@Kenyaninvestor, its true. It was an incentive put up to attract more companies to list thus comparing KCB & EB on PBT is better off than PAT. What i'm not yet sure about is if the rate EB was using ended in the last financial period or will end during this financial period as i'm not sure whether a co. starts to use the rate on the financial period in the year of listing or the next.

The reasons why KCB might never overtake Equity:

1.KCB is too conservative and rigid they take alot of time to respond to market needs and when they do it takes alot of time to take off take for instance mobile banking Iam sure we have KCB customers who dont even know its linked to MPESA.Agency banking they partners with posta which to me does not add any value since if you look at postas outlet distribution its the same as KCB and he working hrs are slightly the same.

2.KCB has never shed its elitist tag even when their strategy to target SME takes shape.I have dealt with both KCB and Equity and their management styles are totally different whereas Equity will mingle freely with its customers even visiting customer premises and homes to have a clear understanding of their loan applicants KCB rely solely with the audited accounts and bank account history...which to me makes them disconnect with their target customers.

3.KCB has one of the slowest service in the country it takes several minutes to serve a single client am sure if KCB had the same number of customers as Equity service will come to a stand still...I think they need to work on their customer turn around time.

@young, I wouldn't be so bold as to predict that KCB will perform better than Equity from 2012. As, @VituVingiSana says, Equity will also be growing.

You say you bought KCB at an equivalent price of 5.1/=. Excellent for you! But for those who are starting to invest now, would you still advise them to pick KCB over Equity?

Getting the Cost:Income ratio to 50% might take more than the 18 months you state, even if we consider the 1 billion rise in staff costs to be a one off

@gmg Replicating agency banking in other countries will depend on their regulatory framework.

Here in Kenya,Equity agency banking is spreading like bush fire, actually I think it posses a serious threat to safaricom Mpesa network.

Funny KCB has not registered any price movement while supply outstrip demand the market was not impressed by the results or The bear is lurking.

Agency banking will be replicated every where coz Kenya sets the pace for other countries in East Africa. to know the impact of EQUITY Agency visit the coutry side