 29.74 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 20.31 22.79 24.08 34.82 41.32 Total advances/ Total deposits 81.43 91.47 95.16 80.21 68.50 2.6 2.5 2.4 Shareholders' funds/ Total deposits 15.72 18.25 17.37 15.57 15.08 2.22% Average Cost of Funds (COF) 7.55 10.64 8.01 6.48 6.90 1.98% 1.6 Cost Income Ratio (CIR) 81.74 78.63 72.80 73.00 62.18 1.78% 1.74% 1.4 1.60% 1.3 1.3 1.3 1.3 Gross Non-Performing Loans/ Total loans & advances 21.59 18.91 17.23 6.55 5.61 Loans Loss Provisions/ Operating income 22.25 15.55 12.30 10.86 8.62 0.8 0.8 0.7 Core capital/ Total deposit liabilities 12.37 14.42 13.36 11.45 10.92 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 12.93 12.78 11.91 11.28 14.27 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Quick assets / Total liabilities 33.25 31.14 25.75 31.39 38.84 Quick assets / Total deposit liabilities 35.79 36.83 30.31 35.06 41.09 230 BANKING SURVEY | 2018 BANKING SURVEY | 2018 231 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier III Directors Contacts Financial Snapshot Sidian Bank 2017 2016 2015 2014 2013 Strategic Focus Mr. Srinatarajan Natarajan- Group MD P.O. Box 46452 - 00100, Nairobi Total Assets (Ksh in 'billions') 24.8 BALANCE SHEET (KSH IN MILLIONS) Telephone: +254-20-4263000, 2223922, Core Capital (Ksh in 'billions') 2.5 Total Assets 19,302 20,875 19,107 15,801 13,199 Total Liabilities 15,855 17,007 15,269 13,367 11,332 22251540/1, 217856/7/8, Profit Before Tax (Ksh in 'thousands') 0.2 Sidian Bank is a full-service commercial Net Assets (Shareholders' Funds) 3,447 3,869 3,838 2,434 1,867 Fax: +254-20-2222437 Non Perfoming Loans/Total Loans 17.7 bank providing an array of financial Customer Deposits 12,761 13,685 13,380 12,065 9,165 services to individuals and enterprises, Tier Ranking 6 Email: [email protected] Return on Assets (%) 0.8 Other Deposits 1,379 2,270 831 - 550 Overall Ranking 28 Website: www.abcthebank.com Core Capital/Total Deposit Liability (%) 6.4 Total Deposits 14,140 15,955 14,211 12,065 9,715 and has been a leading player in Kenya’s Return on Capital Employed (%) 12.4 Loans and advances to customers (net of provisions) 11,409 13,571 12,519 10,608 8,892 enterprise banking sector. Total loans and advances to customers 12,330 14,488 13,317 11,214 9,421 Cash and balances with CBK 2,621 2,216 1,470 1,720 1,076 The bank, formerly known as K-rep Kenya government securities 1,899 2,523 2,362 1,830 2,110 LOAN LOSS PROVISION / OPERATING INCOME Placements with other banks 1,221 886 1,509 949 255 Bank, has its origins within K-rep Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Group, an investment vehicle which was Income established in 1984 as a project that 2017 2016 2015 6.54% Interest on loans and advances 1,762 2,765 2,414 2,160 1,702 supported the development of Small Interest on government securities 232 282 284 223 196 3.19% 3.62% 4.57% and Micro Enterprises through NGO 2.54% Interest on placements and bank balances 20 48 28 10 16 managed programs. In 1987, the project Other Interest Income - - - - - 2.6 2013 2014 2015 2016 2017 Total Interest Income 2,014 3,095 2,726 2,392 1,913 was incorporated as a local NGO. 1989 2.4 2.3 Net Interest Income 1,047 1,901 1,657 1,639 1,398 saw the company change its strategy Foreign exchange gain (loss) 112 71 52 27 12 from supporting NGOs with grants and Fees and Commissions Income (net) 512 511 561 555 490 technical assistance to directly advancing NON PERFORMING LOANS / TOTAL LOANS Other operating Income 32 14 32 152 30 loans to NGOs. 0.5 0.4 0.3 0.04 0.01 0.00 Total net operating income 1,704 2,497 2,302 2,373 1,930 Total income 2,670 3,692 3,372 3,126 2,446 INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses In the same year, K-rep Group established 6.35% ADVANCES INCOME 5.07% 5.56% Interest on deposits 634 932 885 642 373 a micro-credit lending program which 1.93% Interest on borrowed funds, deposits and placements from other banks 154 208 100 30 47 became its core business and growth 1.65% Other interest expense 179 55 85 81 95 area. It also expanded its activities Total interest expense 966 1,195 1,070 753 515 to include research and product 2013 2014 2015 2016 2017 General administrative expenses 1,230 1,361 990 885 637 Other operating expenses 643 764 574 517 588 development, as well as changing its Balance Sheet (KSh Billions) Total operating expenses 1,873 2,125 1,564 1,402 1,224 Technical Assistance (TA) activities to a Total expenditure 2,839 3,319 2,634 2,155 1,739 for-a-fee capacity building service. In Operating profits before provisions (169) 372 738 971 706 CORE CAPITAL/TOTAL DEPOSIT LIABILITY 2017 2016 2015 November 2014, Centum Investment Losses on loans and advances 464 311 218 242 150 Company Limited acquired majority Profits Before Tax (after exceptional Items) (633) 62 520 729 556 4.24% shareholding of K-rep Bank, making it a 3.93% 3.64% DISCLOSURES (KSH IN MILLIONS) 3.21% 3.37% Total provisions (Loan loss provision and interest in suspense) 920 917 798 606 529 subsidiary of Centum. In early 2016, the 24.8 Non-performing loans Net of provisions & suspended interest 1,675 1,542 810 170 242 bank rebranded to Sidian Bank. 22.4 22.1 19.7 Total Non-performing loans (Net of interest in suspense) 2,352 2,147 1,468 707 469 Realisable value of securities 1,606 1,483 810 170 226 16.1 15.8 15.4 The bank posted a loss of KSh 633 million 2013 2014 2015 2016 2017 14.2 14.8 Net NPL exposure 69 59 (0) - 16 Total Insider Loans 529 400 558 605 608 in 2017 which is a 1127% decrease Core Capital 3,325 3,785 3,756 2,337 1,818 compared to a profit of KSh 62 million Supplementary Capital 29 32 30 42 34 that was recorded in 2016. Total assets RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 3,354 3,817 3,785 2,379 1,852 declined by 8% from KSh 20 billion Quick Assets 5,741 5,625 5,341 4,499 3,441 recorded in 2016 to KSh 19 billion Total risk weighted assets 20,377 16,420 15,340 11,571 8,654 recorded in 2017.Customer deposits 0.88% SELECTED PERFORMANCE RATIOS (IN %) declined by 7% in 2017 to KSh 12 billion 0.46% 0.48% Total liabilities/ Total assets 82.14 81.47 79.91 84.60 85.85 0.29% 0.25% Shareholders' funds/ Total assets 17.86 18.53 20.09 15.40 14.15 compared to KSh 13 billion that was Total income/ Total assets 13.83 17.68 17.65 19.78 18.53 recorded in 2016.Loans and advances 2013 2014 2015 2016 2017 Profitability (KSh Billions) Net interest margin/ Total assets 5.43 9.10 8.67 10.37 10.59 declined by 16% in 2017 to KSh 11 billion Net advances/ Total assets 59.11 65.01 65.52 67.14 67.37 compared to KSh 13 billion in 2016. Total deposits/ Total assets 73.26 76.43 74.38 76.36 73.60 2017 2016 2015 Interst on loans and advances was KSh1.7 Gov. securities & placement with other banks/Total assets 16.16 16.33 20.26 17.58 17.91 billion in 2017 this is a 36% decline Gov. securities & cash and balances with CBK/Total deposits 23.42 22.70 20.05 22.47 24.14 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 15.40 17.41 17.74 16.32 22.39 compared to KSh 2.7 billion recorded 3.0 Total advances/ Total deposits 87.20 90.81 93.71 92.95 96.97 in 2016.There was a 45% decline in net 2.8 2.8 Shareholders' funds/ Total deposits 24.38 24.25 27.00 20.17 19.22 interest income to KSh1.0 billion in 2017 3.12% 2.0 Average Cost of Funds (COF) 5.40 6.89 6.63 5.15 3.89 compared to KSh 1.9 billion in 2016.Total 1.7 Cost Income Ratio (CIR) 109.92 85.10 67.95 59.08 63.42 2.31% 2.42% 1.6 1.6 1.5 1.6 non-performing loans increased by 10% 2.05% 1.99% Gross Non-Performing Loans/ Total loans & advances 21.05 16.97 12.07 6.92 8.18 from KSh 2.1 billion in 2016 to KSh 2.3 0.2 0.2 0.4 Loans Loss Provisions/ Operating income 39.73 24.25 28.60 22.63 11.72 Core capital/ Total deposit liabilities 23.51 23.73 26.43 19.37 18.71 billion in 2017. PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 16.32 23.05 24.48 20.20 21.01 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Quick assets / Total liabilities 36.21 33.07 34.98 33.65 30.37 Quick assets / Total deposit liabilities 40.60 35.25 37.58 37.29 35.42 232 BANKING SURVEY | 2018 BANKING SURVEY | 2018 233 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier III Habib A.G. Zurich 2017 2016 2015 2014 2013 Directors Contacts Financial Snapshot Strategic Focus BALANCE SHEET (KSH IN MILLIONS) P.O. Box 25363 - 00603, Nairobi Total Assets (Ksh in 'billions') 19.3 Mr. Chege Thumbi-MD Total Assets 18,708 17,033 14,440 12,147 11,009 Telephone: +254-20-3906000-7, 0711-058000-7, Core Capital (Ksh in 'billions') 3.3 Total Liabilities 15,866 14,068 11,867 9,904 9,166 Habib AG Zurich is a private owned 0732-158000 Profit Before Tax (Ksh in 'thousands') -0.6 Net Assets (Shareholders’ Funds) 2,842 2,965 2,573 2,243 1,843 financial entity that was founded in 1967. Fax: +254-20-3568995 Non Perfoming Loans/Total Loans 19.1 Customer Deposits 12,468 11,723 10,116 8,948 8,336 Tier Ranking 8 The Bank was founded in Switzerland Email: [email protected] Return on Assets (%) -3.3 Other Deposits 1,340 850 2 - 19 Overall Ranking 32 though it operates in countries such Website: www.k-repbank.com Core Capital/Total Deposit Liability (%) -18.4 Total Deposits 13,808 12,573 10,118 8,948 8,355 Loans and advances to customers (net of provisions) 5,496 5,242 5,227 3,358 3,029 as Switzerland, United Kingdom, Return on Capital Employed (%) 23.5 Total loans and advances to customers 5,680 5,361 5,329 3,443 3,125 United Arab Emirates and Kenya. The Cash and balances with CBK 1,317 398 608 619 544 Bank has operations and subsidiaries Kenya government securities 11,273 10,802 7,754 7,303 6,605 in four continents where it offers Placements with other banks 179 118 353 450 409 corporate, consumer, private, retail and LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) correspondent banking products. Income 2017 2016 2015 Interest on loans and advances 559 572 489 337 326 9.93% Interest on government securities 1,133 1,232 825 719 671 The bank posted a net profit of KSh 409 5.66% 7.15% 6.06% Interest on placements and bank balances 2 6 30 17 27 2.93% million in 2017 which is a 34% decline Other Interest Income 0 - - - - 2.8 compared to KSh 621 million that was Total Interest Income 1,694 1,809 1,344 1,072 1,024 2013 2014 2015 2016 2017 2.4 Net Interest Income 938 1,082 855 722 673 recorded in 2016. Total assets grew by 10% from KSh 17 billion recorded in 1.8 Foreign exchange gain (loss) 22 22 25 19 22 Fees and Commissions Income (net) 43 43 46 43 47 2016 to KSh 18 billion recorded in 2017. NON PERFORMING LOANS / TOTAL LOANS Other operating Income 39 41 35 227 36 Customer deposits also increased by 6% Total net operating income 1,041 1,188 961 1,011 778 0.5 0.5 0.6 0.02 0.05 0.03 from KSh 11 billion in 2016 to KSh 12 Total income 1,797 1,915 1,450 1,361 1,129 billion in 2017.Loans and advances in INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses 2017 was KSh 5.4 billion this was a 5% ADVANCES INCOME Interest on deposits 677 675 469 343 346 4.24% 5.26% increase compared to KSh 5.2 billion 3.02% Interest on borrowed funds, deposits and placements from other banks 25 21 8 2 2 2.05% 1.73% Other interest expense 55 31 12 5 3 recorded in 2016.Interest on loans and Total interest expense 756 727 489 350 351 advances declined by 2% from KSh 2013 2014 2015 2016 2017 General administrative expenses 343 321 284 231 213 572million recorded in 2016 to KSh559 Other operating expenses 220 197 151 130 97 million recorded in 2017.Net interest Total operating expenses 563 517 435 360 309 Balance Sheet (KSh Billions) Total expenditure 1,319 1,244 924 711 660 income was KSh 938 million which is CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions 478 671 526 651 469 a 13% decline compared to KSh 1.1 2017 2016 2015 Losses on loans and advances 69 49 16 9 (5) billion that was recorded in 2016.Total Profits Before Tax (after exceptional Items) 409 621 510 642 474 non-performing loans greatly increased DISCLOSURES (KSH IN MILLIONS) by 368% to KSh 486 million in 2017 6.61% Total provisions (Loan loss provision and interest in suspense) 184 119 102 85 96 5.93% 5.88% compared to KSh 104 million recorded 4.68% 4.84% 20.9 Non-performing loans Net of provisions & suspended interest 409 39 14 (2) (1) in 2016. 19.3 19.1 Total Non-performing loans (Net of interest in suspense) 486 104 72 48 65 Realisable value of securities 409 39 14 (2) (1) 13.7 12.8 13.4 13.6 12.5 Net NPL exposure (0) - - - - 2013 2014 2015 2016 2017 11.4 Total Insider Loans 82 87 80 60 52 Core Capital 2,770 2,908 2,495 2,179 1,765 Supplementary Capital 72 57 78 64 69 Total Capital 2,842 2,965 2,573 2,243 1,834 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Quick Assets 12,769 11,318 8,715 8,372 7,558 Total risk weighted assets 10,505 9,577 9,577 6,036 5,533 SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 84.81 82.59 82.18 81.53 83.26 1.22% 1.26% 0.74% 0.08% Shareholders’ funds/ Total assets 15.19 17.41 17.82 18.47 16.74 2013 2014 2015 2016 -0.79%2017 Total income/ Total assets 9.61 11.24 10.04 11.21 10.26 Net interest margin/ Total assets 5.01 6.35 5.92 5.94 6.12 Profitability (KSh Billions) Net advances/ Total assets 29.38 30.78 36.20 27.64 27.52 Total deposits/ Total assets 73.81 73.82 70.07 73.66 75.89 2017 2016 2015 Gov. securities & placement with other banks/Total assets 61.21 64.11 56.14 63.82 63.70 Gov. securities & cash and balances with CBK/Total deposits 67.30 65.75 57.91 65.21 64.94 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 198.48 201.48 145.50 212.13 211.34 Total advances/ Total deposits 41.13 42.64 52.67 38.48 37.40 Shareholders’ funds/ Total deposits 20.58 23.58 25.43 25.07 22.06 1.76% 1.82% 3.1 2.7 Average Cost of Funds (COF) 5.08 5.54 4.09 3.58 3.88 2.5 1.41% 2.3 Cost Income Ratio (CIR) 54.09 43.54 45.24 35.64 39.70 1.14% 1.27% 2.0 1.7 Gross Non-Performing Loans/ Total loans & advances 10.43 2.94 2.17 2.43 3.05 1.2 Loans Loss Provisions/ Operating income 7.45 5.49 6.09 4.92 8.39 0.1 0.5 1.0 1.1 Core capital/ Total deposit liabilities 20.06 23.13 24.66 24.35 21.13 Core capital/ Total risk weighted assets 26.37 30.36 26.05 36.10 31.91 PROFIT (0.6) BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total liabilities 80.48 80.45 73.44 84.53 82.45 Quick assets / Total deposit liabilities 92.47 90.02 86.14 93.56 90.45 234 BANKING SURVEY | 2018 BANKING SURVEY | 2018 235 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier III Directors Contacts Financial Snapshot First Community Bank 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Mr. Mohamedali Husain-Country manager P.O. Box 43157 - 00100, Nairobi Total Assets (Ksh in 'billions') 18.7 Total Assets 17,360 14,962 14,565 15,278 11,305 Telephone: +254-20-2226433, 2222786, Core Capital (Ksh in 'billions') 2.8 Total Liabilities 15,651 13,405 12,953 13,760 10,095 2226406/7,22188176 Profit Before Tax (Ksh in 'thousands') 0.4 First Community Bank is a commercial Net Assets (Shareholders' Funds) 1,709 1,557 1,612 1,518 1,210 bank in Kenya. It is the first bank to Fax: +254-20-2214636 Non Perfoming Loans/Total Loans 8.6 Customer Deposits 14,774 12,655 12,350 13,339 9,932 operate in Kenya according to Sharia Tier Ranking 2 Email: [email protected] Return on Assets (%) 2.2 Other Deposits 9 - 10 - - Overall Ranking 14 Website: www.hbl.com Core Capital/Total Deposit Liability (%) 14.4 Total Deposits 14,783 12,655 12,360 13,339 9,932 law. The bank was founded in 2007 by Return on Capital Employed (%) 20.1 Loans and advances to customers (net of provisions) 9,727 10,939 10,940 9,766 7,211 private Muslim investors in Kuwait, Kenya Total loans and advances to customers 10,995 11,926 11,531 9,990 7,330 and Tanzania. First community bank was Cash and balances with CBK 2,325 2,224 2,454 3,476 1,326 recognized with an award for commercial Kenya government securities - - - - - lending excellence. The award signified Placements with other banks 4,094 599 168 564 1,868 the affordable interest rates imposed on LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income the customers. FCB offers low interest Interest on loans and advances 996 1,265 1,205 937 909 rates therefore being affordable to all 1.71% 1.52% 2017 2016 2015 1.00% 1.24% 1.12% Interest on government securities - - - - - people. Interest on placements and bank balances 49 6 108 60 94 Other Interest Income - - - - - 0.9 0.9 The bank performance in 2017 was 2013 2014 2015 2016 2017 Total Interest Income 1,045 1,271 1,313 997 1,002 0.8 Net Interest Income 802 1,007 1,042 871 850 impressive. The bank recorded a profit Foreign exchange gain (loss) 97 49 (41) 86 38 of KSh 216 million from a loss of KSh 42 Fees and Commissions Income (net) 376 377 313 284 204 million in the previous year. Total assets Other operating Income 11 19 20 31 30 increased by 16% from KSh 14 billion in Total net operating income 1,286 1,451 1,334 1,272 1,122 NON PERFORMING LOANS / TOTAL LOANS 0.03 0.04 0.05 0.02 0.01 0.04 2016 to KSh 17 billion in 2017.Customer Total income 1,529 1,716 1,605 1,398 1,274 deposits also increased by 17% from KSh INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses ADVANCES INCOME Interest on deposits 175 195 271 126 152 12.7 billion in 2016 to KSh 14.7 billion 2.13% Interest on borrowed funds, deposits and placements from other banks - - - - - in 2017.Loans and advances declined Other interest expense 68 70 - - - by 11% from KSh10.9 billion in 2016 to 0.62% 0.50% 0.60% 0.44% Total interest expense 243 264 271 126 152 KSh9.7 billion in 2017.Interest on loans General administrative expenses 549 684 700 665 485 and advances declined by 21% to KSh 2013 2014 2015 2016 2017 Other operating expenses 333 531 406 437 385 996 million in 2017 from KSh 10.9 billion Total operating expenses 882 1,214 1,106 1,102 869 Balance Sheet (KSh Billion) Total expenditure 1,124 1,479 1,377 1,228 1,021 in 2016.Net interest income declined by Operating profits before provisions 404 237 228 170 252 205 from KSh 1.0 billion in 2016 to KSh 2017 2016 2015 Losses on loans and advances 188 279 218 104 42 CORE CAPITAL/TOTAL DEPOSIT LIABILITY 802 million in 2017.Total non-performing Profits Before Tax (after exceptional Items) 216 (42) 11 66 210 loans increased by 13% from KSh 3.4 DISCLOSURES (KSH IN MILLIONS) billion recorded in 2016 to KSh 3.9 billion Total provisions (Loan loss provision and interest in suspense) 1,268 987 591 224 119 in 2017. 10.5 Non-performing loans Net of provisions & suspended interest 3,130 2,866 2,185 1,294 423 9.5 9.4 4.97% 5.03% Total Non-performing loans (Net of interest in suspense) 3,967 3,495 2,566 1,471 504 4.31% 4.72% 4.09% 8.1 7.7 7.7 Realisable value of securities 2,156 2,866 2,185 1,294 423 5.9 5.8 5.9 Net NPL exposure 975 (0) - - - Total Insider Loans 1,076 1,162 1,186 799 427 2013 2014 2015 2016 2017 Core Capital 1,407 1,463 1,517 1,423 1,140 Supplementary Capital 613 506 - - - Total Capital 2,021 1,969 1,517 1,423 1,140 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Quick Assets 6,420 2,822 2,622 4,039 3,194 Total risk weighted assets 13,173 14,071 13,429 12,652 7,702 RETURN ON AVERAGE ASSETS SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 90.15 89.59 88.93 90.07 89.30 Shareholders' funds/ Total assets 9.85 10.41 11.07 9.93 10.70 1.13% Total income/ Total assets 8.81 11.47 11.02 9.15 11.27 0.93% 0.78% 0.81% 0.47% Profitability (KSh Billion) Net interest margin/ Total assets 4.62 6.73 7.15 5.70 7.52 Net advances/ Total assets 56.03 73.11 75.11 63.92 63.79 2013 2014 2015 2016 2017 2017 2016 2015 Total deposits/ Total assets 85.16 84.58 84.86 87.31 87.86 Gov. securities & placement with other banks/Total assets 23.58 4.00 1.16 3.69 16.52 Gov. securities & cash and balances with CBK/Total deposits 13.39 14.86 16.85 22.75 11.73 Gov. securities & cash and balances with CBK/Total advances - - - - - 1.3 Total advances/ Total deposits 74.37 94.23 93.29 74.90 73.80 RETURN ON AVERAGE ASSETS 1.2 Shareholders' funds/ Total deposits 11.56 12.31 13.04 11.38 12.18 1.0 Average Cost of Funds (COF) 1.15 1.48 2.10 0.95 1.53 0.9 0.8 Cost Income Ratio (CIR) 68.57 83.67 82.88 86.63 77.51 0.6 Gross Non-Performing Loans/ Total loans & advances 40.00 32.31 24.08 15.20 7.40 1.13% 0.5 0.5 0.5 0.93% 0.78% 0.81% 0.1 0.1 0.2 Loans Loss Provisions/ Operating income 65.03 43.36 28.53 13.92 7.20 0.47% Core capital/ Total deposit liabilities 9.52 11.56 12.27 10.67 11.48 PROFIT BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 10.68 10.40 11.30 11.25 14.80 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total liabilities 41.02 21.06 20.24 29.36 31.64 Quick assets / Total deposit liabilities 43.42 22.30 21.22 30.28 32.16 236 BANKING SURVEY | 2018 BANKING SURVEY | 2018 237 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier III Development Bank of Kenya 2017 2016 2015 2014 2013 Directors Contacts Financial Snapshot BALANCE SHEET (KSH IN MILLIONS) Strategic Focus P.O. Box 26219 - 00100, Nairobi Total Assets (Ksh in 'billions') 17.4 Mr. Fazal Mehmood Saib-CEO Total Assets 16,320 16,418 16,943 16,954 15,581 Telephone: +254-20-2843000-3, 0726-736833, Core Capital (Ksh in 'billions') 1.4 Total Liabilities 13,390 13,515 14,099 14,191 13,758 Development Bank of Kenya is a 0738-407521 Profit Before Tax (Ksh in 'thousands') 0.2 Net Assets (Shareholders' Funds) 2,930 2,903 2,844 2,764 1,822 medium sized bank founded in 1963 Fax: +254-20-344101 Non Perfoming Loans/Total Loans 36.1 Customer Deposits 6,249 5,789 9,665 8,465 8,419 as a non-banking financial institution Tier Ranking 7 Email: [email protected] Return on Assets (%) 1.2 Other Deposits 1,416 1,992 2,038 2,845 2,643 that promoted and developed Overall Ranking 31 Website: www.firstcommunitybank.co.ke Core Capital/Total Deposit Liability (%) 12.7 Total Deposits 7,665 7,781 11,703 11,309 11,062 Loans and advances to customers (net of provisions) 9,200 8,733 8,044 8,528 8,108 commercially viable projects in Kenya. Return on Capital Employed (%) 9.5 Total loans and advances to customers 10,710 10,082 9,094 9,332 8,767 The bank operates through offering Cash and balances with CBK 351 373 699 926 703 various financial services to people and Kenya government securities 4,713 5,018 5,020 5,564 4,532 businesses. LOAN LOSS PROVISION / OPERATING INCOME Placements with other banks 836 1,047 1,883 767 1,378 Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income The net profit greatly declined by 40% 2017 2016 2015 15.86% Interest on loans and advances 871 1,150 1,123 1,118 1,017 in 2017 to KSh 57 million compared to 10.58% Interest on government securities 551 570 640 625 544 6.96% KSh 95 million that was recorded in 2016. 3.40% Interest on placements and bank balances 46 30 45 15 29 1.76% Total assets slightly declined by 1% to 1.3 Other Interest Income - - - - - 2013 2014 2015 2016 2017 1.2 Total Interest Income 1,467 1,750 1,807 1,758 1,590 KSh 16.3 billion from KSh 16.4 billion 1.0 Net Interest Income 396 483 449 604 549 recorded in 2016.Customer deposits grew Foreign exchange gain (loss) 26 26 19 17 21 by 8% in 2017 to KSh 6.2 billion from Fees and Commissions Income (net) 27 36 36 33 39 KSh8.7 billion in 2016.Loans and advances NON PERFORMING LOANS / TOTAL LOANS Other operating Income 54 62 33 53 41 increased by 5% in 2017 to KSh 9.2 billion 0.4 0.4 0.3 0.05 0.01 0.11 Total net operating income 504 607 537 708 650 compared to KSh 8.7 billion in 2016. Total income 1,575 1,874 1,895 1,861 1,691 INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses Interest on loans and advances declined ADVANCES INCOME by 24% in 2017 to KSh 871 million 9.76% Interest on deposits 566 976 1,150 888 773 7.88% Interest on borrowed funds, deposits and placements from other banks 486 270 184 69 72 compared to KSh 1.1 billion recorded in 3.71% 5.87% 1.81% Other interest expense 19 21 25 197 196 2016.Net interest income was KSh 396 Total interest expense 1,071 1,267 1,358 1,153 1,041 million which is a 18% decline compared 2013 2014 2015 2016 2017 General administrative expenses 231 235 213 203 194 to KSh 483 million recorded in 2016. Total Other operating expenses 153 151 112 98 87 non-performing loans declined by 15% Total operating expenses 384 386 324 301 282 Balance Sheet (KSh Billions) Total expenditure 1,455 1,652 1,683 1,454 1,322 from KSh 2.2 billion recorded in 2016. CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions 120 221 213 407 368 2017 2016 2015 Losses on loans and advances 62 126 35 89 87 Profits Before Tax (after exceptional Items) 57 95 178 318 282 DISCLOSURES (KSH IN MILLIONS) 2.80% 2.99% 2.82% 2.60% 2.32% Total provisions (Loan loss provision and interest in suspense) 1,510 1,349 1,050 804 659 17.4 Non-performing loans Net of provisions & suspended interest 800 1,245 820 518 530 15.0 14.6 14.8 Total Non-performing loans (Net of interest in suspense) 1,930 2,272 1,631 1,140 1,008 12.7 12.3 Realisable value of securities 800 1,245 820 518 530 10.9 10.9 2013 2014 2015 2016 2017 9.7 Net NPL exposure - 0 - - (0) Total Insider Loans 1,023 1,140 831 737 726 Core Capital 1,617 1,738 1,745 1,745 1,553 Supplementary Capital 281 281 272 265 87 Total Capital 1,898 2,018 2,017 2,010 1,640 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Quick Assets 5,900 6,438 7,601 7,257 6,613 Total risk weighted assets 8,060 8,047 7,394 6,780 6,944 SELECTED PERFORMANCE RATIOS (IN %) 0.48% 0.33% Total liabilities/ Total assets 82.05 82.32 83.22 83.70 88.30 0.12% 0.02% -0.07% Shareholders' funds/ Total assets 17.95 17.68 16.78 16.30 11.70 2013 2014 2015 2016 2017 Total income/ Total assets 9.65 11.41 11.19 10.98 10.85 Profitability (KSh Billions) Net interest margin/ Total assets 2.43 2.94 2.65 3.56 3.52 Net advances/ Total assets 56.37 53.19 47.48 50.30 52.04 Total deposits/ Total assets 46.97 47.39 69.07 66.70 71.00 2017 2016 2015 Gov. securities & placement with other banks/Total assets 34.00 36.94 40.74 37.34 37.93 Gov. securities & cash and balances with CBK/Total deposits 31.03 32.83 33.75 38.28 33.60 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 44.00 49.76 55.20 59.62 51.69 Total advances/ Total deposits 139.72 129.58 77.71 82.52 79.26 Shareholders' funds/ Total deposits 38.22 37.31 24.30 24.44 16.47 1.5 0.50% 1.3 1.3 1.3 1.3 Average Cost of Funds (COF) 12.44 13.82 9.64 6.87 6.28 0.40% 0.36% 1.0 Cost Income Ratio (CIR) 76.27 63.57 60.38 42.50 43.32 0.26% 0.30% Gross Non-Performing Loans/ Total loans & advances 21.57 25.73 20.56 14.17 13.57 Loans Loss Provisions/ Operating income 224.51 169.13 151.03 87.86 73.55 0.2 0.0 0.2 0.3 0.3 Core capital/ Total deposit liabilities 21.10 22.33 14.91 15.43 14.04 PROFIT (0.0) BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 20.06 21.59 23.60 25.73 22.36 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total liabilities 44.06 47.63 53.91 51.14 48.06 Quick assets / Total deposit liabilities 76.96 82.74 64.95 64.17 59.78 238 BANKING SURVEY | 2018 BANKING SURVEY | 2018 239 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier III Guardian Bank 2017 2016 2015 2014 2013 Directors Contacts Financial Snapshot BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Victor Kidiwa-CEO P.O. Box 30483 - 00100, Nairobi Total Assets (Ksh in 'billions') 16.3 Total Assets 15,803 14,705 14,609 14,571 12,835 Telephone: +254-20-340401/2/3, 340416, Core Capital (Ksh in 'billions') 1.6 Total Liabilities 13,428 12,491 12,625 12,815 11,341 Guardian Bank started as Euro Finance 2251082,340198 Profit Before Tax (Ksh in 'thousands') 0.1 Net Assets (Shareholders' Funds) 2,375 2,215 1,984 1,755 1,494 Limited in 1992. Due to the evolving Fax: +254-20-2250399 Non Perfoming Loans/Total Loans 18.0 Customer Deposits 13,120 12,313 12,495 12,643 11,181 changes legislative regulations in Kenya, Tier Ranking 9 Email: [email protected] Return on Assets (%) 0.4 Other Deposits - - - - - Total Deposits 13,120 12,313 12,495 12,643 11,181 Euro Finance converted to Guardian Overall Ranking 35 Website: www.devbank.com Core Capital/Total Deposit Liability (%) 2.0 Loans and advances to customers (net of provisions) 9,617 8,975 9,242 9,627 8,604 Bank Limited in 1996. The bank operates Return on Capital Employed (%) 21.1 Total loans and advances to customers 10,303 9,604 9,925 10,295 9,222 as a subsidiary of Chandaria industries Cash and balances with CBK 1,236 1,532 1,520 1,582 800 limited. Guardian bank has nine (9) Kenya government securities 3,485 2,939 2,456 2,348 2,202 branches, four in Nairobi, two branches Placements with other banks 714 548 721 622 871 LOAN LOSS PROVISION / OPERATING INCOME in Mombasa and one each in Eldoret, Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income Kisumu and Nakuru. 2017 2016 2015 Interest on loans and advances 1,303 1,607 1,630 1,372 1,171 60.68% Interest on government securities 323 332 301 330 318 40.82% 45.71% The net profit for 2017 was KSh 227 19.88% 23.75% Interest on placements and bank balances 43 21 54 86 68 million which is the 25% decline Other Interest Income 9 15 10 6 5 compared to KSh 302 million that was 2013 2014 2015 2016 2017 1.2 1.1 Total Interest Income 1,678 1,976 1,996 1,794 1,562 Net Interest Income 817 970 947 856 734 posted in 2016.Total assets increased by 0.9 Foreign exchange gain (loss) 38 42 50 57 48 7% from KSh 14.7 billion in 2016 to KSh Fees and Commissions Income (net) 88 84 72 77 59 15.8 billion in 2017.Customer deposits NON PERFORMING LOANS / TOTAL LOANS Other operating Income 29 137 112 24 44 also increased by 7% to KSh 13.1 billion Total net operating income 972 1,233 1,180 1,014 885 0.03 0.04 0.04 0.05 0.03 0.04 in 2017 from KSh 12.3 billion in 2016. Total income 1,834 2,238 2,229 1,952 1,712 Loans and advances also increased by INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses 6.95% 5.56% 5.83% ADVANCES INCOME Interest on deposits 842 969 1,025 914 780 7% from KSh 8.9 billion in 2016 to KSh 3.67% 3.83% Interest on borrowed funds, deposits and placements from other banks 0 0 1 0 1 9.6 billion in 2017.Interest on loans and Other interest expense 20 36 23 23 47 advances declined by 19% to KSh1.3 Total interest expense 861 1,005 1,049 938 828 billion in 2017 from KSh 1.6 billion in 2013 2014 2015 2016 2017 General administrative expenses 482 456 424 371 322 2016.Net interest income declined by Other operating expenses 201 211 263 154 165 16% from KSh 970 million posted in 2016 Total operating expenses 683 666 687 525 487 Balance Sheet (KSh Billions) Total expenditure 1,544 1,672 1,736 1,463 1,315 to KSh 817 million recorded in 2017.Total CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions 289 567 493 489 398 non-performing asset increased by 64% 2017 2016 2015 Losses on loans and advances 62 265 164 111 14 from KSh 525 million in 2016 to KSh 861 Profits Before Tax (after exceptional Items) 227 302 329 378 383 million in 2017. DISCLOSURES (KSH IN MILLIONS) 6.04% 5.70% Total provisions (Loan loss provision and interest in suspense) 686 629 683 668 618 3.79% 4.17% 4.03% 16.3 16.4 16.9 Non-performing loans Net of provisions & suspended interest 435 157 346 119 113 Total Non-performing loans (Net of interest in suspense) 861 525 767 625 509 Realisable value of securities 435 192 361 119 113 Net NPL exposure - (35) (15) - - 2013 2014 2015 2016 2017 9.7 9.2 8.7 8.0 Total Insider Loans 132 323 358 351 329 6.2 5.8 Core Capital 2,307 2,149 1,984 1,729 1,494 Supplementary Capital 68 65 - 26 - Total Capital 2,375 2,215 1,984 1,755 1,494 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Quick Assets 5,435 5,019 4,696 4,551 3,872 Total risk weighted assets 11,746 11,288 11,255 10,600 8,312 SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 84.97 84.94 86.42 87.95 88.36 0.52% 0.53% 0.28% Shareholders' funds/ Total assets 15.03 15.06 13.58 12.05 11.64 0.15% 0.09% Total income/ Total assets 11.60 15.22 15.26 13.39 13.34 Profitability (KSh Billions) Net interest margin/ Total assets 5.17 6.60 6.48 5.88 5.72 2013 2014 2015 2016 2017 Net advances/ Total assets 60.86 61.03 63.26 66.07 67.04 2017 2016 2015 Total deposits/ Total assets 83.02 83.73 85.52 86.77 87.12 Gov. securities & placement with other banks/Total assets 26.57 23.71 21.74 20.38 23.94 Gov. securities & cash and balances with CBK/Total deposits 29.88 30.40 27.21 26.97 23.38 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 33.82 30.60 24.74 22.80 23.87 1.8 1.8 Total advances/ Total deposits 78.53 78.00 79.44 81.43 82.47 Shareholders' funds/ Total deposits 18.10 17.99 15.88 13.88 13.36 1.5 1.4 Average Cost of Funds (COF) 6.42 7.87 8.21 7.23 6.98 2.95% 3.26% 1.3 2.60% 1.1 Cost Income Ratio (CIR) 70.23 54.05 58.21 51.81 55.04 1.83% 1.89% Gross Non-Performing Loans/ Total loans & advances 10.89 8.19 10.37 7.64 7.92 0.6 Loans Loss Provisions/ Operating income 43.83 29.81 35.69 49.96 44.69 0.5 0.5 0.1 0.1 0.2 Core capital/ Total deposit liabilities 17.58 17.46 15.88 13.68 13.36 Core capital/ Total risk weighted assets 19.64 19.04 17.63 16.31 17.97 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Quick assets / Total liabilities 40.48 40.18 37.20 35.51 34.14 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Quick assets / Total deposit liabilities 41.43 40.76 37.59 36.00 34.63 240 BANKING SURVEY | 2018 BANKING SURVEY | 2018 241 INDIVIDUAL BANKS INDIVIDUAL BANKS Tier III - Aggregate Directors Contacts Financial Snapshot Aggregate Tier III 2017 2016 2015 2014 2013 Mr. Vasant K. Shetty P.O. Box 67681 - 00200, Nairobi Total Assets (Ksh in 'billions') 15.8 BALANCE SHEET (KSH IN MILLIONS) Telephone: +254-20-2226771, 2226774, 2226341, Core Capital (Ksh in 'billions') 2.3 Total Assets 197,226 201,842 191,639 181,261 152,528 222483 Profit Before Tax (Ksh in 'thousands') 0.2 Total Liabilities 162,122 164,473 157,824 152,315 128,449 Fax: +254-20-2216633 Non Perfoming Loans/Total Loans 8.4 Net Assets (Shareholders' Funds) 35,104 37,369 33,816 28,946 24,079 Customer Deposits 138,963 139,194 135,118 129,778 114,856 Tier Ranking 4 Email: [email protected] Return on Assets (%) 1.4 Other Deposits 6,249 7,959 7,817 8,063 4,317 Core Capital/Total Deposit Liability (%) 9.6 Overall Ranking 19 Website: www.guardian-bank.com Total Deposits 145,212 147,153 142,935 137,841 119,173 Return on Capital Employed (%) 17.6 Loans and advances to customers (net of provisions) 112,290 115,272 111,103 99,940 82,937 Total loans and advances to customers 119,165 121,168 115,937 103,470 85,928 Cash and balances with CBK 17,128 16,354 13,910 15,968 9,790 LOAN LOSS PROVISION / OPERATING INCOME Kenya government securities 34,186 40,832 39,844 39,906 29,543 Income & Expenses (KSh Billion) Placements with other banks 18,639 15,410 13,570 12,160 16,313 PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) 2017 2016 2015 Income 9.51% 10.63% 9.33% 7.59% 6.34% Interest on loans and advances 13,797 17,606 15,974 13,595 11,761 Interest on government securities 3,596 4,688 4,295 3,943 3,429 Interest on placements and bank balances 703 565 1,269 661 550 2013 2014 2015 2016 2017 Other Interest Income 39 67 154 158 191 1.6 1.6 Total Interest Income 18,135 22,925 21,692 18,357 15,932 1.3 Net Interest Income 9,656 12,366 11,750 10,462 9,140 Foreign exchange gain (loss) 694 535 461 588 519 NON PERFORMING LOANS / TOTAL LOANS Fees and Commissions Income (net) 2,514 2,389 2,583 2,048 1,752 Other operating Income 389 411 311 673 391 0.1 0.1 0.1 0.0 0.0 0.1 Total net operating income 13,253 15,709 15,104 13,771 11,802 2.32% Total income 21,732 26,268 25,047 21,666 18,594 2.21% 1.74% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS 1.69% 1.63% ADVANCES INCOME Expenses Interest on deposits 7,019 9,225 8,870 7,081 6,117 Interest on borrowed funds, deposits and placements from other banks 734 835 646 251 200 2013 2014 2015 2016 2017 Other interest expense 725 499 426 563 475 Total interest expense 8,479 10,558 9,943 7,895 6,792 General administrative expenses 6,316 6,768 6,198 5,459 4,572 Other operating expenses 3,216 3,584 3,145 2,707 2,593 CORE CAPITAL/TOTAL DEPOSIT LIABILITY Balance Sheet (KSh Billion) Total operating expenses 9,532 10,351 9,343 8,166 7,165 Total expenditure 18,011 20,910 19,285 16,061 13,956 3.38% 3.71% 3.74% 2017 2016 2015 Operating profits before provisions 3,721 5,358 5,761 5,606 4,637 2.84% 2.91% Losses on loans and advances 1,898 1,307 1,063 746 380 Profits Before Tax (after exceptional Items) 1,823 4,051 4,698 4,860 4,257 DISCLOSURES (KSH IN MILLIONS) Total provisions (Loan loss provision and interest in suspense) 6,876 5,895 4,834 3,530 2,991 15.8 2013 2014 2015 2016 2017 14.7 14.6 Non-performing loans Net of provisions & suspended interest 11,076 9,602 7,393 3,597 2,488 Total Non-performing loans (Net of interest in suspense) 15,456 13,257 10,541 6,084 4,290 13.1 12.3 12.5 Realisable value of securities 9,969 9,570 7,438 3,597 2,472 9.6 9.0 9.2 Net NPL exposure 1,107 32 (45) - 16 Total Insider Loans 5,270 6,352 5,505 4,395 3,546 RETURN ON AVERAGE ASSETS Core Capital 28,780 31,899 28,635 24,009 20,659 Supplementary Capital 2,323 1,949 1,961 1,932 673 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 31,103 33,848 30,597 25,941 21,332 0.66% Quick Assets 69,953 72,597 67,323 68,034 55,646 0.59% Total risk weighted assets 157,136 152,836 148,324 131,332 96,441 0.48% 0.44% SELECTED PERFORMANCE RATIOS (IN %) 0.32% Total liabilities/ Total assets 82.20 81.49 82.35 84.03 84.21 Shareholders' funds/ Total assets 17.80 18.51 17.65 15.97 15.79 Total income/ Total assets 11.02 13.01 13.07 11.95 12.19 Profitability (KSh Billion) Net interest margin/ Total assets 4.90 6.13 6.13 5.77 5.99 2013 2014 2015 2016 2017 Net advances/ Total assets 56.93 57.11 57.98 55.14 54.38 2017 2016 2015 Total deposits/ Total assets 73.63 72.91 74.59 76.05 78.13 Gov. securities & placement with other banks/Total assets 26.78 27.86 27.87 28.72 30.06 Gov. securities & cash and balances with CBK/Total deposits 26.02 28.33 28.05 30.83 25.79 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 28.69 33.70 34.37 38.57 34.38 Total advances/ Total deposits 82.06 82.34 81.11 75.07 72.10 2.0 2.0 Shareholders' funds/ Total deposits 24.17 25.39 23.66 21.00 20.20 1.7 1.74% Average Cost of Funds (COF) 5.10 6.56 6.32 5.05 5.03 1.54% 1.63% 1.66% 1.41% 1.2 1.2 Cost Income Ratio (CIR) 71.92 65.89 61.86 59.30 60.71 1.0 1.0 0.9 1.0 Gross Non-Performing Loans/ Total loans & advances 15.06 12.79 10.55 6.89 6.38 0.2 0.3 0.3 Loans Loss Provisions/ Operating income 33.05 23.26 20.84 18.06 15.27 Core capital/ Total deposit liabilities 19.82 21.68 20.03 17.42 17.34 PROFIT BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 18.32 20.87 19.31 18.28 21.42 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total liabilities 43.15 44.14 42.66 44.67 43.32 Quick assets / Total deposit liabilities 48.17 49.33 47.10 49.36 46.69 242 BANKING SURVEY | 2018 BANKING SURVEY | 2018 243 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier IV Credit Bank 2017 2016 2015 2014 2013 Strategic Focus BALANCE SHEET (KSH IN MILLIONS) LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) Total Assets 14,465 12,202 10,287 8,865 7,309 Total Liabilities 11,800 9,742 8,895 7,713 6,071 Credit Bank is a medium sized commercial Net Assets (Shareholders’ Funds) 2,665 2,460 1,392 1,152 1,238 2017 2016 2015 bank that commenced operations in Customer Deposits 10,940 9,135 7,267 7,213 5,512 33.05% 1986. The bank started by targeting 23.26% Other Deposits 545 315 1,494 328 422 15.27% 18.06% 20.84% Total Deposits 11,485 9,451 8,761 7,541 5,934 on large corporations and upscale Loans and advances to customers (net of provisions) 9,699 7,899 7,088 5,528 4,328 businesspeople until 2010 when it 17.6 Total loans and advances to customers 10,171 8,360 7,388 5,887 4,532 changed to a retail bank. Fountain 2013 2014 2015 2016 2017 16.0 Cash and balances with CBK 969 827 707 456 567 Enterprises Program me (FEP) paid 13.8 Kenya government securities 2,243 2,166 1,235 1,590 1,794 Sh107.1 million to acquire a five per cent Placements with other banks 638 437 574 670 139 stake in Credit Bank, the private lender PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) in which the family of former politician Income NON PERFORMING LOANS / TOTAL LOANS 2.5 2.4 2.6 0.7 0.6 1.3 Interest on loans and advances 1,252 1,383 1,066 898 734 Simeon Nyachae has a major stake. The Interest on government securities 253 168 121 130 132 bank performance in 2017 improved by INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Interest on placements and bank balances 24 19 24 16 31 13% to KSh 179 million compared to ADVANCES INCOME Other Interest Income 4 5 7 8 9 15.06% 12.79% Total Interest Income 1,533 1,574 1,218 1,052 906 10.55% KSh 158 million recorded in the previous 6.38% 6.89% Net Interest Income 793 803 618 549 520 Foreign exchange gain (loss) 58 36 26 19 13 year. Total assets grew by 19% from KSh Fees and Commissions Income (net) 413 275 167 109 100 12 billion in 2016 to KSh 14 billion in 2013 2014 2015 2016 2017 Other operating Income 89 121 4 9 18 2017.Customer deposits also increased Total net operating income 1,353 1,235 816 686 650 by 20% to KSh 10.9 billion in 2017 Total income 2,093 2,007 1,416 1,189 1,037 compared to KSh 9.1billion recorded in Expenses Interest on deposits 710 724 557 497 385 the previous year. Loans and advances in Balance Sheet (KSh Billions) Interest on borrowed funds, deposits and placements from other banks 31 47 43 6 2 2017 was KSh 9.7 billion which is a 23% CORE CAPITAL/TOTAL DEPOSIT LIABILITY Other interest expense - - - - - increase compared to KSh 7.9 billion 2017 2016 2015 Total interest expense 740 772 600 503 387 recorded in 2016.Interest on loans and General administrative expenses 723 657 561 487 379 advances declined by 9% from KSh 1.3 Other operating expenses 315 270 211 172 153 billion in 2016 to KSh 1.2 billion in 2017. Total operating expenses 1,038 927 772 659 533 Net interest income slightly declined by 20.03% 21.68% 19.82% Total expenditure 1,778 1,698 1,372 1,162 919 17.34% 17.42% Operating profits before provisions 315 308 44 27 118 1%from KSh 803 million in 2016 to KSh 197.2 201.8 191.6 Losses on loans and advances 136 150 223 118 45 793 in 2017. Total non-performing loans Profits Before Tax (after exceptional Items) 179 158 (179) (91) 73 139.0 139.2 135.1 DISCLOSURES (KSH IN MILLIONS) 115.3 greatly increased by 193% to KSh 731 2013 2014 2015 2016 2017 112.3 111.1 Total provisions (Loan loss provision and interest in suspense) 472 461 300 360 204 Non-performing loans Net of provisions & suspended interest 404 215 215 227 141 million in 2017 from KSh 249 million in Total Non-performing loans (Net of interest in suspense) 731 249 249 249 249 the previous year. Realisable value of securities 404 215 215 227 141 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Net NPL exposure - - - - - RETURN ON AVERAGE ASSETS Total Insider Loans 1,111 415 415 415 415 Core Capital 2,594 2,423 1,345 1,112 1,198 Supplementary Capital 50 44 58 53 58 Total Capital 2,644 2,468 1,403 1,165 1,256 3.05% 2.91% Quick Assets 3,850 3,430 2,516 2,716 2,500 2.52% 2.06% Total risk weighted assets 16,679 10,801 8,964 6,185 4,718 0.91% SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 81.58 79.84 86.47 87.01 83.06 2013 2014 2015 2016 2017 Shareholders’ funds/ Total assets 18.42 20.16 13.53 12.99 16.94 Profitability (KSh Billions) Total income/ Total assets 14.47 16.44 13.76 13.42 14.19 Net interest margin/ Total assets 5.48 6.58 6.01 6.19 7.11 2017 2016 2015 Net advances/ Total assets 67.05 64.74 68.90 62.36 59.21 Total deposits/ Total assets 79.40 77.45 85.17 85.07 81.19 Gov. securities & placement with other banks/Total assets 19.91 21.34 17.59 25.50 26.45 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total deposits 22.21 24.53 18.87 23.08 32.31 22.9 Gov. securities & cash and balances with CBK/Total advances 22.05 25.91 16.72 27.01 39.58 21.7 Total advances/ Total deposits 88.56 88.46 84.32 78.06 76.37 18.1 Shareholders’ funds/ Total deposits 23.21 26.02 15.89 15.27 20.86 15.7 15.1 Average Cost of Funds (COF) 6.44 8.17 6.84 6.67 6.52 13.3 6.43% 6.62% Cost Income Ratio (CIR) 76.71 75.03 94.58 96.07 81.90 5.42% 5.41% 5.08% 10.6 9.9 8.5 Gross Non-Performing Loans/ Total loans & advances 8.62 8.08 6.97 9.96 7.61 1.8 4.1 4.7 Loans Loss Provisions/ Operating income 24.12 28.77 29.13 33.34 16.70 Core capital/ Total deposit liabilities 22.59 25.64 15.36 14.74 20.19 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 15.55 22.44 15.01 17.97 25.39 INCOME EXPENSES INCOME Quick assets / Total liabilities 32.62 35.21 28.28 35.22 41.18 2013 2014 2015 2016 2017 Quick assets / Total deposit liabilities 33.52 36.30 28.71 36.02 42.13 244 BANKING SURVEY | 2018 BANKING SURVEY | 2018 245 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier IV Directors Contacts Financial Snapshot Consolidated Bank 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Ms. Betty C. Maritim Korir-CEO P.O. Box 61064 - 00200, Nairobi Total Assets (Ksh in 'billions') 14.5 Total Assets 13,456 13,918 14,136 15,077 16,779 Telephone: +254-20-2222300/2220789, 2222317, Core Capital (Ksh in 'billions') 2.6 Total Liabilities 12,387 12,515 12,520 13,509 15,537 0728607701 Profit Before Tax (Ksh in 'thousands') 0.2 Consolidated Bank of Kenya Limited was Net Assets (Shareholders' Funds) 1,068 1,403 1,616 1,568 1,242 incorporated on 7th December, 1989. This Fax: +254-20-2216700 Non Perfoming Loans/Total Loans 7.2 Customer Deposits 8,646 9,492 9,997 10,642 11,711 was in an effort to stabilize the financial Tier Ranking 5 Email: [email protected] Return on Assets (%) 1.2 Other Deposits 209 91 275 534 1,266 Overall Ranking 25 Website: www.creditbank.com Core Capital/Total Deposit Liability (%) 6.7 Total Deposits 8,855 9,583 10,272 11,175 12,977 sector through the acquisition of nine Return on Capital Employed (%) 22.6 Loans and advances to customers (net of provisions) 8,421 9,161 9,221 9,213 10,855 insolvent institutions and thereafter Total loans and advances to customers 9,882 10,317 10,155 10,766 11,838 restructuring them into a viable, Cash and balances with CBK 858 653 760 1,406 934 professionally run commercial bank. The Kenya government securities 2,606 2,663 2,688 2,824 3,056 bank is fully owned by the Government Placements with other banks 107 54 105 162 136 LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) with the majority shareholding in PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) the bank (78%) held by The National 2017 2016 2015 Income Interest on loans and advances 1,115 1,444 1,729 1,809 1,941 Treasury. The remaining shareholding 6.29% 5.50% 5.43% 3.15% 4.55% Interest on government securities 219 226 222 233 273 is spread over twenty-five (25) Interest on placements and bank balances 10 2 6 13 123 parastatals and other quasi government 1.4 Other Interest Income - - - - - 1.3 organizations. 2013 2014 2015 2016 2017 Total Interest Income 1,345 1,672 1,957 2,054 2,336 1.1 Net Interest Income 498 686 1,019 944 1,075 Foreign exchange gain (loss) 28 31 37 44 53 The bank reported a loss of KSh 438 Fees and Commissions Income (net) 324 270 317 322 369 million in 2017 this is a 58% increase NON PERFORMING LOANS / TOTAL LOANS 0.4 Other operating Income 426 451 642 102 23 compared to a to a loss of KSh 277 0.3 0.2 0.02 0.02 0.02 Total net operating income 1,276 1,438 2,014 1,412 1,519 million recorded in 2016.Total assets Total income 2,122 2,423 2,953 2,522 2,780 1.88% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS 1.63% Expenses declined by 3% from KSh 13.9 billion in 1.44% 1.53% ADVANCES INCOME 1.31% Interest on deposits 513 625 635 860 922 2016 to KSh 13.5 billion in 2017.Customer Interest on borrowed funds, deposits and placements from other banks 333 360 304 250 50 deposits declined by 9% in 2017 to KSh Other interest expense - - - - 289 8.6 billion compared to KSh 9.5 billion Total interest expense 846 986 939 1,110 1,261 recorded in 2016.Loans and advances 2013 2014 2015 2016 2017 General administrative expenses 963 999 965 858 1,673 declined by 8% from KSh 9.2 billion in Other operating expenses 356 407 412 350 418 2016 to KSh 8.4 billion in 2017.Interest Balance Sheet (KSh Billions) Total operating expenses 1,319 1,406 1,378 1,208 2,091 Total expenditure 2,166 2,391 2,316 2,318 3,352 on loans and advances declined by 23% CORE CAPITAL/TOTAL DEPOSIT LIABILITY 2017 2016 2015 Operating profits before provisions (43) 32 637 204 (572) from KSh 1.4 billion in 2016 to KSh Losses on loans and advances 395 309 589 448 407 1.1 billion in 2017.Net interest income Profits Before Tax (after exceptional Items) (438) (277) 48 (243) (978) declined by 27% to KSh 498 million in DISCLOSURES (KSH IN MILLIONS) 2017 compared KSh 686 million recorded Total provisions (Loan loss provision and interest in suspense) 1,461 1,156 934 1,554 983 4.84% in 2016.Total non-performing loan 3.81% 4.26% Non-performing loans Net of provisions & suspended interest 1,021 882 1,023 1,257 678 2.78% 2.90% 14.5 Total Non-performing loans (Net of interest in suspense) 1,720 1,478 1,558 2,331 1,382 increased by 16% from KSh 1.5 billion in 12.2 Realisable value of securities 1,021 882 1,023 1,257 678 2016 to KSh 1.7 billion in 2017. 10.3 10.9 9.1 9.7 Net NPL exposure - - - - - 2013 2014 2015 2016 2017 7.9 7.3 7.1 Total Insider Loans 538 639 610 602 661 Core Capital 354 746 1,086 1,088 843 Supplementary Capital 241 255 226 356 374 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 595 1,001 1,312 1,444 1,217 Quick Assets 3,571 3,370 3,552 4,392 4,126 Total risk weighted assets 11,686 12,669 13,974 13,155 11,254 SELECTED PERFORMANCE RATIOS (IN %) 0.20% 0.26% 0.25% Total liabilities/ Total assets 92.06 89.92 88.57 89.60 92.60 -0.21% Shareholders' funds/ Total assets 7.94 10.08 11.43 10.40 7.40 -0.35% 2013 2014 2015 2016 2017 Total income/ Total assets 15.77 17.41 20.89 16.73 16.57 Profitability (KSh Billions) Net interest margin/ Total assets 3.70 4.93 7.21 6.26 6.41 Net advances/ Total assets 62.58 65.83 65.23 61.10 64.70 2017 2016 2015 Total deposits/ Total assets 65.81 68.85 72.67 74.12 77.34 Gov. securities & placement with other banks/Total assets 20.16 19.52 19.76 19.80 19.02 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total deposits 25.74 23.83 24.39 28.05 23.78 Gov. securities & cash and balances with CBK/Total advances 26.37 25.82 26.47 26.23 25.81 Total advances/ Total deposits 111.60 107.66 98.87 96.34 91.23 1.5 1.6 Shareholders' funds/ Total deposits 12.07 14.64 15.73 14.03 9.57 1.60% 1.4 1.41% 1.39% 1.2 1.2 Average Cost of Funds (COF) 7.94 8.59 7.67 8.39 6.45 1.32% 1.33% Cost Income Ratio (CIR) 103.40 97.77 68.39 85.53 137.63 0.7 0.8 0.8 Gross Non-Performing Loans/ Total loans & advances 25.11 19.75 19.27 26.10 14.03 0.6 0.2 0.2 Loans Loss Provisions/ Operating income 54.82 41.49 26.57 76.07 46.37 Core capital/ Total deposit liabilities 4.00 7.78 10.57 9.74 6.50 PROFIT BEFORE (0.2) TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 3.03 5.89 7.77 8.27 7.49 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Quick assets / Total liabilities 28.83 26.93 28.37 32.51 26.56 Quick assets / Total deposit liabilities 40.33 35.17 34.58 39.30 31.80 246 BANKING SURVEY | 2018 BANKING SURVEY | 2018 247 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier IV Contacts Financial Snapshot Jamii Bora Bank 2017 2016 2015 2014 2013 Directors Strategic Focus Thomas Kipkemei Kiyai-CEO P.O. Box 51133 - 00200, Nairobi Total Assets (Ksh in 'billions') 13.5 BALANCE SHEET (KSH IN MILLIONS) Telephone: +254-20-340208/340836 Core Capital (Ksh in 'billions') 0.4 Total Assets 12,851 15,724 16,782 13,118 7,010 Total Liabilities 9,396 12,134 13,619 10,012 4,760 Fax: +254-20-340213 Profit Before Tax (Ksh in 'thousands') -0.4 Jamii bora is a private owned financial Net Assets (Shareholders' Funds) 3,454 3,590 3,163 3,106 2,251 Email: [email protected] Non Perfoming Loans/Total Loans 0.0 institution that was founded in 1999. Tier Ranking 12 Customer Deposits 5,383 8,095 10,946 8,465 3,421 Website: www.consolidated-bank.com Return on Assets (%) -3.3 The Bank works by offering the normal Overall Ranking 40 Other Deposits 229 152 690 270 111 Core Capital/Total Deposit Liability (%) -41.0 Total Deposits 5,612 8,247 11,636 8,734 3,532 financial activities to the customers Return on Capital Employed (%) 4.0 Loans and advances to customers (net of provisions) 8,311 9,356 10,156 6,190 3,809 while focusing on SME lender. Jamii Bora Total loans and advances to customers 9,929 10,497 10,767 6,465 3,931 Bank received KES 600 million capital Cash and balances with CBK 171 691 1,086 575 239 boosts from Chicago-based private Kenya government securities 858 1,066 1,014 879 329 LOAN LOSS PROVISION / OPERATING INCOME equity fund Equator Capital Partners LLC. Income & Expenses (KSh Billions) Placements with other banks 268 992 1,086 2,801 1,096 The company works to assist the SMEs PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) 17.69% 2017 2016 2015 Income globally for a better future. 12.75% 10.78% 9.65% Interest on loans and advances 1,215 1,911 1,545 859 465 6.18% Interest on government securities 97 113 124 70 35 The bank posted a loss of KSh 762 Interest on placements and bank balances 69 139 214 113 37 million in 2017 this was a 55% decline 2013 2014 2015 2016 2017 1.7 Other Interest Income - - - - - 1.4 Total Interest Income 1,380 2,162 1,884 1,041 536 in performance from a loss of KSh 491 million that was recorded in 2016.Total 1.1 Net Interest Income 245 721 733 583 388 Foreign exchange gain (loss) 9 1 18 33 9 assets declined by 18% from KSh 15.7 NON PERFORMING LOANS / TOTAL LOANS Fees and Commissions Income (net) 261 228 336 197 178 billion in 2016 to KSh 12.9 billion in 2017. 0.3 0.3 0.3 0.01 0.00 0.01 Other operating Income (31) 329 50 132 16 Customer deposit in 2017 was KSh 5.4 Total net operating income 485 1,279 1,136 945 591 billion this is a 34% decline compared INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Total income 1,620 2,720 2,287 1,403 739 to KSh 8.1 billion recorded in 2016. 6.07% 5.84% ADVANCES INCOME Expenses 4.48% 4.59% 3.26% Interest on deposits 665 1,127 1,151 449 142 Loans and advances declined by 11% Interest on borrowed funds, deposits and placements from other banks 106 106 - 9 6 from KSh 9.4 billion in 2016 to KSh 8.3 Other interest expense 364 208 - - - billion in 2017.Interest on loans and 2013 2014 2015 2016 2017 Total interest expense 1,135 1,441 1,151 458 148 advances declined by 36% from KSh1.9 General administrative expenses 641 686 748 403 274 billion in 2016 to KSh 1.2 billion in 2017. Other operating expenses 378 771 214 325 194 Net interest income declined by 66% Balance Sheet (KSh Billions) Total operating expenses 1,019 1,456 962 728 469 CORE CAPITAL/TOTAL DEPOSIT LIABILITY Total expenditure 2,153 2,897 2,113 1,186 617 from KSh 721 million in 2016 to KSh 245 2017 2016 2015 Operating profits before provisions (534) (177) 174 217 122 million in 2017. Total non-performing Losses on loans and advances 228 314 138 121 32 loans declined by 31% from KSh 1.6 Profits Before Tax (after exceptional Items) (762) (491) 36 96 90 billion in 2016 to KSh 1.1 billion in 2017. DISCLOSURES (KSH IN MILLIONS) 2.46% 14.1 2.26% 13.5 13.9 1.51% 1.81% Total provisions (Loan loss provision and interest in suspense) 1,618 1,141 611 275 122 0.93% Non-performing loans Net of provisions & suspended interest 488 1,000 167 328 67 10.0 Total Non-performing loans (Net of interest in suspense) 1,106 1,609 525 513 145 9.5 9.2 9.2 8.6 8.4 Realisable value of securities 293 913 167 328 67 2013 2014 2015 2016 2017 Net NPL exposure 196 88 - - - Total Insider Loans 425 585 664 615 465 Core Capital 2,283 2,686 2,186 2,197 1,396 Supplementary Capital 67 103 114 77 51 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 2,349 2,789 2,300 2,273 1,447 Quick Assets 1,297 2,749 3,186 4,255 1,664 Total risk weighted assets 12,156 13,888 14,150 8,709 1,600 SELECTED PERFORMANCE RATIOS (IN %) -0.36% 0.08% Total liabilities/ Total assets 73.12 77.17 81.15 76.32 67.89 -0.46% Shareholders' funds/ Total assets 26.88 22.83 18.85 23.68 32.11 -1.31%2013 2014 2015 2016 -0.74%2017 Total income/ Total assets 12.60 17.30 13.63 10.69 10.54 Profitability (KSh Billions) Net interest margin/ Total assets 1.91 4.59 4.37 4.45 5.54 Net advances/ Total assets 64.67 59.50 60.52 47.19 54.33 2017 2016 2015 Total deposits/ Total assets 43.67 52.45 69.34 66.58 50.38 Gov. securities & placement with other banks/Total assets 8.76 13.08 12.52 28.06 20.33 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total deposits 8.01 11.17 12.52 11.08 8.10 Gov. securities & cash and balances with CBK/Total advances 8.64 10.15 9.42 13.59 8.37 Total advances/ Total deposits 176.93 127.28 92.53 74.02 111.31 2.0 2.0 1.7 Shareholders' funds/ Total deposits 61.56 43.53 27.18 35.56 63.73 1.3 1.4 Average Cost of Funds (COF) 10.28 11.83 8.66 4.70 4.05 1.82% 1.93% 1.3 1.71% 1.78% 1.0 Cost Income Ratio (CIR) 210.04 113.83 84.65 77.04 79.35 1.59% 0.8 0.9 0.0 Gross Non-Performing Loans/ Total loans & advances 21.21 20.40 7.23 9.33 4.80 Loans Loss Provisions/ Operating income 127.43 47.57 31.55 19.64 13.25 (0.4) PBT (0.3) TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Core capital/ Total deposit liabilities 40.67 32.57 18.79 25.15 39.52 EXPENSES INCOME Core capital/ Total risk weighted assets 18.78 19.34 15.45 25.22 87.23 2013 2014 2015 2016 2017 Quick assets / Total liabilities 13.80 22.65 23.40 42.50 34.96 Quick assets / Total deposit liabilities 23.11 33.33 27.39 48.71 47.12 248 BANKING SURVEY | 2018 BANKING SURVEY | 2018 249 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier IV SBM Bank Kenya 2017 2016 2015 2014 2013 Directors Contacts Financial Snapshot BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Samuel Kimani-MD & CEO P.O. Box 22741 - 00400, Nairobi Total Assets (Ksh in 'billions') 12.9 Total Assets 11,745 9,903 15,025 16,515 12,779 Telephone: +254-20-2224238/9, 2214976, Core Capital (Ksh in 'billions') 2.3 Total Liabilities 10,138 10,645 13,281 14,800 11,368 SBM Holdings, a Mauritius lender 2219626, 2210338/9 Profit Before Tax (Ksh in 'thousands') -0.8 Net Assets (Shareholders' Funds) 1,607 (742) 1,745 1,716 1,411 announced its agreement to acquire the Fax: +254-20-341825/2245223/2214534 Non Perfoming Loans/Total Loans 11.1 Customer Deposits 2,893 5,134 10,403 13,559 11,263 majority stake in Fidelity Bank of Kenya Tier Ranking 10 Email: [email protected] Return on Assets (%) -5.9 Other Deposits 413 32 643 958 43 Total Deposits 3,306 5,166 11,046 14,517 11,306 in November 2016. The process was Overall Ranking 37 Website: www.jamiiborabank.co.ke Core Capital/Total Deposit Liability (%) -22.0 Loans and advances to customers (net of provisions) 4,405 4,876 9,625 10,155 7,259 concluded in May 2017 and the bank’s Return on Capital Employed (%) 40.7 Total loans and advances to customers 6,679 7,112 10,037 10,467 7,567 name was changed from Fidelity Bank of Cash and balances with CBK 1,011 298 249 1,432 1,172 Kenya to SBM Bank (Kenya) Limited. Kenya government securities 2,883 2,828 3,062 2,814 2,408 LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billion) Placements with other banks 822 11 508 814 126 PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income 2017 2016 2015 Interest on loans and advances 374 1,416 1,772 1,604 1,363 9.91% The bank posted a net profit of KSh 6.57% 6.57% Interest on government securities 245 248 229 218 170 2.76% 4.09% Interest on placements and bank balances 19 3 2 4 22 361 Million in 2017 which was an 84% Other Interest Income - - - 10 - decline compared to KSh 2.2 billion that 2013 2014 2015 2016 2017 Total Interest Income 637 1,666 2,003 1,836 1,555 was recorded in 2016. Total assets grew 1.9 Net Interest Income 161 570 645 606 556 by 19% from KSh 9.9 billion recorded 1.5 Foreign exchange gain (loss) 8 22 55 47 63 in 2016 to KSh 11.7 billion recorded in 1.2 Fees and Commissions Income (net) 45 61 102 115 111 2017. Customer deposits declined by NON PERFORMING LOANS / TOTAL LOANS Other operating Income 150 34 107 202 205 0.3 0.2 0.3 0.1 0.1 0.2 Total net operating income 363 687 908 971 935 43% from KSh 5.1 billion in 2016 to KSh Total income 840 1,783 2,266 2,201 1,934 2.9 billion in 2017. Loans and advances 4.25% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses were KSh 6.7 billion in 2017 which was a ADVANCES INCOME Interest on deposits 375 820 1,253 1,213 997 6% decline compared to KSh 7.1 billion 1.94% 1.00% 1.51% 1.51% Interest on borrowed funds, deposits and placements from other banks 102 276 106 17 2 recorded in 2016. Interest on loans and Other interest expense - - - - - advances declined by 73% from KSh Total interest expense 477 1,096 1,358 1,229 999 1.4 billion recorded in 2016 compared 2013 2014 2015 2016 2017 General administrative expenses 401 451 425 363 336 Other operating expenses 270 919 375 259 227 to KSh 374 million in 2017. Net interest Balance Sheet (KSh Billion) Total operating expenses 671 1,370 800 622 563 income was KSh 161 million in 2017 a Total expenditure 1,148 2,466 2,158 1,852 1,562 71% decline compared to KSh 570 million CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions (308) (683) 108 349 372 2017 2016 2015 recorded in 2016. Total non-performing Losses on loans and advances 53 1,585 112 52 56 loans declined by 25% to KSh 3.2 billion Profits Before Tax (after exceptional Items) (361) (2,268) (4) 297 316 in 2017 compared to KSh 4.3 billion 8.23% DISCLOSURES (KSH IN MILLIONS) 6.79% recorded in 2016. 5.24% Total provisions (Loan loss provision and interest in suspense) 2,275 2,235 412 312 308 16.8 Non-performing loans Net of provisions & suspended interest 1,642 2,375 1,193 499 506 3.91% 3.91% 15.7 Total Non-performing loans (Net of interest in suspense) 3,207 4,307 1,423 627 590 12.9 Realisable value of securities 1,642 2,375 1,193 499 506 10.9 2013 2014 2015 2016 2017 9.4 10.2 Net NPL exposure - - - - - 8.1 8.3 Total Insider Loans 51 57 293 292 212 5.4 Core Capital 1,020 (911) 1,389 1,551 1,309 Supplementary Capital 21 124 311 126 93 Total Capital 1,041 (787) 1,700 1,678 1,402 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES RETURN ON AVERAGE ASSETS Quick Assets 4,716 3,137 3,818 5,060 3,705 Total risk weighted assets 6,331 6,142 10,276 10,230 7,574 SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 86.32 107.49 88.39 89.61 88.96 0.36% 0.20% 0.05% 0.05% Shareholders' funds/ Total assets 13.68 (7.49) 11.61 10.39 11.04 -0.63% 2013 2014 2015 2016 2017 Total income/ Total assets 7.15 18.00 15.08 13.32 15.13 Profitability (KSh Billion) Net interest margin/ Total assets 1.37 5.75 4.29 3.67 4.35 Net advances/ Total assets 37.50 49.24 64.06 61.49 56.80 Total deposits/ Total assets 28.14 52.17 73.51 87.90 88.48 2017 2016 2015 Gov. securities & placement with other banks/Total assets 31.55 28.67 23.76 21.97 19.83 Gov. securities & cash and balances with CBK/Total deposits 33.15 31.57 22.04 25.71 28.01 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 43.16 39.77 30.51 26.89 31.82 2.2 Total advances/ Total deposits 202.06 137.65 90.87 72.10 66.93 1.9 Shareholders' funds/ Total deposits 48.62 (14.36) 15.79 11.82 12.48 Average Cost of Funds (COF) 14.42 21.22 12.30 8.47 8.83 1.4 2.08% 2.17% 2.08% 1.4 1.3 1.1 1.2 1.1 Cost Income Ratio (CIR) 184.77 199.53 88.09 64.06 60.22 1.24% 1.42% Gross Non-Performing Loans/ Total loans & advances 58.64 64.83 15.99 7.74 10.76 0.0 0.5 Loans Loss Provisions/ Operating income 431.04 281.38 25.36 13.22 9.02 Core capital/ Total deposit liabilities 30.85 (17.63) 12.58 10.69 11.58 PROFIT (0.5) BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING (0.8) Core capital/ Total risk weighted assets 16.11 (14.83) 13.52 15.16 17.28 EXPENSES INCOME 2013 2014 2015 2016 2017 Quick assets / Total liabilities 46.52 29.47 28.75 34.19 32.60 Quick assets / Total deposit liabilities 142.67 60.72 34.57 34.85 32.77 250 BANKING SURVEY | 2018 BANKING SURVEY | 2018 251 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier IV Spire Bank 2017 2016 2015 2014 2013 Directors Contacts Financial Snapshot Strategic Focus Location: 7th Floor,IPS Building,Kimathi Street BALANCE SHEET (KSH IN MILLIONS) Jotham Mutoka - Acting CEO Total Assets (Ksh in 'billions') 11.7 Total Assets 11,148 13,802 14,470 16,589 15,562 Address: P.O Box 34886-00100 Nairobi, kenya Core Capital (Ksh in 'billions') 1.0 Total Liabilities 9,960 11,985 12,401 15,434 14,191 Region of operation: Nairobi Town, Kenya Profit Before Tax (Ksh in 'thousands') -0.4 Spire Bank formerly known as Equatorial Tel: (254) (20) 2242348 / 2248842 / 2244187 Net Assets (Shareholders' Funds) 1,188 1,817 2,069 1,155 1,371 Non Perfoming Loans/Total Loans 48.0 Commercial Bank (ECB) was founded Tier Ranking 9 Customer Deposits 6,816 8,543 10,378 14,306 13,856 Email: [email protected] in 1983. It is a medium-sized financial Return on Assets (%) -3.1 Other Deposits 5 - 355 544 - Overall Ranking 36 Web: https://globalpresence.sbmgroup.mu/sbm-bank-kenya Core Capital/Total Deposit Liability (%) -22.5 Total Deposits 6,822 8,543 10,733 14,850 13,856 institution that serves corporate clients, Return on Capital Employed (%) 14.9 Loans and advances to customers (net of provisions) 5,239 7,434 8,322 10,068 9,029 small and medium enterprises, and Total loans and advances to customers 6,866 8,319 10,400 11,555 9,561 individuals. Spire Bank was rebranded Cash and balances with CBK 340 983 788 994 826 in 2016 under the new management Kenya government securities 2,831 2,881 3,242 3,183 2,759 of Timothy Gitonga, with the aim Placements with other banks 129 308 180 293 1,185 LOAN LOSS PROVISION / OPERATING INCOME of offering better services to their Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income customers. The bank rebranded after 2017 2016 2015 Interest on loans and advances 846 1,185 1,373 1,808 1,499 merging with Africa’s largest Savings 110.52% 72.15% Interest on government securities 224 248 285 234 203 and Credit Cooperative organization, 2.31% 3.39% 6.50% Interest on placements and bank balances 1 1 31 25 15 Mwalimu Sacco. 1.8 Other Interest Income 0 5 23 16 29 2013 2014 2015 2016 2017 Total Interest Income 1,071 1,439 1,711 2,083 1,745 1.4 Net Interest Income 284 474 612 919 829 Spire bank had a difficult year in 2017 as Foreign exchange gain (loss) 13 49 59 69 46 indicated by financial result, The bank Fees and Commissions Income (net) 168 201 189 218 176 recorded a loss of KSh 1.5 billion in 2017 0.4 0.0 0.1 0.1 0.02 0.00 0.00 Other operating Income 84 118 (65) 188 7 which is a 63% decline compared to a loss NON PERFORMING LOANS / TOTAL LOANS Total net operating income 550 842 795 1,394 1,057 of KSh 0.97 billion which was recorded in INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Total income 1,337 1,807 1,894 2,558 1,974 Expenses 2016. Total assets declined by 19% from 16.62% 15.04% ADVANCES INCOME Interest on deposits 460 693 1,019 1,125 877 KSh 13,8 billion that was recorded inn Interest on borrowed funds, deposits and placements from other banks 236 210 49 20 16 2016 to KSh 11.1 billion recorded in 2017. 4.10% 2.76% 1.99% Other interest expense 91 62 31 20 24 Customer deposits also declined by20% Total interest expense 787 965 1,099 1,164 917 in 2017 to KSh 6.8 billon compared to 2013 2014 2015 2016 2017 General administrative expenses 673 725 716 634 562 KSh 8.5 billion recorded in 2016.Loans Balance Sheet (KSh Billions) Other operating expenses 692 418 376 341 278 and advances also reduced by 30 % Total operating expenses 1,365 1,143 1,091 974 840 from KSh7.4 billion in 2016 to KSh 5.2 2017 2016 2015 Total expenditure 2,152 2,108 2,190 2,139 1,756 billion in 2017.There was a 29% decline CORE CAPITAL/TOTAL DEPOSIT LIABILITY Operating profits before provisions (815) (301) (296) 420 218 Losses on loans and advances 761 667 359 881 87 on net interest income from KSh 1.2 Profits Before Tax (after exceptional Items) (1,576) (968) (655) (461) 131 billion in 2016 to KSh0.8 billion recorded DISCLOSURES (KSH IN MILLIONS) 7.91% in 2017.Net interest income declined 15.0 Total provisions (Loan loss provision and interest in suspense) 1,628 886 2,079 1,487 532 3.22% by 40% from KSh 474 million recorded 2.97% 2.74% Non-performing loans Net of provisions & suspended interest 721 436 1,309 1,541 839 11.7 in 2016 compared to KSh284 million in 9.9 10.4 9.6 Total Non-performing loans (Net of interest in suspense) 2,237 1,246 2,772 2,525 1,076 2013 2014 2015 -4.52%2016 2017 Realisable value of securities 631 436 1,309 1,541 501 2017. Total non-performing loan greatly 5.1 Net NPL exposure 90 - - - 338 increased by 79% to KSh 2.2 billion 2.9 4.4 4.9 Total Insider Loans 175 225 328 571 349 in 2017 compared to KSh 1.2 billion Core Capital 987 1,569 1,628 934 1,216 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES recorded in 2016. Supplementary Capital 219 326 406 508 270 Total Capital 1,206 1,895 2,033 1,442 1,485 RETURN ON AVERAGE ASSETS Quick Assets 3,300 4,172 4,210 4,471 4,770 Total risk weighted assets 9,537 11,646 11,649 13,457 12,124 SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 89.35 86.83 85.70 93.04 91.19 0.66% 0.52% -0.01% Shareholders' funds/ Total assets 10.65 13.17 14.30 6.96 8.81 -0.85% Total income/ Total assets 11.99 13.09 13.09 15.42 12.68 -4.67% Balance Sheet (KSh Billions) 2013 2014 2015 2016 2017 Net interest margin/ Total assets 2.55 3.43 4.23 5.54 5.32 2017 2016 2015 2017 2016 2015 Net advances/ Total assets 46.99 53.86 57.51 60.69 58.02 Total deposits/ Total assets 61.19 61.89 74.17 89.51 89.04 Gov. securities & placement with other banks/Total assets 26.55 23.11 23.65 20.96 25.34 Gov. securities & cash and balances with CBK/Total deposits 28.44 28.00 27.85 25.18 23.04 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 41.23 34.63 31.17 27.55 28.86 15.0 Total advances/ Total deposits 100.66 97.38 96.90 77.81 69.00 Shareholders' funds/ Total deposits 17.41 21.27 19.27 7.78 9.90 3.47% 11.7 9.9 10.4 Average Cost of Funds (COF) 9.63 9.56 9.59 7.50 6.35 2.72% 2.89% 9.6 2.35% 2.44% Cost Income Ratio (CIR) 248.19 135.74 137.25 69.89 79.42 0.6 1.7 2.0 2.9 5.1 0.5 1.1 1.4 4.4 4.9 0.4 0.7 0.9 Gross Non-Performing Loans/ Total loans & advances 34.20 15.89 32.57 26.20 14.34 Loans Loss Provisions/ Operating income 275.61 96.19 184.03 70.61 22.46 (0.4) TOTAL (2.3) (0.0) ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Core capital/ Total deposit liabilities 14.47 18.37 15.16 6.29 8.77 2013 2014 2015 2016 2017 Core capital/ Total risk weighted assets 10.35 13.47 13.97 6.94 10.03 Quick assets / Total liabilities 33.13 34.81 33.95 28.97 33.61 Quick assets / Total deposit liabilities 48.37 48.84 39.22 30.11 34.42 252 BANKING SURVEY | 2018 BANKING SURVEY | 2018 253 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier IV Directors Contacts Financial Snapshot M Oriental Bank Limited 2017 2016 2015 2014 2013 Strategic Focus BALANCE SHEET (KSH IN MILLIONS) Timothy Gitonga-MD P.O. Box 52467 - 00200, Nairobi Total Assets (Ksh in 'billions') 11.1 Total Assets 10,579 9,920 8,496 7,858 7,007 Telephone: +254-20-4981000, 4981202, 4981301, Core Capital (Ksh in 'billions') 1.0 Total Liabilities 7,549 6,989 6,256 6,261 5,482 M Oriental Bank started operations in 4981405 Profit Before Tax (Ksh in 'thousands') -1.6 Net Assets (Shareholders’ Funds) 3,030 2,932 2,240 1,597 1,525 the year 2002 with new investments and Fax: +254-20-2712625 Non Perfoming Loans/Total Loans 32.6 Customer Deposits 7,463 6,937 6,218 6,231 5,377 Tier Ranking 11 board of directors. The head quarter is, Email: [email protected] Return on Assets (%) -14.1 Other Deposits - - - - 65 Overall Ranking 39 based at the Central Business District, Website: www.equitorialbank.co.ke Core Capital/Total Deposit Liability (%) -132.7 Total Deposits 7,463 6,937 6,218 6,231 5,442 Finance House, 7 Koinange Street. With Return on Capital Employed (%) 14.5 Loans and advances to customers (net of provisions) 7,289 6,657 5,271 4,660 4,075 Total loans and advances to customers 7,741 7,109 5,582 5,078 4,501 an ever expanding network of branches, Cash and balances with CBK 975 795 573 678 463 currently it has presence strategically LOAN LOSS PROVISION / OPERATING INCOME Kenya government securities 1,208 1,485 1,420 1,677 1,114 in CBD-Nairobi, Westlands-Nairobi, Income & Expenses (KSh Billions) Placements with other banks 562 446 690 299 812 Nakumatt Mega-Nairobi, Nakuru, PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Eldoret, Kitale and Mombasa 2017 2016 2015 Income 72.53% 48.43% Interest on loans and advances 974 1,005 796 682 614 18.58% 25.31% Interest on government securities 120 102 171 145 100 The bank posted a decent profit of KSh 5.91% Interest on placements and bank balances 49 65 60 31 15 116 million in 2017 which is a 226% 1.4 Other Interest Income 2 2 3 4 4 2013 2014 2015 2016 2017 increase compared to KSh 36 million 1.2 Total Interest Income 1,146 1,174 1,029 863 733 Net Interest Income 569 582 355 306 300 recorded in 2016.Total assets increased 0.8 Foreign exchange gain (loss) 13 9 24 16 10 by 7% from KSh 9.9 billion in 2016 to Fees and Commissions Income (net) 196 158 119 153 42 KSh10.6 billion in 2017.Customer deposits NON PERFORMING LOANS / TOTAL LOANS Other operating Income 29 (3) 4 17 27 0.2 0.2 0.2 0.00 0.00 0.03 also increased by 8% from KSh 6.9 billion Total net operating income 809 747 503 493 378 in 2016 to KSh 7.5 billion in 2017. Loans Total income 1,385 1,339 1,176 1,049 812 8.57% 9.00% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS and advances also increased by 9% from 6.90% ADVANCES INCOME Expenses KSh 6.7 billion in 2016 to KSh7.3 billion 3.77% 4.18% Interest on deposits 575 591 672 556 433 Interest on borrowed funds, deposits and placements from other banks 1 1 1 1 1 in 2017. Interest on loans and advances Other interest expense - - - - - declined by 3% to KSh 0.9 billion in 2017 2013 2014 2015 2016 2017 Total interest expense 577 592 673 557 434 from KSh 1.0 billon in 2016.Net interest General administrative expenses 319 276 240 227 196 income slightly declined by 2% from KSh Other operating expenses 197 175 133 103 94 582 million in 2016 to KSh 569 million Balance Sheet (KSh Biliions) Total operating expenses 516 451 374 331 290 in 2017. Total non-performing loans CORE CAPITAL/TOTAL DEPOSIT LIABILITY Total expenditure 1,093 1,043 1,047 887 724 2017 2016 2015 Operating profits before provisions 293 296 129 162 88 declined by 4% from KSh 769 million in Losses on loans and advances 177 261 88 78 30 2016 to KSh 741 million in 2016. Profits Before Tax (after exceptional Items) 116 36 41 84 58 DISCLOSURES (KSH IN MILLIONS) Total provisions (Loan loss provision and interest in suspense) 452 451 311 418 426 3.99% 4.83% 3.81% Non-performing loans Net of provisions & suspended interest 356 404 521 134 36 2.31% 14.5 1.65% 13.8 Total Non-performing loans (Net of interest in suspense) 741 769 734 459 372 11.1 10.4 Realisable value of securities 356 404 521 134 36 2013 2014 2015 2016 2017 8.5 8.3 Net NPL exposure - 0 - - - 6.8 7.4 Total Insider Loans 802 778 480 360 269 5.2 Core Capital 2,780 2,698 2,031 1,387 1,315 Supplementary Capital 106 90 77 62 56 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 2,887 2,788 2,108 1,450 1,371 RETURN ON AVERAGE ASSETS Quick Assets 2,744 2,726 2,683 2,654 2,389 Total risk weighted assets 8,506 7,207 6,172 5,659 4,510 SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 71.36 70.45 73.63 79.68 78.24 0.23% -0.75% -1.11% Shareholders’ funds/ Total assets 28.64 29.55 26.37 20.32 21.76 2013 2014 2015 -1.80%2016 -3.32%2017 Total income/ Total assets 13.10 13.50 13.84 13.36 11.59 Profitability (KSh Billions) Net interest margin/ Total assets 5.38 5.86 4.18 3.90 4.28 Net advances/ Total assets 68.90 67.11 62.04 59.31 58.16 2017 2016 2015 Total deposits/ Total assets 70.55 69.93 73.18 79.31 77.67 Gov. securities & placement with other banks/Total assets 16.73 19.47 24.84 25.15 27.49 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total deposits 20.63 22.98 23.45 29.97 22.51 Gov. securities & cash and balances with CBK/Total advances 15.60 20.90 25.45 33.02 24.75 1.7 1.4 Total advances/ Total deposits 103.72 102.48 89.77 81.49 82.70 Shareholders’ funds/ Total deposits 40.60 42.26 36.03 25.62 28.01 1.1 1.0 1.1 2.31% 0.8 0.8 2.06% 2.13% 2.20% 0.8 0.5 Average Cost of Funds (COF) 7.73 8.53 10.83 8.93 7.97 1.73% Cost Income Ratio (CIR) 63.79 60.32 74.33 67.10 76.64 PROFIT BEFORE (0.7) TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Gross Non-Performing Loans/ Total loans & advances 10.44 12.04 14.89 10.87 10.26 (1.0) INCOME EXPENSES INCOME Loans Loss Provisions/ Operating income 47.55 48.81 42.31 65.84 88.85 (1.6) Core capital/ Total deposit liabilities 37.25 38.90 32.67 22.26 24.16 Core capital/ Total risk weighted assets 32.69 37.44 32.91 24.51 29.16 2013 2014 2015 2016 2017 Quick assets / Total liabilities 36.35 39.00 42.88 42.39 43.58 Quick assets / Total deposit liabilities 36.76 39.30 43.14 42.59 43.90 254 BANKING SURVEY | 2018 BANKING SURVEY | 2018 255 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier IV Directors Contacts Financial Snapshot Trans-National Bank 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) Strategic Focus R.B Singh-CEO & MD P.O. Box 14357 - 00800, Nairobi Total Assets (Ksh in 'billions') 10.6 Total Assets 10,295 10,465 10,533 10,240 9,658 Telephone: +254-20-3743278/87, 3743289/98, Core Capital (Ksh in 'billions') 2.8 Total Liabilities 8,163 8,391 8,501 8,325 7,789 Transnational Bank is positioned as an 0714611466, 0733610410 Profit Before Tax (Ksh in 'thousands') 0.1 Net Assets (Shareholders' Funds) 2,132 2,074 2,033 1,915 1,869 enterprising Bank, banking the bread Fax: +254-20-3743270 Non Perfoming Loans/Total Loans 9.6 Customer Deposits 7,874 8,000 7,593 7,666 7,181 basket of the Kenyan economy. Indeed, Tier Ranking 4 Email: [email protected] Return on Assets (%) 1.1 Other Deposits 76 103 193 357 331 Overall Ranking 24 Website: www.orientalbank.co.ke Core Capital/Total Deposit Liability (%) 3.8 Total Deposits 7,950 8,103 7,786 8,024 7,512 the founders of the Bank Envisaged Return on Capital Employed (%) 37.3 Loans and advances to customers (net of provisions) 6,637 6,471 6,805 6,163 4,297 Agribusiness as the backbone of the Total loans and advances to customers 7,365 7,026 7,339 6,609 4,675 Kenyan economy when they came Cash and balances with CBK 944 823 1,019 703 942 together to form the bank. Kenya government securities 1,630 1,932 2,119 2,142 2,238 LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) Placements with other banks 502 465 74 723 768 PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) The bank recorded a net profit of KSh Income 54 million which is a decline of 66% 16.45% 2017 2016 2015 12.19% Interest on loans and advances 938 1,200 1,236 1,040 835 compared to a pofit of KSh 160 million 9.04% 8.81% Interest on government securities 163 214 199 206 230 7.83% recorded in 2016.Total assets slightly Interest on placements and bank balances 21 10 11 17 27 declined by 2% from KSh 10.5 billion that Other Interest Income - - - - - 2013 2014 2015 2016 2017 1.0 1.0 Total Interest Income 1,122 1,424 1,445 1,263 1,092 was posted in 2016 to KSh 10.3 billion 0.8 Net Interest Income 687 863 861 779 699 recorded in 2017. Customer deposits also Foreign exchange gain (loss) 30 30 36 23 57 slightly declined by 2% to KSh 7.9 billion Fees and Commissions Income (net) 235 186 188 160 159 in 2017 from KSh 8.0 billion in 2016. NON PERFORMING LOANS / TOTAL LOANS Other operating Income 20 - 2 1 (0) Loans and advances grew by 3% to KSh 0.2 0.2 0.1 0.0 0.1 0.1 Total net operating income 972 1,080 1,086 963 915 6.6 billion in 2017 compared to KSh 6.5 Total income 1,408 1,642 1,671 1,448 1,308 INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses recorded in the previous year. Interest on 2.76% ADVANCES INCOME 1.90% 2.01% 2.23% 1.93% Interest on deposits 424 507 527 458 363 loans and advances declined by 22% from Interest on borrowed funds, deposits and placements from other banks 10 53 56 26 30 KSh 1.2 billion that was posted in 2016 Other interest expense 2 1 1 1 0 to KSh 0.9 billion in 2017.Net interest 2013 2014 2015 2016 2017 Total interest expense 435 562 584 485 393 income declined by 20% from KSh 863 General administrative expenses 563 599 522 477 439 million in 2016 to KSh 687 million in Other operating expenses 275 225 236 204 163 2017.Total non -performing loans greatly Balance Sheet (KSh Billions) Total operating expenses 838 824 758 681 602 Total expenditure 1,273 1,385 1,343 1,165 995 increased by 95% from KSh 0.7 billion in CORE CAPITAL/TOTAL DEPOSIT LIABILITY 2017 2016 2015 Operating profits before provisions 135 257 328 282 313 2016 to KSh 1.4 billion in 2017. Losses on loans and advances 80 97 77 91 87 Profits Before Tax (after exceptional Items) 54 160 252 192 226 7.20% 6.90% DISCLOSURES (KSH IN MILLIONS) 6.05% 10.6 Total provisions (Loan loss provision and interest in suspense) 728 555 534 446 378 4.47% 4.12% 9.9 Non-performing loans Net of provisions & suspended interest 867 336 198 83 295 8.5 Total Non-performing loans (Net of interest in suspense) 1,371 702 638 458 615 7.5 6.9 7.3 Realisable value of securities 867 335 198 83 295 6.2 6.7 2013 2014 2015 2016 2017 5.3 Net NPL exposure - 2 - - - Total Insider Loans 1,038 1,065 1,071 1,507 1,210 Core Capital 1,888 1,969 1,928 1,814 1,807 Supplementary Capital 122 105 105 101 62 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 2,010 2,073 2,033 1,915 1,869 Quick Assets 3,076 3,220 3,211 3,569 3,948 Total risk weighted assets 6,663 9,974 9,473 8,824 5,956 SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 79.29 80.19 80.70 81.30 80.65 0.16% 0.21% 0.21% 0.09% 0.07% Shareholders' funds/ Total assets 20.71 19.81 19.30 18.70 19.35 Total income/ Total assets 13.67 15.69 15.86 14.14 13.54 2013 2014 2015 2016 2017 Profitability (KSh Billions) Net interest margin/ Total assets 6.67 8.24 8.18 7.60 7.24 Net advances/ Total assets 64.47 61.84 64.60 60.18 44.49 2017 2016 2015 Total deposits/ Total assets 77.22 77.43 73.91 78.36 77.78 Gov. securities & placement with other banks/Total assets 20.71 22.90 20.81 27.98 31.12 Gov. securities & cash and balances with CBK/Total deposits 25.01 26.33 29.78 27.79 32.93 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 22.14 27.50 28.87 32.42 47.88 Total advances/ Total deposits 92.64 86.72 94.26 82.37 62.23 1.1 1.2 1.0 Shareholders' funds/ Total deposits 26.82 25.59 26.11 23.86 24.88 Average Cost of Funds (COF) 5.46 6.92 7.49 6.03 5.23 0.8 2.00% 0.7 Cost Income Ratio (CIR) 86.17 76.25 69.81 70.67 65.74 1.77% 1.67% 0.7 1.57% 1.48% 0.6 0.6 Gross Non-Performing Loans/ Total loans & advances 21.66 12.68 9.98 8.01 14.38 0.5 Loans Loss Provisions/ Operating income 51.79 33.88 40.43 38.96 34.95 0.12 0.04 0.04 Core capital/ Total deposit liabilities 23.75 24.29 24.76 22.61 24.05 PROFIT BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 28.33 19.74 20.35 20.56 30.33 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total liabilities 37.68 38.37 37.77 42.87 50.69 Quick assets / Total deposit liabilities 38.69 39.74 41.24 44.48 52.56 256 BANKING SURVEY | 2018 BANKING SURVEY | 2018 257 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier IV Directors Contacts Financial Snapshot Paramount Universal Bank 2017 2016 2015 2014 2013 Strategic Focus Sammy Langat- CEO P.O. Box 75840 - 00400, Nairobi Total Assets (Ksh in 'billions') 10.3 BALANCE SHEET (KSH IN MILLIONS) Telephone: +254-20-2252216/19, 2224235/6, Core Capital (Ksh in 'billions') 1.9 Total Assets 9,541 9,427 10,526 10,402 8,029 Fax: +254-20-2252225 Profit Before Tax (Ksh in 'thousands') 0.0 Total Liabilities 7,782 7,783 8,989 9,024 6,798 Paramount Bank Limited was established Email: [email protected] Non Perfoming Loans/Total Loans 18.6 Net Assets (Shareholders’ Funds) 1,760 1,644 1,536 1,378 1,230 in 1993 as a nonbanking financial Tier Ranking 8 Customer Deposits 7,729 7,668 8,067 8,048 6,601 Website: www.tnbl.co.ke Return on Assets (%) 0.3 institution known as Combined Overall Ranking 34 Other Deposits - 51 685 936 136 Core Capital/Total Deposit Liability (%) 1.6 Total Deposits 7,729 7,719 8,752 8,984 6,736 Finance Ltd, with a share capital of Return on Capital Employed (%) 23.7 Loans and advances to customers (net of provisions) 5,902 5,799 5,872 4,448 3,272 Kshs.25Million, offering general deposits Total loans and advances to customers 6,965 6,243 6,485 5,389 4,045 and personal lending products. In 1995, Cash and balances with CBK 1,100 765 1,008 500 409 it commenced banking business as a LOAN LOSS PROVISION / OPERATING INCOME Kenya government securities 2,168 2,304 1,375 3,828 2,782 fully-fledged commercial bank offering Income & Expenses (KSh Billions) Placements with other banks 55 185 379 1,191 1,110 a complete range of banking services PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) including foreign exchange, current 2017 2016 2015 Income 10.16% Interest on loans and advances 768 942 945 668 616 accounts and corporate finance products. 6.85% 7.64% 7.93% 6.64% Interest on government securities 225 218 347 298 318 The share capital was then enhanced and Interest on placements and bank balances 17 12 37 35 23 changed its name to Paramount Bank 1.2 1.2 2013 2014 2015 2016 2017 Other Interest Income 7 10 13 17 20 Limited. 0.9 Total Interest Income 1,017 1,182 1,341 1,019 977 Net Interest Income 374 296 556 338 310 Foreign exchange gain (loss) 10 12 13 10 7 The net profit decline by 8% from KSh NON PERFORMING LOANS / TOTAL LOANS Fees and Commissions Income (net) 32 41 48 47 33 105 million in 2016 to KSh 96 million in 0.2 0.2 0.2 0.02 0.01 0.01 Other operating Income 55 129 (106) 39 (22) 2017.Total assets slightly increased by Total net operating income 470 478 512 434 328 1% from KSh 9.4 billion in 2016 to KSh 4.25% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Total income 1,114 1,364 1,297 1,115 995 ADVANCES INCOME 9.5 billion in 2017.Customer deposits 2.82% 2.49% Expenses 1.57% 1.96% Interest on deposits 641 868 757 678 666 also slightly increased by 1% to KSh 7.7 Interest on borrowed funds, deposits and placements from other banks 2 18 28 3 0 in 2017 compared to KSh 7.6 posted in Other interest expense - - - - - 2016.Loans and advances grew by 2% 2013 2014 2015 2016 2017 Total interest expense 643 886 785 681 667 from KSh 5.8 billion recorded in 2016 to General administrative expenses 230 228 216 185 153 KSh 5.9 billion in 2017.Interest on loans Other operating expenses 97 85 115 102 67 and advances declined by 18% to KSh Balance Sheet (KSh Billions) Total operating expenses 326 313 331 287 219 CORE CAPITAL/TOTAL DEPOSIT LIABILITY Total expenditure 970 1,200 1,116 968 886 768 million in 2017 compared to KSh 2017 2016 2015 Operating profits before provisions 144 165 181 147 109 948 million recorded in 2016.Net interest Losses on loans and advances 48 60 12 10 10 income increased by26% to KSh 374 4.86% Profits Before Tax (after exceptional Items) 96 105 169 137 99 million compared to KSh 296 million in 4.72% 4.76% 4.66% DISCLOSURES (KSH IN MILLIONS) 2016.Total non- performing loans grew 4.43% 10.3 10.5 10.5 Total provisions (Loan loss provision and interest in suspense) 1,063 443 613 941 773 by 30% from KSh 480 million in 2016 to Non-performing loans Net of provisions & suspended interest 489 335 201 122 173 8.0 KSh 623 million recorded in 2017. 7.9 7.6 Total Non-performing loans (Net of interest in suspense) 623 480 305 294 336 6.6 6.5 6.8 2013 2014 2015 2016 2017 Realisable value of securities 489 335 201 122 173 Net NPL exposure - 0 - - - Total Insider Loans 640 437 491 558 348 Core Capital 1,662 1,555 1,450 1,314 1,175 Supplementary Capital 71 82 82 61 44 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Total Capital 1,732 1,638 1,531 1,376 1,219 Quick Assets 3,323 3,255 2,762 5,519 4,301 Total risk weighted assets 5,880 5,978 6,349 5,404 2,914 SELECTED PERFORMANCE RATIOS (IN %) 0.48% 0.47% 0.38% 0.30% Total liabilities/ Total assets 81.56 82.56 85.40 86.75 84.68 0.10% Shareholders’ funds/ Total assets 18.44 17.44 14.60 13.25 15.32 Total income/ Total assets 11.67 14.47 12.32 10.71 12.39 2013 2014 2015 2016 2017 Profitability (KSh Billions) Net interest margin/ Total assets 3.92 3.14 5.29 3.25 3.86 Net advances/ Total assets 61.86 61.52 55.78 42.76 40.75 2017 2016 2015 Total deposits/ Total assets 81.01 81.88 83.15 86.37 83.90 Gov. securities & placement with other banks/Total assets 23.30 26.41 16.66 48.25 48.47 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total deposits 34.25 32.56 22.64 41.61 39.74 Gov. securities & cash and balances with CBK/Total advances 31.12 36.91 21.20 71.05 68.77 Total advances/ Total deposits 90.11 80.88 74.10 59.98 60.05 1.4 1.4 Shareholders’ funds/ Total deposits 22.77 21.30 17.55 15.34 18.27 1.45% 1.38% 1.22% 1.1 1.1 1.1 Average Cost of Funds (COF) 8.32 11.48 8.97 7.58 9.90 1.08% 1.06% 1.0 Cost Income Ratio (CIR) 69.38 65.53 64.60 66.11 66.83 Gross Non-Performing Loans/ Total loans & advances 22.28 12.47 12.56 19.72 23.40 0.6 0.6 0.1 0.2 0.3 0.4 Loans Loss Provisions/ Operating income 28.64 30.30 20.22 39.66 49.48 Core capital/ Total deposit liabilities 21.50 20.15 16.57 14.63 17.44 PROFIT BEFORE TAX TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 28.26 26.02 22.84 24.32 40.32 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total liabilities 42.71 41.82 30.72 61.16 63.26 Quick assets / Total deposit liabilities 42.99 42.17 31.56 61.43 63.84 258 BANKING SURVEY | 2018 BANKING SURVEY | 2018 259 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier IV UBA Kenya Bank 2017 2016 2015 2014 2013 Directors Contacts Financial Snapshot BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Ayaz Merali- CEO P.O. Box 14001 - 00800, Nairobi Total Assets (Ksh in 'billions') 9.5 Total Assets 6,505 5,601 7,781 4,756 3,710 Telephone: +254-20-4449266/7/8, 446106/7, Core Capital (Ksh in 'billions') 1.7 Total Liabilities 4,343 3,458 6,662 3,617 2,651 In November 2008, in line with UBA’s Profit Before Tax (Ksh in 'thousands') 0.1 Net Assets (Shareholders' Funds) 2,162 2,143 1,119 1,139 1,059 4443896, 445722 strategic objective of achieving Pan Non Perfoming Loans/Total Loans 9.8 Customer Deposits 2,993 1,947 4,137 3,576 2,483 Fax: +254-20-449265 African status, UBA Kenya Bank Limited Other Deposits 1,201 1,378 1,811 - 87 Tier Ranking 7 Email: [email protected] Return on Assets (%) 1.0 Total Deposits 4,194 3,325 5,948 3,576 2,570 was formed as a wholly owned subsidiary Overall Ranking 27 Website: www.paramountbank.co.ke Core Capital/Total Deposit Liability (%) 5.4 Loans and advances to customers (net of provisions) 3,270 3,058 2,733 734 790 of UBA plc, and later licensed by the Return on Capital Employed (%) 21.5 Total loans and advances to customers 3,309 3,127 2,790 785 805 Central Bank of Kenya (CBK). The Cash and balances with CBK 205 205 243 486 158 Bank opened its doors to the public on Kenya government securities 2,003 1,698 1,402 1,473 1,465 October 7, 2009, after the government LOAN LOSS PROVISION / OPERATING INCOME Placements with other banks 232 144 2,901 1,590 861 Income & Expenses (KSh Billions) gazette UBA Kenya Bank Ltd as a bank PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) in a supplementary edition of the Kenya 2017 2016 2015 Income Interest on loans and advances 377 307 180 93 99 gazette. 9.90% 7.93% 6.06% 5.73% Interest on government securities 156 122 126 106 106 4.04% Interest on placements and bank balances 32 94 99 32 52 The bank net profit in 2017 was KSh 14 0.9 0.9 Other Interest Income - - - - - 2013 2014 2015 2016 2017 million which is a 72% decline compared 0.8 Total Interest Income 566 524 405 231 256 Net Interest Income 316 221 111 65 122 to KSh 50 million recorded in 2016.Total Foreign exchange gain (loss) 60 81 44 19 8 assets increased by 16% from KSh 5.6 Fees and Commissions Income (net) 83 81 156 108 95 billion in 2016 to KSh 6.5 billion recorded NON PERFORMING LOANS / TOTAL LOANS Other operating Income 144 206 38 55 21 in 2017.Customer deposits also greatly 0.03 0.04 0.05 0.02 0.01 0.04 Total net operating income 603 589 349 246 246 increased by 54% from KSh 1.9 billion 4.68% Total income 853 892 643 412 381 3.94% 4.46% INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses in 2016 to KSh 2.9 billion in 2017.Loans ADVANCES INCOME 2.51% 2.49% Interest on deposits 180 160 194 151 97 and advances grew by 7% from KSh 3.1 Interest on borrowed funds, deposits and placements from other banks 66 126 79 5 38 billion in 2016 to KSh 3.2 billion in 2017. Other interest expense 4 18 21 10 0 Interest on loans and advances also Total interest expense 251 303 295 166 135 increased by 23% from KSh 307 million 2013 2014 2015 2016 2017 General administrative expenses 368 352 395 422 399 in 2016 to KSh 377 million in 2017.Net Other operating expenses 194 178 238 115 101 interest income grew by 43% to KSh 316 Balance Sheet (KSh Billions) Total operating expenses 562 530 633 536 500 Total expenditure 812 834 927 702 635 million in 2017 from KSh 221million in 2016.Total non-performing loans greatly CORE CAPITAL/TOTAL DEPOSIT LIABILITY 2017 2016 2015 Operating profits before provisions 41 58 (284) (290) (254) Losses on loans and advances 27 9 20 41 24 increased by 151% in 2017 to KSh 142 Profits Before Tax (after exceptional Items) 14 50 (304) (331) (278) million from KSh 57 million in 2016. 4.03% 4.30% DISCLOSURES (KSH IN MILLIONS) 3.49% 3.31% Total provisions (Loan loss provision and interest in suspense) 39 68 57 51 15 2.93% 10.5 9.5 9.4 Non-performing loans Net of provisions & suspended interest 113 0 1 1 1 Total Non-performing loans (Net of interest in suspense) 142 57 49 46 13 7.7 7.7 8.1 Realisable value of securities 113 - - - - 2013 2014 2015 2016 2017 5.9 5.8 5.9 Net NPL exposure - 0 1 1 1 Total Insider Loans 396 227 260 99 59 Core Capital 2,162 2,131 1,107 1,127 1,059 Supplementary Capital - 12 12 12 - Total Capital 2,162 2,143 1,119 1,139 1,059 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES RETURN ON AVERAGE ASSETS Quick Assets 2,440 2,047 4,546 3,549 2,484 Total risk weighted assets 5,575 5,541 4,703 1,943 2,258 SELECTED PERFORMANCE RATIOS (IN %) 0.26% 0.30% 0.32% Total liabilities/ Total assets 66.76 61.73 85.62 76.05 71.46 0.21% 0.20% Shareholders' funds/ Total assets 33.24 38.27 14.38 23.95 28.54 Total income/ Total assets 13.12 15.93 8.27 8.66 10.26 Profitability (KSh Billion) Net interest margin/ Total assets 4.85 3.94 1.42 1.36 3.28 2013 2014 2015 2016 2017 Net advances/ Total assets 50.27 54.60 35.13 15.43 21.29 Total deposits/ Total assets 64.47 59.37 76.45 75.20 69.28 2017 2016 2015 Gov. securities & placement with other banks/Total assets 34.35 32.88 55.30 64.42 62.71 Gov. securities & cash and balances with CBK/Total deposits 33.95 33.97 21.14 41.20 43.75 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 60.53 54.29 50.25 187.66 182.03 1.3 Total advances/ Total deposits 78.90 94.03 46.90 21.95 31.32 1.2 Shareholders' funds/ Total deposits 51.55 64.46 18.81 31.85 41.20 1.0 Average Cost of Funds (COF) 5.88 8.59 4.59 4.35 5.22 2.08% 2.15% 0.9 Cost Income Ratio (CIR) 93.20 90.07 181.36 218.01 203.13 1.73% 1.77% 0.8 1.67% 0.6 Gross Non-Performing Loans/ Total loans & advances 4.58 2.19 2.07 6.65 1.94 0.5 0.5 0.5 Loans Loss Provisions/ Operating income 4.91 9.59 13.73 18.30 4.79 0.1 0.1 0.2 Core capital/ Total deposit liabilities 51.55 64.09 18.61 31.50 41.21 Core capital/ Total risk weighted assets 38.78 38.46 23.53 57.98 46.90 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Quick assets / Total liabilities 56.18 59.19 68.24 98.14 93.72 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Quick assets / Total deposit liabilities 58.17 61.55 76.43 99.25 96.66 260 BANKING SURVEY | 2018 BANKING SURVEY | 2018 261 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier IV Directors Contacts Financial Snapshot Middle East Bank 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Mr. Isaac Mwige-MD & CEO P.O. Box 34154 - 00100, Nairobi Total Assets (Ksh in 'billions') 6.5 Total Assets 5,121 5,234 5,678 5,937 5,766 Telephone: +254-20-3612000/1/2 Core Capital (Ksh in 'billions') 2.2 Total Liabilities 3,959 4,041 4,414 4,703 4,591 Middle East Bank Kenya Ltd (MEB) was Fax: +254-20-3612049 Profit Before Tax (Ksh in 'thousands') 0.0 Net Assets (Shareholders' Funds) 1,162 1,192 1,264 1,234 1,175 Website: www.ubagroup.com Non Perfoming Loans/Total Loans 4.3 incorporated in Kenya in October 1980 Tier Ranking 3 Customer Deposits 3,908 3,996 4,099 4,127 3,649 and established business in August 1981 Return on Assets (%) 0.2 Other Deposits - - 100 505 873 Overall Ranking 21 Core Capital/Total Deposit Liability (%) 0.6 Total Deposits 3,908 3,996 4,199 4,632 4,522 with branches in Nairobi and Mombasa. Return on Capital Employed (%) 51.5 Loans and advances to customers (net of provisions) 2,769 3,617 3,731 3,466 3,711 It was established in Kenya as part Total loans and advances to customers 3,242 4,015 4,009 3,719 3,872 of the Al-Futtaim. Group, a leading Cash and balances with CBK 810 301 405 451 210 conglomerate from the United Arab Kenya government securities 974 681 1,114 1,438 1,127 Emirates owned by Middle East Bank Placements with other banks 90 257 75 238 366 LOAN LOSS PROVISION / OPERATING INCOME Group, UAE. In 1991, Al-Futtaim sold its Income & Expenses (KSh Billions) PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income shareholding in MEB and thus in April 2017 2016 2015 of that year, control of the bank passed 3.27% Interest on loans and advances 396 533 597 554 499 2.45% Interest on government securities 56 52 82 99 88 1.71% from foreign to local investors thereby 0.86% 0.88% Interest on placements and bank balances 4 2 10 29 30 localizing its ownership. 0.4 Other Interest Income - - 0 1 0 2013 2014 2015 2016 2017 Total Interest Income 455 586 690 682 617 0.3 Net Interest Income 179 217 240 271 277 The bank recorded a net loss of KSh 42 Foreign exchange gain (loss) 29 33 41 35 39 million in 2017 this is a 59% improvement 0.2 Fees and Commissions Income (net) 42 39 48 47 42 compared to a loss of KSh 101 million 0.2 NON PERFORMING LOANS / TOTAL LOANS Other operating Income 37 45 41 44 37 that was recorded in 2016. Total assets 0.1 0.1 0.0 0.1 0.1 Total net operating income 287 333 370 397 394 slightly declined by 2% from KSh 5.2 Total income 563 703 820 808 735 INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Expenses billion in 2016 to KSh 5.1 billion in 2017. 1.19% ADVANCES INCOME Interest on deposits 273 348 417 388 318 Customer deposits declined by 2% from 0.82% Interest on borrowed funds, deposits and placements from other banks 3 4 33 14 10 KSh 4.0 billion in 2016 to KSh 3.9 billion 0.35% 0.37% 0.39% Other interest expense 1 18 0 9 13 in 2017. Loans and advances declined by Total interest expense 276 370 450 411 340 23% to KSh2.8 billion in 2017 from KSh 2013 2014 2015 2016 2017 General administrative expenses 237 219 206 193 162 3.6 billion in 2016.Interest on loans and Other operating expenses 64 151 80 90 87 advances was KSh 396 million in 2017 Balance Sheet (KSh Billions) Total operating expenses 301 370 285 284 249 Total expenditure 578 739 735 694 590 this is 26% decrease compared to KSh Operating profits before provisions (14) (36) 85 113 145 533 million that was recorded in 2016. CORE CAPITAL/TOTAL DEPOSIT LIABILITY 2017 2016 2015 Losses on loans and advances 27 65 43 37 64 Net interest income declined by 17% Profits Before Tax (after exceptional Items) (42) (101) 42 76 81 from KSh 217 million recorded in 2016 to DISCLOSURES (KSH IN MILLIONS) KSh179 million recorded in 2017. Total Total provisions (Loan loss provision and interest in suspense) 473 398 278 253 161 11.44% non-performing loans increased by 27% 9.21% Non-performing loans Net of provisions & suspended interest 965 795 816 862 525 7.36% 5.63% 7.8 3.32% Total Non-performing loans (Net of interest in suspense) 1,177 926 991 1,003 628 to KSh 1.2 billion in 2017 from KSh 0.9 6.5 billion in 2016. 5.6 Realisable value of securities 965 795 816 862 525 2013 2014 2015 2016 2017 Net NPL exposure - (0) (0) 0 - 4.1 Total Insider Loans 83 634 1,308 303 248 3.3 3.0 3.1 2.7 Core Capital 1,143 1,173 1,247 1,217 1,138 1.9 Supplementary Capital 14 13 247 11 27 Total Capital 1,157 1,186 1,494 1,227 1,165 TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES RETURN ON AVERAGE ASSETS Quick Assets 1,874 1,239 1,594 2,127 1,703 Total risk weighted assets 2,717 3,749 1,257 3,641 3,212 SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 77.31 77.22 77.74 79.22 79.62 0.13% 0.04% Shareholders' funds/ Total assets 22.69 22.78 22.26 20.78 20.38 Total income/ Total assets 11.00 13.43 14.45 13.61 12.74 2013 -1.40%2014 -0.87%2015 2016 2017 -1.50% Profitability (KSh Billions) Net interest margin/ Total assets 3.50 4.14 4.23 4.57 4.80 Net advances/ Total assets 54.07 69.10 65.72 58.38 64.36 2017 2016 2015 Total deposits/ Total assets 76.31 76.35 73.96 78.02 78.43 Gov. securities & placement with other banks/Total assets 20.78 17.92 20.93 28.23 25.89 Gov. securities & cash and balances with CBK/Total deposits 34.84 18.76 26.76 31.82 23.19 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total advances 30.04 16.96 27.79 38.67 29.10 Total advances/ Total deposits 82.97 100.47 95.46 80.29 85.63 0.6 0.6 0.6 0.5 Shareholders' funds/ Total deposits 29.73 29.83 30.09 26.63 25.99 1.14% 1.10% 1.17% 0.4 Average Cost of Funds (COF) 7.05 8.80 10.70 8.68 7.25 1.02% 0.3 0.90% 0.3 0.3 Cost Income Ratio (CIR) 104.98 110.92 77.01 71.43 63.19 0.01 0.05 0.3 Gross Non-Performing Loans/ Total loans & advances 44.35 29.72 27.27 30.00 17.73 Loans Loss Provisions/ Operating income 73.81 39.36 47.42 35.47 26.03 PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Core capital/ Total deposit liabilities 29.25 29.35 29.69 26.26 25.17 (0.30) INCOME EXPENSES INCOME Core capital/ Total risk weighted assets 42.06 31.29 99.18 33.41 35.43 2013 2014 2015 2016 2017 Quick assets / Total liabilities 47.34 30.65 36.11 45.23 37.10 Quick assets / Total deposit liabilities 47.97 30.99 37.95 45.92 37.66 262 BANKING SURVEY | 2018 BANKING SURVEY | 2018 263 INDIVIDUAL BANKS INDIVIDUAL BANKS Individual Banks - Tier IV Directors Contacts Financial Snapshot Mayfair Bank 2017 Directors BALANCE SHEET (KSH IN MILLIONS) Strategic Focus Mr. Dhirendra Rana-M. D P.O. Box 47387 - 00100, Nairobi Total Assets (Ksh in 'billions') 5.1 Raminder Bir Singh – CEO/Managing Director Total Assets 3,548 Telephone: +254-20-2723120/24, 2722879, Core Capital (Ksh in 'billions') 1.1 Total Liabilities 2,379 Mayfair Bank Limited (MBL) 2723124, 2723130 Profit Before Tax (Ksh in 'thousands') 0.0 Net Assets (Shareholders' Funds) 1,169 Fax: +254-20-343776/2256901 Non Perfoming Loans/Total Loans 36.3 is a locally incorporated Tier Ranking 6 Customer Deposits 2,080 Tier Ranking 1 Bank established by a group Email: [email protected] Return on Assets (%) -0.8 Other Deposits - Overall Ranking 26 Overall Ranking 18 Website: www.mebkenya.com Core Capital/Total Deposit Liability (%) -3.6 Total Deposits 2,080 of prominent and highly Loans and advances to customers (net of provisions) 235 successful business people Return on Capital Employed (%) 29.3 Contacts Total loans and advances to customers 235 drawn from diverse business KAM House, Mezzanine floor, Cash and balances with CBK 190 sectors of the economy, Kenya government securities 1,621 Opposite Westgate, Mwanzi Road, Westlands, and enjoying excellent LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) Placements with other banks 888 PO Box 2051-00606, Sarit Centre Nairobi-Kenya reputation both within Contact: +254 20 3951 000, +254 709 063 000 PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Email: [email protected] 2017 2016 2015 Income Kenya and abroad. MBL Web: hhtps://www.mayfair-bank.com 13.42% Interest on loans and advances 2 was granted an operating 8.62% 4.73% 6.45% 7.16% Interest on government securities 25 license by the Central Bank Interest on placements and bank balances 70 of Kenya (CBK) on June 20th Financial Snapshot 2013 2014 2015 2016 2017 0.6 Other Interest Income 0 2017, to conduct banking Total Assets (Ksh in 'billions') 3.5 0.5 Total Interest Income 97 business in Kenya. The Core Capital (Ksh in 'billions') 1.2 Net Interest Income 60 Profit Before Tax (Ksh in 'thousands') -0.3 0.4 Foreign exchange gain (loss) 1 Bank commenced banking Non Perfoming Loans/Total Loans 0.0 Fees and Commissions Income (net) 3 operations on August 1st NON PERFORMING LOANS / TOTAL LOANS Other operating Income 2 2017. Headquartered in Return on Assets (%) -8.4 0.04 0.04 0.05 0.00 0.00 0.01 Total net operating income 66 Nairobi, MBL will principally Core Capital/Total Deposit Liability (%) -25.5 Return on Capital Employed (%) 56.2 INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Total income 103 target the corporate 8.06% Expenses ADVANCES INCOME market segment along with 5.45% 4.96% 5.40% Interest on deposits 38 3.22% medium enterprises and BPR Stability Assesment % Interest on borrowed funds, deposits and placements from other banks - Other interest expense - High Net Worth Individuals Loan Loss Provision / Operating Income 0.00% 2013 2014 2015 2016 2017 Total interest expense 38 offering a broad array of Non Performing Loans / Total Loans 0.00% General administrative expenses 259 digital and mobile banking Core Capital/Total Deposit Liability 17.00% Other operating expenses 102 products. It has commenced Return on Average Assets -11.09% Total operating expenses 361 Balance Sheet (KSh Billions) business with an initial Average Cost of Funds 0.62% Total expenditure 399 CORE CAPITAL/TOTAL DEPOSIT LIABILITY network of three branches 2017 2016 2015 Operating profits before provisions (296) Losses on loans and advances 2 (two in Nairobi and one in Profits Before Tax (after exceptional Items) (298) Mombasa). DISCLOSURES (KSH IN MILLIONS) 5.40% 5.34% 5.32% 5.7 Total provisions (Loan loss provision and interest in suspense) - 4.78% 5.1 5.2 The bank had the following 4.58% Non-performing loans Net of provisions & suspended interest - as at December 2017.Total 4.0 4.1 Total Non-performing loans (Net of interest in suspense) - 3.9 3.7 3.6 Realisable value of securities - assets was KSh 3.5 billion, 2013 2014 2015 2016 2017 2.8 Net NPL exposure - customer deposits was KSh 2 Total Insider Loans 81 billion, Loans and advances Core Capital 1,169 was 235 million, interest on Supplementary Capital - loans and advances was KSh Total Capital 1,169 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES 2 million and Net interest Quick Assets 2,699 Total risk weighted assets 1,237 income was KSh 60 million. SELECTED PERFORMANCE RATIOS (IN %) The bank had a loss of KSh 0.25% 0.24% 0.13% Total liabilities/ Total assets 67.05 298 million. -0.15% Shareholders' funds/ Total assets 32.95 2013 2014 2015 -0.34%2016 2017 Total income/ Total assets 2.91 Profitability (KSh Billions) Net interest margin/ Total assets 1.68 Net advances/ Total assets 6.63 2017 2016 2015 Total deposits/ Total assets 58.64 Gov. securities & placement with other banks/Total assets 70.72 AVERAGE COST OF FUNDS Gov. securities & cash and balances with CBK/Total deposits 51.03 Gov. securities & cash and balances with CBK/Total advances 688.45 0.7 Total advances/ Total deposits 11.32 1.85% 0.6 Shareholders' funds/ Total deposits 56.19 1.60% 1.56% Average Cost of Funds (COF) 1.80 0.5 0.4 1.29% 1.27% Cost Income Ratio (CIR) 549.91 0.4 0.3 0.4 0.3 0.3 Gross Non-Performing Loans/ Total loans & advances - 0.04 Loans Loss Provisions/ Operating income - Core capital/ Total deposit liabilities 56.17 (0.04) PBT (0.10) TOTAL INTEREST INCOME TOTAL INTEREST TOTAL OPERATING Core capital/ Total risk weighted assets 94.47 2013 2014 2015 2016 2017 EXPENSES INCOME Quick assets / Total liabilities 113.45 Quick assets / Total deposit liabilities 129.73 264 BANKING SURVEY | 2018 BANKING SURVEY | 2018 265 INDIVIDUAL BANKS INDIVIDUAL BANKS Tier IV - Aggregate DIB Bank 2017 Strategic Focus Directors Aggregate Tier IV 2017 2016 2015 2014 2013 BALANCE SHEET (KSH IN MILLIONS) Adnan Chilwan – Group CEO BALANCE SHEET (KSH IN MILLIONS) Total Assets 2,610 Total Assets 111,863 118,703 123,943 122,308 104,612 Total Liabilities 1,341 The Dubai Islamic Bank (DIB) Total Liabilities 89,197 97,737 103,620 103,368 87,539 Net Assets (Shareholders' Funds) 1,269 is an Islamic bank in Dubai, Net Assets (Shareholders' Funds) 22,667 20,967 20,323 18,940 17,073 Customer Deposits 1,181 Tier Ranking 2 established in 1975. It is the Customer Deposits 67,907 77,162 85,966 92,009 78,070 Other Deposits 103 Overall Ranking 20 Other Deposits 2,781 3,858 7,249 5,428 4,256 Total Deposits 1,285 first Islamic bank to have Total Deposits 70,688 81,020 93,215 97,437 82,326 Loans and advances to customers (net of provisions) 291 incorporated the principles Contacts Loans and advances to customers (net of provisions) 62,467 68,211 72,940 68,143 57,519 Total loans and advances to customers 291 of Islam in all its practices Junction of Bunyala / Lower Hill Road, Upper Hill Total loans and advances to customers 72,676 76,463 79,222 75,634 62,256 Cash and balances with CBK 110 and is the largest Islamic Cash and balances with CBK 7,682 7,179 7,374 8,262 6,543 Kenya government securities - P.O Box 6450-00200 Nairobi bank in the UAE. Kenya government securities 21,024 26,526 23,716 25,914 22,634 Placements with other banks 761 +254 (20) 709 913 111 Placements with other banks 5,054 3,947 6,893 9,299 7,010 PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Web: http://www.dibkenya.co.ke PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) Income Income Interest on loans and advances 5 Interest on loans and advances 8,262 11,862 11,784 10,819 9,377 Interest on government securities - The bank had the following Interest on government securities 1,783 2,372 2,408 2,139 2,023 Interest on placements and bank balances 8 Financial Snapshot Interest on placements and bank balances 325 358 506 326 410 Other Interest Income - as at December 2017. Total Assets (Ksh in 'billions') 2.6 Other Interest Income 13 22 45 56 63 Total Interest Income 13 Total assets was KSh 2.6 Core Capital (Ksh in 'billions') 1.3 Total Interest Income 10,383 14,614 14,743 13,340 11,873 Net Interest Income 4 billion, customer deposits Profit Before Tax (Ksh in 'thousands') -0.8 Net Interest Income 4,170 6,173 6,469 6,185 5,913 Foreign exchange gain (loss) - was KSh 1.1 billion, loans Non Perfoming Loans/Total Loans 0.0 Foreign exchange gain (loss) 260 329 385 551 345 Fees and Commissions Income (net) 9 and advances was KSh 291 Return on Assets (%) -32.2 Fees and Commissions Income (net) 1,811 1,570 1,711 1,581 1,474 Other operating Income - million, interest on loans and Other operating Income 985 1,465 756 851 476 Total net operating income 13 Core Capital/Total Deposit Liability (%) -66.1 Total net operating income 7,247 9,542 9,322 9,168 8,208 Total income 22 advances was KSh 5 million Return on Capital Employed (%) 98.6 Total income 13,460 17,983 17,596 16,323 14,168 Expenses and Net interest income was Expenses Interest on deposits 9 KSh 4 million. The bank had BPR Stability Assesment % Interest on deposits 4,862 6,910 7,500 6,743 5,464 Interest on borrowed funds, deposits and placements from other banks - a loss of KSh 839 million. Loan Loss Provision / Operating Income 0.00% Interest on borrowed funds, deposits and placements from other banks 889 1,224 720 372 170 Other interest expense - Other interest expense 462 307 54 40 326 Total interest expense 9 Non Performing Loans / Total Loans 0.00% Total interest expense 6,213 8,441 8,274 7,155 5,960 General administrative expenses 638 Core Capital/Total Deposit Liability 17.30% General administrative expenses 6,015 5,443 5,212 4,581 4,897 Other operating expenses 214 Return on Average Assets -11.28% Other operating expenses 3,153 3,685 2,466 2,208 1,937 Total operating expenses 852 Average Cost of Funds 0.24% Total operating expenses 9,168 9,127 7,678 6,789 6,834 Total expenditure 861 Total expenditure 15,381 17,568 15,952 13,944 12,794 Operating profits before provisions (838) Operating profits before provisions (1,920) 414 1,643 2,379 1,374 Losses on loans and advances 1 Losses on loans and advances 1,937 3,519 1,712 2,085 1,041 Profits Before Tax (after exceptional Items) (839) Profits Before Tax (after exceptional Items) (3,857) (3,104) (69) 294 332 DISCLOSURES (KSH IN MILLIONS) DISCLOSURES (KSH IN MILLIONS) Total provisions (Loan loss provision and interest in suspense) - Total provisions (Loan loss provision and interest in suspense) 10,208 8,252 6,282 7,491 4,736 Non-performing loans Net of provisions & suspended interest - Non-performing loans Net of provisions & suspended interest 7,066 7,137 5,923 6,315 4,296 Total Non-performing loans (Net of interest in suspense) - Total Non-performing loans (Net of interest in suspense) 13,055 12,598 9,637 10,241 6,855 Realisable value of securities - Realisable value of securities 6,781 7,048 5,922 6,313 3,958 Net NPL exposure - Net NPL exposure 285 90 1 1 338 Total Insider Loans 80 Total Insider Loans 5,420 5,093 5,960 5,746 4,538 Core Capital 1,267 Core Capital 19,308 18,178 17,252 16,602 15,070 Supplementary Capital 2 Supplementary Capital 912 1,469 1,928 1,486 1,115 Total Capital 1,269 Total Capital 20,219 19,647 19,180 18,088 16,185 Quick Assets 871 Quick Assets 33,760 37,652 37,983 43,474 36,187 Total risk weighted assets 1,811 Total risk weighted assets 88,778 93,005 92,744 87,798 66,619 SELECTED PERFORMANCE RATIOS (IN %) SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 51.39 Total liabilities/ Total assets 79.74 82.34 83.60 84.51 83.68 Shareholders' funds/ Total assets 48.61 Shareholders' funds/ Total assets 20.26 17.66 16.40 15.49 16.32 Total income/ Total assets 0.85 Total income/ Total assets 12.03 15.15 14.20 13.35 13.54 Net interest margin/ Total assets 0.16 Net interest margin/ Total assets 3.73 5.20 5.22 5.06 5.65 Net advances/ Total assets 11.13 Net advances/ Total assets 55.84 57.46 58.85 55.71 54.98 Total deposits/ Total assets 49.22 Total deposits/ Total assets 63.19 68.25 75.21 79.67 78.70 Gov. securities & placement with other banks/Total assets 29.17 Gov. securities & placement with other banks/Total assets 23.31 25.67 24.70 28.79 28.34 Gov. securities & cash and balances with CBK/Total deposits 4.19 Gov. securities & cash and balances with CBK/Total deposits 25.66 28.39 25.08 27.94 27.89 Gov. securities & cash and balances with CBK/Total advances - Gov. securities & cash and balances with CBK/Total advances 28.93 34.69 29.94 34.26 36.36 Total advances/ Total deposits 22.62 Total advances/ Total deposits 102.81 94.38 84.99 77.62 75.62 Shareholders' funds/ Total deposits 98.77 Shareholders' funds/ Total deposits 32.07 25.88 21.80 19.44 20.74 Average Cost of Funds (COF) 0.69 Average Cost of Funds (COF) 7.69 9.46 8.45 7.05 6.65 Cost Income Ratio (CIR) 6,359.97 Cost Income Ratio (CIR) 126.50 95.66 82.37 74.05 83.26 Gross Non-Performing Loans/ Total loans & advances - Gross Non-Performing Loans/ Total loans & advances 23.77 20.13 15.41 18.25 14.51 Loans Loss Provisions/ Operating income - Loans Loss Provisions/ Operating income 82.64 60.59 42.02 45.08 31.17 Core capital/ Total deposit liabilities 98.62 Core capital/ Total deposit liabilities 27.31 22.44 18.51 17.04 18.31 Core capital/ Total risk weighted assets 69.95 Core capital/ Total risk weighted assets 21.75 19.55 18.60 18.91 22.62 Quick assets / Total liabilities 64.92 Quick assets / Total liabilities 37.85 38.52 36.66 42.06 41.34 Quick assets / Total deposit liabilities 67.79 Quick assets / Total deposit liabilities 47.76 46.47 40.75 44.62 43.96 266 BANKING SURVEY | 2018 BANKING SURVEY | 2018 267 INDIVIDUAL BANKS INDIVIDUAL BANKS Industry Aggregate Industry Aggregate 2017 2016 2015 2014 2013 LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) BALANCE SHEET (KSH IN MILLIONS) Total Assets 4,002,741 3,702,644 3,635,042 3,198,469 2,703,391 2017 2016 2015 Total Liabilities 3,358,550 3,110,104 3,083,379 2,697,017 2,271,213 82.64% Net Assets (Shareholders' Funds) 644,191 592,541 551,663 501,452 432,178 60.59% 45.08% 42.02% Customer Deposits 2,896,454 2,619,397 2,578,547 2,293,949 1,935,758 31.17% Other Deposits 126,430 123,271 143,909 118,021 103,901 Total Deposits 3,022,884 2,742,668 2,722,456 2,411,969 2,039,659 11.9 11.8 Loans and advances to customers (net of provisions) 2,265,763 2,183,186 2,190,395 1,884,416 1,531,382 2013 2014 2015 2016 2017 Total loans and advances to customers 2,411,298 2,298,945 2,267,848 1,945,143 1,577,705 8.3 Cash and balances with CBK 230,341 221,926 262,619 233,402 176,970 Kenya government securities 1,003,064 868,814 696,352 644,776 549,142 Placements with other banks 162,437 115,090 152,486 148,244 141,673 PROFIT AND LOSS ACCOUNT (KSH IN MILLIONS) 1.8 1.6 1.7 0.3 0.4 0.5 NON PERFORMING LOANS / TOTAL LOANS Income Interest on loans and advances 264,692 301,319 288,060 247,122 211,376 INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS Interest on government securities 102,786 89,814 69,616 62,328 56,750 ADVANCES INCOME Interest on placements and bank balances 4,818 5,857 10,574 5,171 5,342 20.13% 23.77% Other Interest Income 1,442 2,949 2,410 2,500 2,516 14.51% 18.25% 15.41% Total Interest Income 373,738 399,938 370,660 317,121 275,984 Net Interest Income 245,314 263,421 227,008 213,523 192,163 Foreign exchange gain (loss) 27,625 24,057 24,524 20,688 20,302 Fees and Commissions Income (net) 70,618 64,633 68,192 62,794 53,419 2013 2014 2015 2016 2017 Other operating Income 13,996 16,345 11,476 18,043 11,122 Total net operating income 357,786 368,750 331,199 315,047 277,006 Total income 486,300 505,341 474,851 418,645 360,827 Balance Sheet (KSh Billions) Expenses Interest on deposits 106,430 113,987 122,537 88,111 72,179 CORE CAPITAL/TOTAL DEPOSIT LIABILITY Interest on borrowed funds, deposits and placements from other banks 8,654 9,666 10,468 7,382 5,638 2017 2016 2015 Other interest expense 13,341 12,865 10,646 8,104 5,789 Total interest expense 128,425 136,518 143,652 103,598 83,821 General administrative expenses 119,765 114,848 107,952 100,902 92,485 27.31% Other operating expenses 63,064 63,552 59,187 55,567 47,033 22.44% 18.31% 18.51% 118.7 123.9 Total operating expenses 182,829 178,399 167,139 156,469 139,518 17.04% 111.9 Total expenditure 311,254 314,917 310,791 260,067 223,339 Operating profits before provisions 175,046 190,423 164,061 158,578 137,488 86.0 77.2 Losses on loans and advances 41,859 45,099 30,870 17,157 13,929 72.9 Profits Before Tax (after exceptional Items) 133,187 145,325 133,190 141,421 123,558 67.9 62.5 68.2 2013 2014 2015 2016 2017 DISCLOSURES (KSH IN MILLIONS) Total provisions (Loan loss provision and interest in suspense) 145,535 115,759 77,454 60,728 46,323 Non-performing loans Net of provisions & suspended interest 119,849 103,220 81,670 49,151 35,390 Total Non-performing loans (Net of interest in suspense) 221,030 186,861 136,066 91,766 67,808 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Realisable value of securities 110,786 98,766 76,708 45,854 31,876 Net NPL exposure 9,063 4,454 4,962 3,297 3,514 Total Insider Loans 99,188 101,632 104,550 87,087 75,566 Core Capital 547,880 504,955 474,664 431,691 359,409 Supplementary Capital 75,132 86,285 90,938 85,775 57,472 Total Capital 623,012 591,240 565,602 517,466 416,881 0.33% 0.26% -0.06% Quick Assets 1,395,842 1,205,829 1,111,458 1,026,422 867,785 -2.56% Total risk weighted assets 3,325,637 3,078,217 3,013,517 2,651,332 2,019,036 2013 2014 2015 2016 -3.35%2017 SELECTED PERFORMANCE RATIOS (IN %) Total liabilities/ Total assets 83.91 84.00 84.82 84.32 84.01 Profitability (KSh Billions) Shareholders' funds/ Total assets 16.09 16.00 15.18 15.68 15.99 Total income/ Total assets 12.15 13.65 13.06 13.09 13.35 2017 2016 2015 Net interest margin/ Total assets 6.13 7.11 6.24 6.68 7.11 Net advances/ Total assets 56.61 58.96 60.26 58.92 56.65 AVERAGE COST OF FUNDS Total deposits/ Total assets 75.52 74.07 74.89 75.41 75.45 Gov. securities & placement with other banks/Total assets 29.12 26.57 23.35 24.79 25.55 Gov. securities & cash and balances with CBK/Total deposits 30.81 29.46 26.38 27.46 26.86 8.88% Gov. securities & cash and balances with CBK/Total advances 41.60 37.79 30.71 33.15 34.81 8.30% 14.7 7.07% 7.67% 7.15% 14.6 Total advances/ Total deposits 79.77 83.82 83.30 80.65 77.35 Shareholders' funds/ Total deposits 21.31 21.60 20.26 20.79 21.19 10.4 9.5 9.3 Average Cost of Funds (COF) 3.61 4.20 4.53 3.70 3.62 8.4 8.3 7.2 Cost Income Ratio (CIR) 51.10 48.38 50.46 49.67 50.37 6.2 Gross Non-Performing Loans/ Total loans & advances 11.01 9.53 7.02 5.65 5.18 Loans Loss Provisions/ Operating income 28.28 21.63 16.05 13.20 11.55 (3.9) PBT (3.1) (0.1) TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Core capital/ Total deposit liabilities 18.12 18.41 17.44 17.90 17.62 INCOME EXPENSES INCOME Core capital/ Total risk weighted assets 16.47 16.40 15.75 16.28 17.80 2013 2014 2015 2016 2017 Quick assets / Total liabilities 41.56 2.11 2.16 2.80 2.82 Quick assets / Total deposit liabilities 46.18 2.40 2.45 3.13 3.14 268 BANKING SURVEY | 2018 BANKING SURVEY | 2018 269 INDIVIDUAL BANKS INDIVIDUAL MFIs IndividualINDIVIDUAL Data-MFIS DATA - MFIs FAULU 2017 2016 2015 2014 2013 Strategic Focus LOAN LOSS PROVISION / OPERATING INCOME Income & Expenses (KSh Billions) BALANCE SHEET AND PROFIT & LOSS ACCOUNT STATEMENT OF FINANCIAL POSITION ASSETS Faulu Microfinance Bank was founded 2017 2016 2015 Cash Balances (Both Local and Foreign) 297 298 276 297 480 in 1991 as an NGO by Food for the Short term deposits with banks 1,890 3,622 4,756 2,544 971 28.28% Hungry International(FHI), a Christian 21.63% Government securities 2,500 1,750 721 780 753 11.55% 13.20% 16.05% Advances to customers 16,958 17,954 16,584 14,488 8,724 organization whose main objective Due from related organisations 54 - - - - was to provide credit to lower income 301 288 2013 2014 2015 2016 2017 265 Other receivables 900 1,329 982 634 557 households and microenterprises in Deferred Tax 238 198 171 13 2 Nairobi. It received funding from various Other investment 1 1 - - - donors, among them the Department for Investment in associate companies 48 46 43 42 39 International Development(DFID)and the Intangible assets 1,020 329 267 156 178 NON PERFORMING LOANS / TOTAL LOANS 71 65 68 5 6 11 Property and equipment 1,418 1,842 1,524 1,366 730 United States Agency for International TOTAL ASSETS 25,325 27,369 25,324 20,319 12,433 Development(USAID). Faulu Kenya was INTEREST ON LOANS & FEES AND COMMISSIONS INTEREST ON DEPOSITS incorporated as a private company in ADVANCES INCOME LIABILITIES 1999 and in 2008, Faulu Microfinance Cash collaterals held 712 981 1,225 1,341 became the first MFI to be licensed by 11.01% Customer deposits 15,738 16,390 15,466 12,646 8,684 9.53% the Central Bank of Kenya. In 2014, Old 5.65% 7.02% Borrowings 3,572 4,387 2,671 1,339 2,090 5.18% Mutual acquired 67%shareholding in Deferred income - - - - 15 Deferred tax liability 135 73 58 69 - the company, giving it the controlling 2013 2014 2015 2016 2017 Due to related organisations 45 - - 1 stake in the Faulu Kenya and paving its Other liabilities 639 1,196 1,605 1,136 820 way to join Kenya’s lending fraternity. TOTAL LIABILITIES 20,840 23,027 21,024 16,533 11,636 Central Bank of Kenya, the banking Balance Sheet (KSh Billions) regulator, ranks faulu the second largest SHARE CAPITAL & RESERVES CORE CAPITAL/TOTAL DEPOSIT LIABILITY Deposit-Taking Microfinance(DTM)after Share capital 480 480 480 480 120 2017 2016 2015 Share premium 2,900 2,900 2,900 2,503 274 Kenya Women Finance Trust Faulu has a Retained earnings 294 248 237 257 58 network of 31 branches in 44 counties, 18.41% Revaluation reserve 260 212 213 205 104 serving over 400,000 customers. 17.90% 18.12% Statutory reserve 551 503 470 342 242 17.62% 17.44% TOTAL SHAREHOLDERS' FUNDS 4,485 4,342 4,299 3,787 797 4,003 Faulu’s performance increased in the year 3,703 3,635 TOTAL LIABILITIES AND EQUITY 25,325 27,369 25,324 20,320 12,433 2017 since the net profit increased by 2,896 STATEMENT OF COMPREHENSIVE 36% from KSh 505 million in 2016 to KSh 2,619 2,579 Income 2013 2014 2015 2016 2017 2,266 2,183 2,190 688 million in 2017.This may have been Interest on Loan Portfolio 3,566 3,753 3,227 2,753 1,624 attributed by decline in total expenses by Fees and Commission on Loan Portfolio 443 480 405 594 376 9%. Total assets declined by 7% from KSh Government Securities 321 173 85 79 55 27.3 billion in 2016 to KSh 25.3 billion in Deposit and Balances with Banks and Financial Institutions 160 295 536 364 102 RETURN ON AVERAGE ASSETS TOTAL ASSETS CUSTOMER DEPOSITS LOANS AND ADVANCES Other Investments - - - - - 2017.There was a 4% decline from KSh Other Operating Income 101 114 101 87 197 16.3 billion in 2016 to KSh 15.7 billion Non-Operating Income 4 4 1 5 8 in 2017.Advances to customers declined Total Income 4,595 4,818 4,355 3,882 2,361 by 6% from KSh 17.9 billion in 2016 to Expenses 5.70% 5.68% KSh 16.9 billion in 2017.Inteest on loan 4.97% 4.98% 4.20% Interest and Fee Expense on Deposits 1,457 1,760 1,387 919 378 portfolio declined by 5% from KSh 3.7 Other Fees and Commissions expense 114 172 200 163 101 Provision for Loan Impairment 232 188 165 132 70 billion in 2016 to KSh 3.5 billion in 2017. 2013 2014 2015 2016 2017 Staff Costs 1,032 1,038 1,048 1,057 606 Profitability (KSh Billions) Director’s Emoluments 15 18 12 8 8 Rental Charges 276 250 165 113 90 Depreciation Charges 158 170 125 81 80 Overview 2017 2016 2015 Amortization Charges 63 37 25 22 17 Date licensed 21.05.2009 AVERAGE COST OF FUNDS Other Administrative Expense 559 679 759 638 557 No. of Branches 65 Non-Operating Expense - - - - - Total Expenses 3,907 4,313 3,888 3,134 1,905 Chief Executive Officer Operating Profit 688 505 467 748 456 4.83% 400 Apollo N. Njoroge 374 371 358 369 4.04% 4.21% 331 Interest and Fee Expense on Borrowings(Finance Costs) 524 407 284 316 218 3.87% 3.75% Physical Location Faulu Kenya House, Ngong Lane -Off Ngong Road Profit/(Loss) before tax 163 98 183 432 238 Current Tax 69 55 67 133 72 133 145 133 128 137 144 Contacts Deferred Tax - - - - Net Profit After Taxes 94 43 115 299 166 P.O Box 60240-00200 City Square, Nairobi PROFIT BEFORE TAX TOTAL INTEREST TOTAL INTEREST TOTAL OPERATING Donations 59 Tel: +254 20 3877290 /3 /7; 3872183/4; 3867503 2013 2014 2015 2016 2017 INCOME EXPENSES INCOME Surplus on Revaluation of Building - - - 145 25 To Call Centre: 0711 074 074/0711 074 000. Deffered Tax on Revaluation Reserve (10) - - (44) (8) Email: [email protected] Total Comprehensive Income 143 43 115 401 183 Website: www.faulukenya.com Source: Bank Supervision Reports from Published Financial Statements 270 BANKING SURVEY | 2018 BANKING SURVEY | 2018 271 INDIVIDUAL MFIs INDIVIDUAL MFIs Individual Data-MFIS SMEP 2017 2016 2015 2014 2013 KWFT 2017 2016 2015 2014 2013 Strategic Focus BALANCE SHEET AND PROFIT & LOSS ACCOUNT Strategic Focus BALANCE SHEET AND PROFIT & LOSS ACCOUNT STATEMENT OF FINANCIAL POSITION STATEMENT OF FINANCIAL POSITION ASSETS ASSETS KWFT is the largest regulated female The firm begun operations as a relief arm Cash Balances (Both Local and Foreign) 2,755 2,180 2,748 2,148 1,032 Cash Balances (Both Local and Foreign) 24 162 161 77 71 oriented institution in Africa and the of the National Council of Churches of Short term deposits with banks 2,926 4,108 3,500 2,594 3,398 Short term deposits with banks 426 306 191 309 290 leading deposit taking microfinance Kenya (NCCK) in 1975 and has developed Government securities - 19 - 224 116 Government securities - - - - - over the years into a Microfinance Advances to customers 19,374 22,189 22,094 15,854 14,531 institution in Kenya, with over 60%of Advances to customers 1,677 1,677 1,728 1,635 1,799 Due from related organisations - - - - - the market share. The institution targets Due from related organisations - - - - - Bank in 2010 after becoming the third Other receivables 349 499 400 374 233 women with low incomes as an entry and Other receivables 92 61 63 45 71 institution in Kenya to be licensed by Deferred Tax 68 - 25 56 - Deferred Tax 183 184 212 251 241 contact point to their families, with the the Central Bank of Kenya as a DTM. In Other investment - - - - Other investment - - - - - objective of alleviating poverty through 2012, SMEP became the first MFI to be Investment in associate companies 1 1 1 1 - Investment in associate companies - - - - provision of innovative savings and granted approval by the Capital Markets Intangible assets 103 99 88 64 37 Intangible assets 34 33 23 12 12 Authority to raise capital through a Property and equipment 3,110 2,790 2,664 2,463 2,166 credits products tailored to meet their Property and equipment 386 392 401 271 248 private placement offer this enabled TOTAL ASSETS 28,931 32,153 31,861 26,895 21,753 needs. TOTAL ASSETS 2,734 2,659 2,592 2,406 2,490 it comply with the Central Bank of LIABILITIES LIABILITIES Kenya’s regulation capping the interests KWFT performance decline in 2017.Profit Cash collaterals held - - - - Cash collaterals held 44 12 - - 21 of a single shareholder in a banking before tax declined by 31% from KSh 1.4 Customer deposits 1,607 1,451 1,287 1,325 1,253 Customer deposits 16,374 17,156 17,806 17,119 12,954 institution to 25%. Borrowings 6,774 9,074 8,206 4,216 4,995 billion in 2016 to KSh 0.96 billion in 2017. Borrowings 522 599 576 410 511 Deferred income - - - - - Total assets declined by 10% from KSh Deferred income - - - - - Deferred tax liability - - - - 30 32.1 billion in 2016 to KSh 28.9 billion in Deferred tax liability - 20 32 12 17 On January 2018, SMEP said that it is set Due to related organisations 2 2 3 3 5 Due to related organisations - - 407 476 686 2017.Customer deposits declined by 5% to upgrade its banking system to enable Other liabilities 1,076 1,167 750 568 190 Other liabilities 58 41 48 85 32 from KSh 17.1 billion in 2016 to KSh 16.3 mobile phone-based lending. It will also TOTAL LIABILITIES 24,224 27,398 27,169 22,379 18,854 TOTAL LIABILITIES 2,232 2,126 1,947 1,835 1,838 billion in 2017.Advances to customers start lending money to M-Pesa agents so that they can buy float as it targets to SHARE CAPITAL & RESERVES declined by 13% from KSh 22.1 billion SHARE CAPITAL & RESERVES Share capital 186 186 186 186 146 in 2016 to KSh 19.3 billion in 2017.There Share capital 541 541 464 464 464 ease cash management for the agents. Share premium 2,851 2,851 2,851 2,851 1,558 was a decline of 2% on interest on loans Share premium 2 2 80 80 80 SMEP which currently has 18 banking Retained earnings (217) (184) (49) (36) 46 Retained earnings 1,404 1,435 1,339 1,326 992 and advances from KSh 6.2 billion to KSh branches and 22 marketing units’ Revaluation reserve 133 133 133 42 42 Revaluation reserve - - - - - 6.1 billion. countrywide plans to operationalize the Statutory reserve 42 40 18 22 20 Statutory reserve 266 284 316 243 201 mobile phone-based lending by June this TOTAL SHAREHOLDERS' FUNDS 4,707 4,756 4,692 4,606 2,897 TOTAL SHAREHOLDERS' FUNDS 501 533 645 571 652 year. T OTAL LIABILITIES AND EQUITY 28,931 32,153 31,861 26,985 21,752 TOTAL LIABILITIES AND EQUITY 2,734 2,659 2,592 2,406 2,490 STATEMENT OF COMPREHENSIVE STATEMENT OF COMPREHENSIVE The bank posted a loss of KSh 120 million Income Income in 2017 which is a 18% improvement Interest on Loan Portfolio 6,121 6,228 6,021 5,092 4,708 Interest on Loan Portfolio 430 420 478 530 477 from a loss of KSh 146 million. Total Fees and Commission on Loan Portfolio 582 708 697 865 853 Fees and Commission on Loan Portfolio 76 46 65 81 77 assets increased by 3% from KSh 2. Government Securities 4 1 2 34 8 Government Securities - - - - - Deposit and Balances with Banks and Financial Institutions 191 227 232 238 173 Deposit and Balances with Banks and Financial Institutions 15 22 6 23 46 Billion in 2016 to KSh 2.7 billion in 2017. Other Investments - - - - - Other Investments - - - - - Customer deposits increased by 11% from Other Operating Income 119 372 434 204 73 Other Operating Income 42 81 69 19 18 KSh 1.4 billion in 2016 to KSh 1.6 billion Non-Operating Income - - - - - Non-Operating Income - - - - in 2017.Advances to customers remained Total Income 7,017 7,536 7,386 6,433 5,814 Total Income 563 569 618 653 618 constant t KSh 1.6 billion. Interest on Expenses Expenses loan portfolio grew by 2% from KSh Interest and Fee Expense on Deposits 810 874 942 635 413 Interest and Fee Expense on Deposits 73 76 39 55 17 Other Fees and Commissions expense 99 130 51 71 56 Other Fees and Commissions expense - - - - - 420 million in 2016 to KSh 430 million in Provision for Loan Impairment 142 158 286 231 106 Provision for Loan Impairment 26 46 4 102 36 2017. Staff Costs 2,759 2,776 2,669 2,370 2,132 Staff Costs 258 246 227 262 229 Director’s Emoluments 109 112 91 84 73 Director’s Emoluments 12 11 10 10 9 Rental Charges 316 293 252 244 193 Rental Charges 86 78 67 61 47 Overview Depreciation Charges 392 382 353 312 255 Overview Depreciation Charges 24 27 29 25 12 Amortization Charges 14 12 8 6 5 Date licensed 14.12.2010 Amortization Charges 41 38 22 12 7 Date licensed 31.03.2010 Other Administrative Expense 123 168 201 205 170 No. of Branches Other Administrative Expense 1,386 1,392 1,466 1,333 1,266 No. of Branches 75 37 Non-Operating Expense - - - - - Non-Operating Expense 0 0 (0) 4 1 Chief Executive Officer Total Expenses 6,053 6,137 6,129 5,292 4,501 Managing Director Total Expenses 616 663 586 729 525 Operating Profit 964 1,399 1,257 1,141 1,313 Mr. James Mwangi Githaiga Operating Profit (54) (94) 33 (75) 93 Mr. Symon Kamore Physical Location Interest and Fee Expense on Borrowings(Finance Costs) 980 1,072 699 443 742 Physical Location Interest and Fee Expense on Borrowings(Finance Costs) (67) (52) (37) 42 65 Akira House, Kiambere Road, Upper Hill SMEP Building - Kirichwa Road, off Argwings Kodhek Profit/(Loss) before tax 37 324 558 697 571 Profit/(Loss) before tax (120) (146) (4) (117) 27 Road Contacts Current Tax 18 73 172 251 201 Current Tax - - - (3) 8 P.O. Box 4179 – 00506 Nyayo Stadium, Nairobi Contacts Deferred Tax 1 28 (8) (11) (23) Deferred Tax (88) (12) (3) (33) 13 P.O Box 64063-00620 Nairobi, Kenya Net Profit After Taxes 19 224 394 456 392 24 hrs Customer Service: 0703 067 700 Net Profit After Taxes (32) (134) (1) (81) 6 Tel: +25420 2673327/20 2055761/20 3572799 Donations - - 1 18 4 Pilot Line: 0703 067 000 Donations - - - - Surplus on Revaluation of Building - - Airtel: 0730 167 000 Surplus on Revaluation of Building - - 130 60 Mobile: +254711 606900 Deffered Tax on Revaluation Reserve - - (39) (18) Deffered Tax on Revaluation Reserve - - Email: [email protected] Email: [email protected] Total Comprehensive Income (32) (134) 90 (81) 48 Total Comprehensive Income 19 224 395 474 396 Website: www.kwftbank.com Website: smep.co.ke Source: Bank Supervision Reports from Published Financial Statements Source: Bank Supervision Reports from Published Financial Statements 272 BANKING SURVEY | 2018 BANKING SURVEY | 2018 273 INDIVIDUAL MFIs INDIVIDUAL MFIs Individual Data-MFIS REMU 2017 2016 2015 2014 2013 Strategic Focus RAFIKI 2017 2016 2015 2014 2013 BALANCE SHEET AND PROFIT & LOSS ACCOUNT BALANCE SHEET AND PROFIT & LOSS ACCOUNT Strategic Focus STATEMENT OF FINANCIAL POSITION STATEMENT OF FINANCIAL POSITION ASSETS REMU DTM Limited was initially ASSETS Rafiki Microfinance Bank (RMB), a Cash Balances (Both Local and Foreign) 25 26 28 17 12 Cash Balances (Both Local and Foreign) 875 519 207 212 incorporated as a credit institution, TAA nationwide deposit taking institution is Short term deposits with banks 43 37 60 150 132 Short term deposits with banks 2,092 2,254 1,318 965 MFI Ltd in June 2007 before obtaining a subsidiary of ChaseBank and regulated Government securities - - - - - Government securities - - - - Advances to customers 218 244 257 184 161 approval from the Central Bank of Kenya Advances to customers 3,661 4,270 3,418 1,866 by Central Bank of Kenya. It was Due from related organisations - - - - to operate as a micro finance Bank in Due from related organisations 17 84 402 - conceptualized in 2009 as a business, Other receivables 26 17 17 14 10 March 2009. Fusion Capital acquired a Other receivables 227 366 362 209 registered in 2010 and launched its Deferred Tax 26 18 13 7 6 25% stake in the firm in March 2013. Deferred Tax 196 34 14 9 operations unKenyan market in 2011. Other investment 1 2 3 3 4 Remu, whose main target market is Other investment - - - Investment in associate companies - - - - - Investment in associate companies - - - SME lending, currently has branches in Intangible assets 2 2 3 4 2 Intangible assets 24 29 22 20 Rafiki did not publish its 2017 financial Nairobi, Meru and Maua. Property and equipment 13 14 16 14 10 Property and equipment 223 161 214 401 statements as per CBK regulations, but TOTAL ASSETS 354 362 397 394 336 TOTAL ASSETS 7,327 7,729 5,975 3,682 according the statements posted on its The bank performance declined in 2017 website, Rafiki’s performance declined LIABILITIES LIABILITIES since it made a further loss of KSh 17 in 2017 since it made a loss of KSh 461 Cash collaterals held 11 17 14 8 9 Cash collaterals held 3 3 4 7 million from a loss of KSh 9 million in million from KSh 46 million in 2016. Total Customer deposits 113 88 144 166 174 Customer deposits 2,982 4,188 2,873 1,412 Borrowings 52 67 40 5 16 2016. Total assets declined by 2% to KSh Borrowings 876 965 958 754 assets declined by 5% to KSh 7.7 billion Deferred income - - - - - 354 million in 2017 to KSh 362 million in Deferred income - 579 523 568 in 2016 from KSh 7.3 billion recorded Deferred tax liability - - - - - 2016.Customer deposits increased by 28% Deferred tax liability - - - 9 in 2016. Customer deposits declined by Due to related organisations - - - - - from KSh 88 million in 2016 to KSh 113 Due to related organisations 943 839 489 364 28% from KSh 4.1 billion recorded in Other liabilities 11 6 3 6 5 Other liabilities 642 110 116 73 million in 2017.Advances to customers 2016 to KSh 2.9 billion recorded in 2017. TOTAL LIABILITIES 187 179 202 186 204 TOTAL LIABILITIES 6,581 6,686 4,962 3,187 declined by 11% from KSh 244 million in Advances to customers declined by 14% SHARE CAPITAL & RESERVES 2016 to KSh 218 million in 2017.Interest SHARE CAPITAL & RESERVES from KSh 4.2 billion recorded in 2016 to Share capital 223 223 222 222 158 on loan portfolio decrease d by 15% from Share capital 1,000 1,000 1,000 500 KSh 3.6 billion recorded in 2017. Interest Share premium 16 16 16 14 6 KSh 61 million in 2016 to KSh 51 million Share premium - - - - on loan portfolio increased by 5% from Retained earnings (79) (61) (47) (31) (33) in 2017. Retained earnings (285) (38) (34) (34) KSh 874 million recorded in 2016 to KSh Revaluation reserve 0 0 0 0 0 Revaluation reserve - - - 922 recorded in 2017. Statutory reserve 7 6 4 2 1 Statutory reserve 31 81 47 27 TOTAL SHAREHOLDERS' FUNDS 167 184 195 208 133 TOTAL SHAREHOLDERS' FUNDS 745 1,043 1,013 493 TOTAL LIABILITIES AND EQUITY 354 362 397 394 336 TOTAL LIABILITIES AND EQUITY 7,327 7,729 5,975 3,680 STATEMENT OF COMPREHENSIVE STATEMENT OF COMPREHENSIVE Income Income Interest on Loan Portfolio 51 61 51 42 27 Interest on Loan Portfolio 922 874 605 304 Fees and Commission on Loan Portfolio 7 8 12 8 8 Fees and Commission on Loan Portfolio 86 132 86 52 Government Securities - - - - - Government Securities - - - - Deposit and Balances with Banks and Financial Institutions 5 6 9 13 9 Deposit and Balances with Banks and Financial Institutions 115 251 131 111 Other Investments 0 0 0 0 1 Other Investments - - - - Other Operating Income 5 5 3 4 2 Other Operating Income 96 132 148 78 Non-Operating Income - - - - Non-Operating Income - - 0 9 Total Income 69 80 76 68 46 Total Income 1,218 1,390 970 554 Expenses Expenses Interest and Fee Expense on Deposits 7 11 14 11 9 Interest and Fee Expense on Deposits 329 231 133 49 Other Fees and Commissions expense 2 5 3 2 2 Other Fees and Commissions expense 8 13 24 16 Provision for Loan Impairment 5 7 7 2 1 Provision for Loan Impairment 238 83 38 24 Staff Costs 40 34 41 29 22 Staff Costs 432 406 300 168 Director’s Emoluments 1 2 0 - Director’s Emoluments - 1 1 1 Overview Rental Charges 9 9 8 6 5 Rental Charges 105 105 109 52 Depreciation Charges 2 3 3 2 2 Date licensed 31.12.2010 Depreciation Charges 31 11 6 25 Overview Amortization Charges 1 1 1 1 1 No. of Branches 3 Amortization Charges 9 7 6 4 Other Administrative Expense 19 18 20 13 12 Other Administrative Expense 396 373 242 119 Date licensed 14-06-2011 Non-Operating Expense - - - - Chief Executive Officer Non-Operating Expense - - - No. of Branches 18 Total Expenses 86 88 97 65 53 Mr. David Irungu Total Expenses 1,548 1,229 858 458 Operating Profit (17) (9) (21) 4 (7) Operating Profit (330) 161 112 96 Managing Director Physical Location Ken Obimbo Interest and Fee Expense on Borrowings(Finance Costs) 8 8 0 1 Finance House, 14th floor, Loita Street Interest and Fee Expense on Borrowings(Finance Costs) 131 115 93 82 Physical Location Profit/(Loss) before tax (25) (17) (21) 2 (7) Contacts Profit/(Loss) before tax (461) 46 19 14 Rafiki House, Biashara Street Nairobi Current Tax - - - - Current Tax - (17) 16 6 P. O. Box 20833 - 00100 Nairobi Contacts Deferred Tax 7 5 6 (1) (2) Deferred Tax 163 - 18 - Telephone: 2214483 / 2215384 / 2215387/8/9, Net Profit After Taxes (17) (12) (15) 3 (6) Net Profit After Taxes (298) 29 21 8 P.O. Box 12755-00400 2631070, 2215380, 2215384/5/7/8/9, 0733554555 Donations - - - - Donations - - - - Telephone: 0711 073 000 Surplus on Revaluation of Building - - - - Email: [email protected] Surplus on Revaluation of Building - - - - Mobile:0730 170 000 Deffered Tax on Revaluation Reserve - - - - Website: www.remultd.co.ke Deffered Tax on Revaluation Reserve - - - - Email: [email protected] Total Comprehensive Income (17) (12) (15) 3 (6) Total Comprehensive Income (298) 29 21 8 Website: www.rafikibank.co.ke Source: Bank Supervision Reports from Published Financial Statements Source: Bank Supervision Reports from Published Financial Statements 274 BANKING SURVEY | 2018 BANKING SURVEY | 2018 275 INDIVIDUAL MFIs INDIVIDUAL MFIs Individual Data-MFIS SUMAC 2017 2016 2015 2014 2013 UWEZO 2017 2016 2015 2014 2013 BALANCE SHEET AND PROFIT & LOSS ACCOUNT Strategic Focus BALANCE SHEET AND PROFIT & LOSS ACCOUNT Strategic Focus STATEMENT OF FINANCIAL POSITION STATEMENT OF FINANCIAL POSITION ASSETS ASSETS Sumac began as an investment club Uwezo microfinance bank was the third Cash Balances (Both Local and Foreign) 234 66 60 31 24 Cash Balances (Both Local and Foreign) 46 13 97 10 1 in 2002 by 15 shareholders. This later firm to be licensed by the Central Bank Short term deposits with banks - - - - - Short term deposits with banks - - - - 9 developed into credit institution, Sumac Government securities - - - - - Government securities - - - - - of Kenya to carry out the community Advances to customers 623 538 458 289 204 Microfinance Bank Ltd which started Advances to customers 126 166 97 125 73 deposit taking microfinance business. It Due from related organisations 6 6 6 8 6 operations in 2004 and in 2011, the Due from related organisations - - - - - was started in 2007 in response to the Other receivables 158 86 47 12 20 firm was granted a license to become a Other receivables 6 12 10 6 6 Vision 2030 goal of facilitating economic Deferred Tax 9 10 5 5 5 Deferred Tax 5 3 3 4 4 Deposit Taking Microfinance. The DTM’s growth through community financial Other investment 0 0 0 0 0 Other investment - - - - 0 head office and two branches are all inclusion. Investment in associate companies - - - - - Investment in associate companies - - - - - located in Nairobi. Intangible assets 81 33 5 6 7 Intangible assets 8 5 3 7 3 Property and equipment 26 65 52 40 42 Property and equipment 21 16 17 8 10 The bank performance declined in 2017 TOTAL ASSETS 1,137 803 634 390 307 The bank performance decline in 2017. TOTAL ASSETS 212 214 226 160 106 since it made a loss of KSh 12 million in Profit before tax declined by 44% from 2016 from a profit of KSh 3 million. Total LIABILITIES LIABILITIES KSh 18 million 2016 to KSh 10 million assets slightly decreased by 1% from KSh Cash collaterals held - - - - - Cash collaterals held - - - - - in 2017.Total assets increased by 42% Customer deposits 413 233 135 128 99 Customer deposits 29 29 42 64 32 214 million in 2016 to KSh 212 million Borrowings 395 227 144 68 8 from KSh 0.8 billion in 2016 from KSh Borrowings - - - 11 5 in 2017.Customer deposits remained Deferred income - - - - - 1.1 billion 2017. Advances to customers Deferred income - - - - - constant at KSh 29 million in 2017. Deferred tax liability - - - increased by 16% from KSh 538 million Deferred tax liability - - - - - Advances to customer declined by 24% Due to related organisations - - - Due to related organisations - - - - - in 2016 to KSh 623 million in 2017. from KSh 166 million in 2016 to KSh 126 Other liabilities 78 96 147 6 17 Other liabilities 13 7 5 3 3 Customer deposits increased by 77% million in 2017.Interest on loan portfolio TOTAL LIABILITIES 886 557 426 202 124 TOTAL LIABILITIES 42 36 47 78 40 from KSh 233million in 2016 to KSh 413 declined by 37% from KSh 40 million in SHARE CAPITAL & RESERVES million in 2017.Interest on loan portfolio SHARE CAPITAL & RESERVES 2016 to KSh 25 million in 2017. Share capital 163 163 155 151 149 increased by 14% from KSh 187 million in Share capital 197 197 184 99 83 Share premium 61 61 44 36 33 2016 to KSh 214 million in 2017. Share premium - - 12 - - Retained earnings 27 23 8 1 (3) Retained earnings (28) (19) (17) (17) (17) Revaluation reserve - - - 3 Revaluation reserve - - - - 0 Statutory reserve - - - - Statutory reserve - - - - - TOTAL SHAREHOLDERS' FUNDS 251 246 207 188 182 TOTAL SHAREHOLDERS' FUNDS 169 179 180 82 67 TOTAL LIABILITIES AND EQUITY 1,137 803 634 390 307 TOTAL LIABILITIES AND EQUITY 212 214 226 160 106 STATEMENT OF COMPREHENSIVE STATEMENT OF COMPREHENSIVE Income Income Interest on Loan Portfolio 214 187 120 84 56 Interest on Loan Portfolio 25 40 40 25 19 Fees and Commission on Loan Portfolio 15 11 13 18 22 Fees and Commission on Loan Portfolio 20 16 9 10 4 Government Securities - - - Government Securities - - - - Deposit and Balances with Banks and Financial Institutions 1 1 1 0 Deposit and Balances with Banks and Financial Institutions - - - 0 Other Investments - - - - Other Investments - - 1 - Other Operating Income 2 2 2 4 2 Other Operating Income 0 0 - 1 Non-Operating Income - - 1 Non-Operating Income - - - 1 - Total Income 232 201 136 107 80 Total Income 46 56 50 37 23 Expenses Expenses Interest and Fee Expense on Deposits 45 30 30 20 0 Interest and Fee Expense on Deposits 1 0 4 3 1 Other Fees and Commissions expense 8 6 14 2 2 Other Fees and Commissions expense - - - - 0 Provision for Loan Impairment 4 13 6 6 12 Provision for Loan Impairment 3 8 6 0 (0) Staff Costs 31 27 16 14 12 Staff Costs 24 17 18 15 14 Director’s Emoluments 4 4 5 4 3 Director’s Emoluments 1 1 0 1 1 Rental Charges 12 12 8 6 7 Rental Charges 7 5 4 3 2 Depreciation Charges 10 9 6 6 7 Depreciation Charges 4 4 2 2 1 Overview Overview Amortization Charges 7 6 2 2 2 Amortization Charges 1 2 2 2 1 Date licensed 29.10.2012 Date licensed 08.11.2010 Other Administrative Expense 46 37 27 35 35 Other Administrative Expense 17 17 11 9 6 Non-Operating Expense - - - - - No. of Branches 2 Non-Operating Expense - - - - 0 No. of Branches 3 Total Expenses 167 144 113 95 81 Total Expenses 58 53 48 35 27 Chief Executive Officer Chief Executive Officer Operating Profit 65 57 24 12 (1) Operating Profit (12) 3 2 2 (4) John Kamau Njihia Wilson Nguyo Interest and Fee Expense on Borrowings(Finance Costs) 54 39 11 8 15 Interest and Fee Expense on Borrowings(Finance Costs) - - - - Physical Location Physical Location Park Plaza Building, Ground Floor, Moktar Daddah Profit/(Loss) before tax 10 18 13 4 (16) Consolidated Bank House 2nd Floor, Koinange Street Profit/(Loss) before tax (12) 3 2 2 (4) Current Tax 5 4 Current Tax - - 1 1 Street Contacts Deferred Tax - - 6 0 (5) Deferred Tax 3 1 - (1) Net Profit After Taxes 5 14 - 4 (11) Postal Address: P. O. Box 11687-00100, Nairobi Net Profit After Taxes (9) 4 0 1 (3) Contacts Donations - - Telephone: (254) 20 2212587, 20 2210440 Fax: (254) Donations - - - P.O. Box 1654-00100 Nairobi Surplus on Revaluation of Building - - 2210430 Surplus on Revaluation of Building - - - Telephone: 2212917 / 9, 0720350808, 0733350808- Deffered Tax on Revaluation Reserve - - Email: [email protected] Deffered Tax on Revaluation Reserve - - - Email: [email protected] Total Comprehensive Income 5 14 7 4 (11) Website: www.sumacdtm.co.ke Total Comprehensive Income (9) 4 0 1 (3) Website: www.uwezodtm.com Source: Bank Supervision Reports from Published Financial Statements Source: Bank Supervision Reports from Published Financial Statements 276 BANKING SURVEY | 2018 BANKING SURVEY | 2018 277 INDIVIDUAL MFIs INDIVIDUAL MFIs Individual Data-MFIS U&I 2017 2016 2015 2014 2013 DARAJA 2017 2016 2015 2014 2013 BALANCE SHEET AND PROFIT & LOSS ACCOUNT Strategic Focus BALANCE SHEET AND PROFIT & LOSS ACCOUNT Strategic Focus STATEMENT OF FINANCIAL POSITION STATEMENT OF FINANCIAL POSITION ASSETS ASSETS U&I, a wholly-owned Kenyan company, Daraja Microfinance Bank was conceived Cash Balances (Both Local and Foreign) 41 56 28 30 9 Cash Balances (Both Local and Foreign) 23 33 6 64 is the second Community DTM to be in August 2008 during the Investment Cell Short term deposits with banks - - - 11 12 Short term deposits with banks - 27 - - licensed under the Microfinance Act. Government securities - - - - 13 Government securities - - - - Ltd’s strategy retreat. Investment Cell Ltd Advances to customers 325 271 142 84 36 Its primary focus is the Micro and Small Advances to customers 53 51 36 - is an investment club founded by friends Due from related organisations 0 2 2 2 1 Enterprises (MSEs), and the financially Due from related organisations - - - - that met at the Rotary Club of Lang’ata. Other receivables 19 2 2 2 2 excluded populations. It has one branch Other receivables 18 11 3 1 They launched a capital call two years later Deferred Tax 0 2 2 1 1 in Nairobi. Deferred Tax 45 32 15 5 in 2010 and invited friends and associates Other investment - - - - - Other investment - - - - who included Investment Cell shareholders Investment in associate companies - - - - - Investment in associate companies - - - - Intangible assets 3 5 1 2 - The performance of U&I increased by Intangible assets 12 13 10 6 and members of the Rotary Club of Lang’ata. Property and equipment 16 14 8 6 6 27% from a profit of KSh 12 million in Property and equipment 16 13 15 16 Daraja Microfinance Bank was licensed by TOTAL ASSETS 406 351 184 137 80 2016 to KSh 16 million in 2017.Total TOTAL ASSETS 168 180 83 92 the Central Bank of Kenya in February 2015 assets increased by 15% from KSh 351 to operate in Dagoretti Division and its LIABILITIES LIABILITIES million in 2016 to KSh 406 million in environs. The Bank provides both savings and Cash collaterals held 1 5 10 16 Cash collaterals held - - - 2017.Customer deposit slightly declined credit retail products. It mainly targets micro Customer deposits 198 205 48 36 34 Customer deposits 95 85 - and small businesses, chamas and salaried Borrowings 39 19 18 - - by 3% from KSh 205 million in 2016 to Borrowings - - 14 Deferred income - - - - - KSh 198 million in 2017.Advances to Deferred income - - staff, with the underlying goal being to help Deferred tax liability - - - - - customers grew by 20% from KSh 271 Deferred tax liability - - both individuals and groups achieve their Due to related organisations - - - - - million in 2016 to KSh 325 million in Due to related organisations - - financial goals. Other liabilities 5 5 2 2 1 Other liabilities 20 13 3 1 2017.Interest on loan portfolio grew by TOTAL LIABILITIES 244 233 78 55 35 TOTAL LIABILITIES 115 98 16 1 44% from KSh 53 million in 2016 to KSh The bank performance declined in the year SHARE CAPITAL & RESERVES 76 million in 2017. SHARE CAPITAL & RESERVES 2017 since it made further losses from KSh Share capital 138 105 97 80 45 Share capital 136 120 96 96 45 million in 2016 to KSh 60 million in 2017. Share premium - - - - - Share premium 27 27 8 8 Total assets declined by 7% from KSh 180 Retained earnings 23 13 9 220 0 Retained earnings (112) (65) (37) (12) million in 2016 to KSh 168 million in 2017. Revaluation reserve - - - - Revaluation reserve - - - - There was an increase in customer deposits Statutory reserve - - - - Statutory reserve 1 1 1 - TOTAL SHAREHOLDERS' FUNDS 162 118 107 83 45 TOTAL SHAREHOLDERS' FUNDS 52 82 67 91 by 12% from KSh 85 million in 2016 to KSh 95 million in 2017.Interest on loan portfolio TOTAL LIABILITIES AND EQUITY 406 351 184 137 80 TOTAL LIABILITIES AND EQUITY 168 180 83 92 increased by 31% from KSh 10 million in STATEMENT OF COMPREHENSIVE STATEMENT OF COMPREHENSIVE 2016 to KSh 13 million in 2017.Advances Income Income to customers increased by 4% from KSh 51 Interest on Loan Portfolio 76 53 31 17 9 Interest on Loan Portfolio 13 10 2 - million in 2016 to KSh 53 million in 2017. Fees and Commission on Loan Portfolio 12 12 9 8 4 Fees and Commission on Loan Portfolio 4 1 1 - Government Securities - - 1 2 Government Securities - - - - Deposit and Balances with Banks and Financial Institutions - - Deposit and Balances with Banks and Financial Institutions 2 3 4 8 Other Investments - - Other Investments - - - - Other Operating Income - - Other Operating Income 2 3 1 - Non-Operating Income 13 1 1 1 1 Non-Operating Income - - - - Total Income 102 66 42 27 16 Total Income 20 17 8 8 Expenses Expenses Interest and Fee Expense on Deposits 19 11 2 0 - Interest and Fee Expense on Deposits 9 4 - - Other Fees and Commissions expense - - - - - Other Fees and Commissions expense - - - - Provision for Loan Impairment 2 2 3 2 1 Provision for Loan Impairment 6 5 0 - Staff Costs 20 13 9 8 5 Staff Costs 30 22 15 6 Director’s Emoluments 2 2 1 1 - Director’s Emoluments 4 3 1 1 Rental Charges 5 4 2 2 2 Rental Charges 3 4 2 3 Depreciation Charges 3 2 2 1 1 Overview Depreciation Charges 3 3 3 4 Overview Amortization Charges 2 2 0 0 - Date licensed 08.04.2013 Amortization Charges 4 3 3 2 Date licensed 12.01.2015 Other Administrative Expense 21 9 8 8 4 Other Administrative Expense 22 18 18 9 No. of Branches Non-Operating Expense 6 6 3 2 1 Non-Operating Expense - - - - No. of Branches Total Expenses 80 50 30 23 14 Chief Executive Officer Total Expenses 80 63 43 25 Operating Profit 22 16 11 3 2 Chief Executive Officer Simon N. Ngigi Operating Profit (60) (45) (35) (16) Silas Karuku Interest and Fee Expense on Borrowings(Finance Costs) 6 4 2 - - Physical Location Interest and Fee Expense on Borrowings(Finance Costs) - - - - Physical Location Asili Complex Building 1st Floor, River Road Profit/(Loss) before tax 16 12 9 3 2 Profit/(Loss) before tax (60) (45) (34) (16) Karandini Road, off Naivasha Road Current Tax (3) (5) (3) 2 Contacts Current Tax - - - - Contacts Deferred Tax (2) (0) 1 1 1 Postal Address: P.O. Box 15825 – 00100, Nairobi Deferred Tax 13 17 10 5 Net Profit After Taxes 11 7 7 2 2 P.O. Box 100854 – 00101, Jamia, Nairobi Telephone: (254) 020 2367288, 0713 112 791 Net Profit After Taxes 47 (28) (24) (12) Donations - - - - Donations - - - - Telephone: 020-3879995 / 0733 988888/0707 Fax: (254) 2210430 Surplus on Revaluation of Building - - - - Surplus on Revaluation of Building - - - - 444888 / 0718 444888 Email: [email protected] Deffered Tax on Revaluation Reserve - - - - Deffered Tax on Revaluation Reserve - - - - Email: [email protected] Total Comprehensive Income 11 7 7 2 2 Website: http://uni-microfinance.co.ke/uni-microfinance/ Total Comprehensive Income (47) (28) (24) (11) Website: www.darajabank.co.ke Source: Bank Supervision Reports from Published Financial Statements Source: Bank Supervision Reports from Published Financial Statements 278 BANKING SURVEY | 2018 BANKING SURVEY | 2018 279 INDIVIDUAL MFIs INDIVIDUAL MFIs Individual Data-MFIS CARITAS 2017 2016 2015 2014 2013 MAISHA 2017 2016 2015 2014 2013 BALANCE SHEET AND PROFIT & LOSS ACCOUNT Strategic Focus BALANCE SHEET AND PROFIT & LOSS ACCOUNT Strategic Focus STATEMENT OF FINANCIAL POSITION STATEMENT OF FINANCIAL POSITION ASSETS Caritas micro finance bank is the ASSETS Cash Balances (Both Local and Foreign) 8 53 4 3 Maisha MFB is a Kenyan owned company culmination of a three decades old Cash Balances (Both Local and Foreign) 24 7 Short term deposits with banks 418 297 125 53 limited by shares. The Microfinance Bank program me of providing microfinance Short term deposits with banks 33 70 Government securities - - - - offers comprehensive Insurance Premium Government securities - - Advances to customers 351 141 11 - solutions by the Archdiocese of Nairobi , Advances to customers 156 27 Financing (IPF) products as value- Due from related organisations - - - - using the self help group approach . The Due from related organisations - - add alongside other Micro Small and Other receivables 43 17 5 0 MFI became the twelfth microfinance Other receivables 25 7 Medium Enterprises (MSMEs) financing Deferred Tax - - - bank after it was granted a licensed to Deferred Tax 24 15 Other investment - - - products. Maisha MFB becomes the 13th operate by the Central Bank of Kenya Other investment - - Investment in associate companies - - - microfinance bank to be licensed bank in June 2015.On April,2017 Caritas MFB Investment in associate companies 3 - Intangible assets 12 12 13 - after it was granted a license to operate Intangible assets 10 12 Property and equipment 47 55 28 12 launched operations with a capital Property and equipment 29 31 by the Central Bank of Kenya in June TOTAL ASSETS 879 574 186 69 of Sh500 million. Executives speaking TOTAL ASSETS 302 171 2016. during its official launch said that the LIABILITIES micro lender will leverage on the massive LIABILITIES Cash collaterals held 2 1 8 On September 2017, Maisha Microfinance church membership network to drive Cash collaterals held - - Customer deposits 564 286 78 Bank in partnership with Airtel rolled out growth besides roping in additional Customer deposits 231 78 Borrowings 20 - - Borrowings - - a mobile money savings and loan product Deferred income - - - customers dissatisfied with existing Deferred income - - targeting registered Airtel Money Deferred tax liability - - - banks. Deferred tax liability - - subscribers. This makes them become Due to related organisations - - - Due to related organisations - - Other liabilities 20 16 13 1 the first telco-backed microfinance to Total assets increased by 53% from KSh Other liabilities 5 4 TOTAL LIABILITIES 605 303 98 1 launch a savings and mobile money 574 million in 2016 to KSh 874 million in TOTAL LIABILITIES 236 82 solution in the market and the fourth SHARE CAPITAL & RESERVES 2017.Customer deposits increased by 97% SHARE CAPITAL & RESERVES financial institution, alongside banks like Share capital 500 427 170 90 from KSh 286 million in 2016 to KSh 564 Share capital 120 90 Commercial Bank of Africa (CBA ) , Kenya Share premium - - - - million in 2017.Advaces to customers also Share premium 20 30 Commercial Bank (KCB) and Equity. Retained earnings (227) (156) (82) (22) increased by 149% from KSh141 million Retained earnings 73 (31) Revaluation reserve - - - - After the launch it enrolled 50,000 new in 2016 to KSh 351 in 2017 Interest on Revaluation reserve - - Statutory reserve - - - - members and disbursed 20,000 loans loans portfolio grew by 384% from KSh 7 Statutory reserve - - TOTAL SHAREHOLDERS' FUNDS 273 271 88 68 through a mobile loans platform M-Fanisi million in 2016 to KSh 34 million in 2017. TOTAL SHAREHOLDERS' FUNDS 67 89 which received 2,000 loan applications TOTAL LIABILITIES AND EQUITY 879 574 186 69 TOTAL LIABILITIES AND EQUITY 302 171 daily during the 45-day pilot period. STATEMENT OF COMPREHENSIVE The performance of the bank declined in STATEMENT OF COMPREHENSIVE Income 2017 since it made a further loss of KSh Income Interest on Loan Portfolio 34 7 0 - The bank performance decline in 2017 Interest on Loan Portfolio 29 2 Fees and Commission on Loan Portfolio 9 3 0 - 71 million as compared to a loss of KSh 74 Fees and Commission on Loan Portfolio 3 1 since it made further loss of KSh 50 Government Securities - - - - million that was recorded in 2016. Government Securities - - million in 2017 from a loss of KSh 47 Deposit and Balances with Banks and Financial Institutions 39 26 10 5 Deposit and Balances with Banks and Financial Institutions 4 7 million in 2016. Total assets increased by Other Investments - - - - Other Investments - - 77% from KSh 171 million in 2016 to KSh Other Operating Income 5 2 0 - Other Operating Income 0 - Non-Operating Income - - - - 302 million in 2017.Customer deposits Non-Operating Income - - Total Income 88 38 10 5 increased by 196% from KSh 78 million in Total Income 37 10 Expenses Expenses 2016 to KSh 231 million in 2017.Advances Interest and Fee Expense on Deposits 17 9 1 - Interest and Fee Expense on Deposits 12 2 to customers increased by 472% from KSh Other Fees and Commissions expense - 0 0 - Other Fees and Commissions expense - 0 27 million in 2016 to KSh 156 million in Provision for Loan Impairment 5 2 0 - Provision for Loan Impairment 8 1 2017.Interest on loans portfolio increased Staff Costs 53 37 24 7 Staff Costs 28 26 Director’s Emoluments 5 4 1 1 by 1367% from KSh 2 million kin 2016 to Director’s Emoluments 2 1 Rental Charges 19 17 9 9 KSh 29 million in 2017. Rental Charges 4 4 Depreciation Charges 15 10 4 - Depreciation Charges 5 3 Amortization Charges 3 6 3 - Overview Overview Amortization Charges 3 2 Other Administrative Expense 42 25 28 10 Date licensed 02.06.2015 Date licensed Other Administrative Expense 26 17 Non-Operating Expense - - 0 - No. of Branches Non-Operating Expense - - No. of Branches Total Expenses 158 112 70 27 Total Expenses 87 56 Operating Profit (70) (73) (59) (22) Chief Executive Officer Chief Executive Officer Operating Profit (50) (47) George Maina Mr. Ireneus Gichana Interest and Fee Expense on Borrowings(Finance Costs) 1 0 0 0 Interest and Fee Expense on Borrowings(Finance Costs) - - Physical Location Physical Location Profit/(Loss) before tax (71) (74) (60) (22) Chester House 2nd Floor, Koinange Street Cardinal Maurice Otunga Plaza, Kaunda Street Profit/(Loss) before tax (50) (47) Current Tax - - - - Current Tax - - Deferred Tax - (0) 0 - Contacts Deferred Tax 8 15 Net Profit After Taxes (71) (74) (60) (22) Contacts Net Profit After Taxes (42) (31) P.O Box 49316-00100, Nairobi Donations - - - - P.O. Box 15352 - 00100, Nairobi, Kenya Donations - - Tel: 020 222 0648/ 0736 028 982/ 0792 002 300 Surplus on Revaluation of Building - - - - Telephone: 020-5151500 Surplus on Revaluation of Building - - Email: [email protected] Deffered Tax on Revaluation Reserve - - - - Email: [email protected] Deffered Tax on Revaluation Reserve - - Website: www.maishabank.com Total Comprehensive Income (71) (74) (60) (22) Website: www.caritas-mfb.co.ke Total Comprehensive Income (42) (31) Source: Bank Supervision Reports from Published Financial Statements Source: Bank Supervision Reports from Published Financial Statements 280 BANKING SURVEY | 2018 BANKING SURVEY | 2018 281 INDIVIDUAL MFIs INDIVIDUAL MFIs Individual Data-MFIS CENTURY 2017 2016 2015 2014 2013 CHOICE 2017 2016 2015 2014 2013 BALANCE SHEET AND PROFIT & LOSS ACCOUNT Strategic Focus BALANCE SHEET AND PROFIT & LOSS ACCOUNT Strategic Focus STATEMENT OF FINANCIAL POSITION STATEMENT OF FINANCIAL POSITION ASSETS ASSETS Century Microfinance Bank Limited Choice Microfinance Bank started as Cash Balances (Both Local and Foreign) 2 4 31 22 9 Cash Balances (Both Local and Foreign) 1 21 4 (“Century”) is a Microfinance institution a diaspora story that has evolved to Short term deposits with banks 67 5 - 13 7 Short term deposits with banks 18 8 11 become a local story as well. It is a link of Government securities - - - - - that specializes in providing financial Government securities - - - Advances to customers 103 103 79 107 82 services to Micro, Small and Medium Advances to customers 31 35 19 Kenyan Diaspora Investments to the local Due from related organisations - - - - - Businesses at large. The primary focus is Due from related organisations - - - people’s need of small credit facilities to Other receivables 30 29 9 14 16 to serve the agricultural sector which has Other receivables 10 5 1 improve their livelihood and break the Deferred Tax 26 26 11 Deferred Tax 38 38 41 36 31 largely been under served by financial poverty cycles. The idea traces its roots Other investment - - - - - Other investment - - - institutions. Century was licensed by to the mid 1990’s & 2000’s when Kenyans Investment in associate companies - - - - - Investment in associate companies - - - migrated in masses to the U.S in search Intangible assets 10 12 17 21 1 the Central Bank of Kenya as a deposit Intangible assets 20 13 17 Property and equipment 25 19 21 19 18 taking microfinance institution on Property and equipment 13 15 15 of opportunity. After years of being in TOTAL ASSETS 288 216 197 231 163 19th September 2012 to provide the TOTAL ASSETS 119 122 77 the land of opportunity there was a full range of financial services such as strong desire to create opportunities for LIABILITIES savings accounts and credit. Century has LIABILITIES Kenyans back home Cash collaterals held - - 6 7 11 Cash collaterals held 54 40 2 over 15,000 clients many of whom are Customer deposits 222 144 99 127 55 Customer deposits 27 26 15 being served remotely using a branchless Borrowings 18 19 22 0 Borrowings 10 5 - The performance for the bank decline in Deferred income - - - - approach on the back of a technology Deferred income - - - 2017 since the bank made a further loss Deferred tax liability - - - - platform. Deferred tax liability - - - of KSh 54 million in 2017 from a loss of Due to related organisations - - - - Due to related organisations - - - KSh 50 million in 2016,Total assets slightly Other liabilities 34 35 18 20 7 Other liabilities 7 5 4 The performance for the bank declined declined by 2% from KSh 122 million in TOTAL LIABILITIES 275 193 144 155 73 TOTAL LIABILITIES 99 76 21 in the year 2017 since it made a further 2016 to KSh 119 million in 2017.Custpmer SHARE CAPITAL & RESERVES loss of KSh 63 million in 2017 from a loss SHARE CAPITAL & RESERVES deposits grew by 7% from KSh 26 million Share capital 293 234 215 185 165 KSh 52 million. Total assets increased by Share capital 133 105 84 in 2016 t9o KSh 27 million in 2017. Share premium - - - - - 33% from KSh 216 million in 2016 to KSh Share premium 5 5 2 Advances to customers declined by 11% Retained earnings (118) (64) (29) Retained earnings (280) (216) (162) (109) (75) 288 million in 2017,Customer deposits from KSh 35 million in 2016 to KSh 31 Revaluation reserve - - - Revaluation reserve - - - increased by 54% from KSh 144 million in million in 2017.Interest on loan portfolio Statutory reserve - - - Statutory reserve - - - increased by 95% from KSh 7 million in TOTAL SHAREHOLDERS' FUNDS 13 18 53 76 90 2016 to KSh 222 million in 2017.Advances TOTAL SHAREHOLDERS' FUNDS 21 46 57 to customers remained constant at KSh 2016 to KSh 13 million in 2017. TOTAL LIABILITIES AND EQUITY 288 216 197 231 163 103 million in 2017.Interest on loan TOTAL LIABILITIES AND EQUITY 119 122 77 STATEMENT OF COMPREHENSIVE portfolio declined by 41% from KSh 36 STATEMENT OF COMPREHENSIVE Income million in 2016 to KSh 22 million in 2017. Income Interest on Loan Portfolio 22 36 26 20 7 Interest on Loan Portfolio 13 7 1 Fees and Commission on Loan Portfolio 3 6 9 8 4 Fees and Commission on Loan Portfolio 1 3 1 Government Securities - - - - - Government Securities - - - Deposit and Balances with Banks and Financial Institutions 2 0 1 2 2 Deposit and Balances with Banks and Financial Institutions - - - Other Investments - - 2 - - Other Investments 2 1 1 Other Operating Income 11 6 - 2 1 Other Operating Income 2 0 - Non-Operating Income - - - - - Non-Operating Income - - - Total Income 38 49 43 32 13 Total Income 19 11 3 Expenses Expenses Interest and Fee Expense on Deposits 18 10 8 10 3 Interest and Fee Expense on Deposits 7 2 - Other Fees and Commissions expense - - 1 2 1 Other Fees and Commissions expense - 0 - Provision for Loan Impairment 3 6 22 8 3 Provision for Loan Impairment 4 1 0 Staff Costs 32 34 31 22 21 Staff Costs 27 19 19 Director’s Emoluments 1 2 2 2 1 Director’s Emoluments 3 3 1 Rental Charges 10 10 5 4 3 Rental Charges 5 5 3 Depreciation Charges 2 2 4 2 2 Depreciation Charges 3 2 1 Overview Overview Amortization Charges 7 7 5 5 1 Amortization Charges 4 4 3 Date licensed Date licensed Other Administrative Expense 26 28 23 17 17 Other Administrative Expense 17 23 16 Non-Operating Expense - - - - - No. of Branches Non-Operating Expense - - - No. of Branches Total Expenses 100 99 101 71 52 Total Expenses 70 59 43 Chief Executive Officer Chief Executive Officer Operating Profit (62) (50) (58) (39) (39) Operating Profit (51) (49) (40) Mr. Reuben Kimani Kenneth Njoroge- Finance & Administration Interest and Fee Expense on Borrowings(Finance Costs) 1 1 - - 0 Interest and Fee Expense on Borrowings(Finance Costs) 3 1 0 Physical Location Physical Location Profit/(Loss) before tax (63) (52) (58) (39) (39) Bihi Towers, Moi Avenue, Nairobi Profit/(Loss) before tax (54) (50) (40) Siron Place, Magadi Road, Ongata Rongai Current Tax - - - - (12) Current Tax - - - Contacts Contacts Deferred Tax - 3 5 (5) - Deferred Tax - (15) (11) Net Profit After Taxes (63) (55) (53) (34) (27) Tel: +254 756 305 132, +254 722 168 721 Net Profit After Taxes (54) (35) (29) P.O Box 18263-00100, Nairobi, Kenya Donations - - Email: [email protected] Donations - - - Tel: 020 3882 206, 020 3882 207, +254 736 662 Surplus on Revaluation of Building - - Website: www.century.co.ke Surplus on Revaluation of Building - - - 218, +254 724 308 000 Deffered Tax on Revaluation Reserve - - Deffered Tax on Revaluation Reserve - - - Email: [email protected] Total Comprehensive Income (63) (55) (53) (34) (27) Total Comprehensive Income (54) (35) (29) Website: www.choicemfb.com Source: Bank Supervision Reports from Published Financial Statements Source: Bank Supervision Reports from Published Financial Statements 282 BANKING SURVEY | 2018 BANKING SURVEY | 2018 283 MICROFINANCE BANKS # CATEGORY WINNER 1ST RUNNERS UP 2ND RUNNERS UP 1 Overall Best Micro-Finance Bank in Kenya 2018 KENYA WOMEN MICROFINANCE BANK 2 Best MF Bank in Product Innovation KENYA WOMEN MICROFINANCE BANK U & I MICROFINANCE BANK RAFIKI MICROFINANCE BANK 3 Best MF Bank in Agriculture and Livestock Financing KENYA WOMEN MICROFINANCE BANK 4 Fastest growing Micro Finance Bank CARITAS MICROFINANCE BANK SUMAC MICROFINANCE BANK MAISHA MICROFINANCE BANK BEST BANKS IN KENYA 2018 UNVEILED INDIVIDUAL RECOGNITIONS 1 Outstanding Young Banker of the year Daniel N. Gachau - Equity Bank This year’s best banks in Kenya were unveiled at a dinner gala held Bank and Diamond Trust bank Kenya Limited. Citibank N.A. team won on Friday 11th May 2018 at Radisson Blu Hotel in Upper Hill, Nairobi. best bank in tier II category. GT Bank won best bank in tier III category, 2 Corporate Banker of the year Michael Mutiga - CITIBANK N.A. KENYA Equity Bank Limited once again carried the overall best bank in Kenya while Paramount bank won the Best Bank in Tier IV category. 3 Chief Executive Officer of the year- James Mwangi - Equity Bank trophy. The bank’s CEO was also named the CEO of the year. Kenya Women Finance Trust, KWFT took the trophy for the overall 4 Special Judges Awards for Product Innovation Equity Afia The awards strategic objective is to recognize and reward best microfinance bank in Kenya 2018 and the Best microfinance bank outstanding performance of banks as it reflects in their audited in Product Innovation. Other winners include CARITAS microfinance financial statements. Equally, the awards seeks to shine a spotlight bank who won the Fastest growing microfinance bank of the year on banks that have greatly contributed to the growth of the sector trophy. through technological innovations, good corporate governance, social Individual recognitions awards went to Daniel N. Gachau of Equity impact and sustainability, education and great customer service. Bank as the Outstanding Young Banker of the year, Michael Mutiga of This year’s survey and focus was on how banks in Kenya are Citibank N.A. took home the Corporate Banker of the year trophy. The reorganizing themselves to remain both profitable and compliant in the Chief Executive Officer of the year is Dr. James Mwangi, CEO Equity new regulatory regime, hence the theme Recalibrating to new standards. Bank Limited. Special Judges Awards for Product Innovation went to This year’s awards had 26 categories for commercial banks and Equity Afya, a product of Equity Bank Limited. 4 categories for microfinance banks. Of the 26 categories, the most PKF East Africa, the awards judging process partner, took lead and contested categories included, overall best bank in Kenya, Best Bank audited the entire judging process including the selection of judges, in Internet banking Best Bank in product innovation and best bank financial data and market information presented as well as the in Retail banking categories. For the Microfinance banks, the highly determination of winners based on set criteria. contested categories included overall best Micro-Finance bank in Kenya The event has been held annually for the past fourteen years and 2018, Best MF bank in Product Innovation, Best MF bank in Agriculture has grown to be the biggest and most anticipated award gala for Kenya’s and Livestock financing. banking sector. It is organized by Think Business Limited, a financial Other than being crowned the best bank in Kenya Equity Bank sector power house in partnership with Strathmore Business School as Limited, also bagged other 18 awards in various categories. Other big the knowledge partners and Infrotrak Research as the market research winners of the night included, Citibank N.A. bank, GT bank, Stanbic partners. # CATEGORY WINNER 1ST RUNNERS UP 2ND RUNNERS UP Equity Bank staff display their trophies 1 Overall Best Bank in Kenya 2018 EQUITY BANK 2 Best Bank in Tier I EQUITY BANK BARCLAYS BANK OF KENYA 3 Best Bank in Tier II CITIBANK N.A. KENYA 4 Best Bank in Tier III GT BANK GULF AFRICAN BANK VICTORIA BANK 5 Best Bank in Tier IV PARAMOUNT BANK 6 The bank with the lowest charges for SME PARAMOUNT BANK CREDIT BANK GUARDIAN BANK 7 The bank with the lowest charges fo Individuals EQUITY BANK STANDARD CHARTERED BANK OF KENYA ABC BANK 8 The Most Customer-centric banks EQUITY BANK DIAMOND TRUST BANK KENYA ABC BANK 9 Best Bank in Mobile Banking EQUITY BANK GT BANK 10 Best Bank in Internet Banking EQUITY BANK CITIBANK N.A. KENYA STANBIC BANK KENYA 11 Best Bank in Agency Banking EQUITY BANK 12 Best Bank in Product Innovation DIAMOND TRUST BANK KENYA EQUITY BANK CITIBANK N.A. KENYA 13 Best Bank in Product Marketing EQUITY BANK - Easy Pay 14 Best Bank in SME Banking EQUITY BANK DIAMOND TRUST BANK KENYA CREDIT BANK 15 Best Bank in Mortgage Finance STANBIC BANK KENYA EQUITY BANK 16 Best Bank in Islamic Banking GULF AFRICAN BANK 17 Best Bank in Asset Finance EQUITY BANK NIC BANK 18 Best Bank in Agriculture and Livestock Financing STANBIC BANK KENYA TRANSNATIONAL BANK EQUITY BANK 19 Best Bank in Trade financing CITIBANK N.A. KENYA EQUITY BANK SIDIAN BANK 20 Best Bank in Retail Banking EQUITY BANK 21 Best Bank in Corporate Banking CITIBANK N.A. KENYA STANBIC BANK KENYA EQUITY BANK 22 Best Commercial Bank in Micro-Finance EQUITY BANK 23 The Most Efficient Bank BANK OF INDIA BANK OF BARODA I&M BANK 24 Best Recovery Award CREDIT BANK 25 Best bank in sustainable Corporate Social Responsibility EQUITY BANK 26 Best Bank in Digital banking EQUITY BANK Stanbic Bank, Best Bank in Agriculture and Livestock Financing 284 BANKING SURVEY | 2018 BANKING SURVEY | 2018 285 How to Baroda own.....?? Home Loan Bank of Baroda, 1st Runners up, Most Efficient Bank Hassle free processing. Attractive Interest Rates, no other charges. Credit Life Insurance Coverage available. Guardian Bank, 2nd Runners up, the Bank with the Lowest Bank Charges-SME Gulf African Bank, Winner, Best Bank in Islamic Banking Advantage of Income in Current Account. Multiple free facilities. Maisha Microfinance Bank, 2nd Runners Up, Fastest Growing Micro Finance Bank U&I, 1st Runners Up, Best Micro Finance Bank in Product Innovation 286 BANKING SURVEY | 2018 BANKING SURVEY | 2018 287 288 BANKING SURVEY | 2018