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CBK Governor No Match to Kenyan Banks.
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kizee1
#41 Posted : Tuesday, April 05, 2011 5:52:58 PM
Rank: Member

Joined: 9/29/2010
Posts: 679
Location: nairobi
Sufficiently Philanga....thropic wrote:
kizee1 wrote:
any1 kno how i cud short bank stocks?

You can start by offloading your current bank stocks! It will only be a good move if the rates keep their upward momentum!


short sellin means i dont have any lol...
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mukiha
#42 Posted : Wednesday, April 06, 2011 9:17:53 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
kizee1 wrote:
mukiha wrote:
BTW: As I stated earlier, Equity made sh2b from bond trading. That information is in their annual report, note 9.

And is a revaluation surplus treated as an income? i don't think so, but accountants in the house can clarify....



revaluation is treated as income..chek out IAS 39 and the meaning of mark to market, did u follow the int rate trends of last year? just do the math...ur a brite lad...[b]chek out the trading books of some of the large banks and u will have ur answer....

I am getting irritated by your "secretiveness". You keep talking about "big banks" and how they are making loads of profits from G-secs, but you are not giving any details.

Now, I am a shareholder in Equity [which is one of the biggest banks in Kenya, if not THE biggest], can you refer me to the page where I will find this information that you are talking about?

The only one I can see is in note 9[b] {page 77} of the report. and it say clearly: "Net trading income [from] bonds trading = Sh2.048b"

As I noted earlier, this is just under 10% of the banks total income of Sh22.153b [see consolidated income statement on page 38].

I repeat: bond trading is not a major income for banks. This is just fallacious opinion peddled by lazy and incompetent Kenya financial journalists - most of whom cannot tell the difference between a balance sheet and an income statement!
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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drake
#43 Posted : Wednesday, April 06, 2011 10:30:08 AM
Rank: Member

Joined: 8/8/2009
Posts: 170
Perhaps the ''lazy and incompetent Kenya financial journalists '' are

1. talking about the 'total return'
i.e cap gains + interest income + fees & commissions + other

2. about (1), relative to how much the same contributes to operating profits for COMMERCIAL banks in other countries and jurisdictions ....with the same risk profile.

25 minutes max to confirm this (use moody's / S&P local debt ratings as a proxy for risk profile)

....and while SCBK is more the exception than the rule, this is quite interesting all the same...

http://www.standardchart...0Pack%20Disclosures.pdf

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selah
#44 Posted : Wednesday, April 06, 2011 10:36:21 AM
Rank: Elder

Joined: 10/13/2009
Posts: 1,950
Location: in kenya
mukiha wrote:


I repeat: bond trading is not a major income for banks. This is just fallacious opinion peddled by lazy and incompetent Kenya financial journalists - most of whom cannot tell the difference between a balance sheet and an income statement!


How do you then explain a paltry 21% growth in Equity's loan book against 169% growth in investment securities in the last FY.
'......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
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kizee1
#45 Posted : Wednesday, April 06, 2011 10:44:14 AM
Rank: Member

Joined: 9/29/2010
Posts: 679
Location: nairobi
selah wrote:
mukiha wrote:


I repeat: bond trading is not a major income for banks. This is just fallacious opinion peddled by lazy and incompetent Kenya financial journalists - most of whom cannot tell the difference between a balance sheet and an income statement!


How do you then explain a paltry 21% growth in Equity's loan book against 169% growth in investment securities in the last FY.




very valid point..and for mr irritated, pole jo..selah seems to have done his own bit of invsetigating..btw im not even talkin about equity
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mukiha
#46 Posted : Wednesday, April 06, 2011 12:17:13 PM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
selah wrote:
mukiha wrote:


I repeat: bond trading is not a major income for banks. This is just fallacious opinion peddled by lazy and incompetent Kenya financial journalists - most of whom cannot tell the difference between a balance sheet and an income statement!


How do you then explain a paltry 21% growth in Equity's loan book against 169% growth in investment securities in the last FY.

Holding a huge sum in G-secs does NOT mean they are making a lot of money from there! It only means they have nowhere else to keep the customer deposits.

The bulk of the banks' income comes from interest charged on loans and advances to customers.

Please note that I am not saying they don't make money from bond trading; I am rejecting the fallacious notion that the bulk of these profits are from trading of G-secs. That notion is simply not true.

BTW: I am still waiting for anyone to put here data to show that G-sec trading contributes a lot more than the 10% of income that I have stated above.

Show us a bank that made say, 20% of income from G-sec trading and this debate will come to an end.
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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mukiha
#47 Posted : Wednesday, April 06, 2011 12:21:48 PM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
drake wrote:
Perhaps the ''lazy and incompetent Kenya financial journalists '' are

1. talking about the 'total return'
i.e cap gains + interest income + fees & commissions + other

2. about (1), relative to how much the same contributes to operating profits for COMMERCIAL banks in other countries and jurisdictions ....with the same risk profile.

25 minutes max to confirm this (use moody's / S&P local debt ratings as a proxy for risk profile)

....and while SCBK is more the exception than the rule, this is quite interesting all the same...

http://www.standardchart...0Pack%20Disclosures.pdf


The SCB report whose link you have provided has the following figures:

Total Operating income = Sh14.15b

Other income (which, presumably include G-sec trading) = Sh1.513b

Clearly; this is also within the 10% I have been talking about!!
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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mukiha
#48 Posted : Wednesday, April 06, 2011 12:25:56 PM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
kizee1 wrote:
selah wrote:
mukiha wrote:


I repeat: bond trading is not a major income for banks. This is just fallacious opinion peddled by lazy and incompetent Kenya financial journalists - most of whom cannot tell the difference between a balance sheet and an income statement!


How do you then explain a paltry 21% growth in Equity's loan book against 169% growth in investment securities in the last FY.




very valid point..and for mr irritated, pole jo..selah seems to have done his own bit of invsetigating..btw im not even talkin about equity

@kizee1; I disagree. @selah has done absolutely no homework! S/he has not posted any evidence whatsoever to support her/his position! This is what I am finding irritating.

@drake has done better; but the evidence s/he has given only goes to support my position that G-sec trading only contributes about 10% of the total income of the banks!
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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  | | Edit by user: Wednesday, April 06, 2011 12:35 PM | Reason: Not specified
kizee1
#49 Posted : Wednesday, April 06, 2011 12:51:23 PM
Rank: Member

Joined: 9/29/2010
Posts: 679
Location: nairobi
ok guess ur very rite and the rest of us who actually are insiders are wrong...sawa bro, this is my last post on this matter
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mukiha
#50 Posted : Wednesday, April 06, 2011 1:05:04 PM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
kizee1 wrote:
ok guess ur very rite and the rest of us who actually are insiders are wrong...sawa bro, this is my last post on this matter

"A tiger does not proclaim his tigritude, he pounces"
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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