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Equity’s courtship of NBK will shake the financial landscape
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McReggae
#1 Posted : Monday, April 06, 2009 7:47:00 AM
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Joined: 6/17/2008
Posts: 23,365
Location: Nairobi
This makes for an interesting read!!!

http://www.bdafrica.com/...d=13855&Itemid=5821


Make money.....then you will enjoy all the fine things in life!!!
..."Wewe ni mtu mdogo sana....na mwenye amekuandika pia ni mtu mdogo sana!".
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adept
#2 Posted : Monday, April 06, 2009 8:13:00 AM
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Joined: 12/8/2008
Posts: 359
An interesting read indeed on the reasons why it can happen...

But I hope Carol Musyoka and many other Kenyans are not reading too much into James Mwangi's comment... Wasn't the EB MD responding to a suggestion from a shareholder during the AGM?

He said they would consider it...not commit...the guy is a politician...an integral part of a CEOs job. You have to play to the gallery... He had to provide a smooth landing to the unexpected question. All he can then do during the next AGM or media briefing is mention that they have evaluated and deemed that strategy non-beneficial.

In my own opinion,most serious suitors for a transaction of that magnitude would not want their intent to start hitting the press so prematurely...

But let's wait and see.
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VituVingiSana
#3 Posted : Monday, April 06, 2009 10:10:00 AM
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Joined: 1/3/2007
Posts: 18,098
Location: Nairobi
EB is better off with the ORGANIC growth unless they can buy 100% of NBK. HFCK was not a direct competitor coz EB does not do mortgages. In 3-5 years,I think EB will buy 100% of HFCK.

Unless NSSF & Gava agree to sell all their shares to EB,why shouldn't EB spend its money expanding across the country rather than buying NBK?

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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mv ufanisi
#4 Posted : Monday, April 06, 2009 3:17:00 PM
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Joined: 12/13/2006
Posts: 108
I don't see why Equity Bank should diworsify. Equity is best at dealing with mass scale and low margins. Why make life difficult. Equity should focus on expanding into the whole of Africa and South America before trying to diworsify.

Why to make life difficult?
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Mainat
#5 Posted : Monday, April 06, 2009 11:01:00 PM
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Joined: 11/21/2006
Posts: 1,590
I don't see the pt,because Equity would have to buy a controlling stake to benefit from the so-called deposits. Plus JM has already said he wants 40% PAT outside Kenya in the next few yrs,so it won't make sense to go for NBK in that instance.
Unless GoK can't find another strategic partner

www.mjengakenya.blogspot.com
Sehemu ndio nyumba
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Mbuga Man
#6 Posted : Tuesday, April 07, 2009 4:38:00 AM
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Joined: 11/21/2008
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Kingereza ngumu !!! could someone explain to me what does the word 'Diworsify' as used by Hon. MV Ufanisi mean???

If All Men were to remain on Planet earth and women taken to Planet Mass or Pluto,then men will not be tempted...as easy as 1+1
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jammo
#7 Posted : Tuesday, April 07, 2009 5:07:00 AM
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Joined: 2/12/2008
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Diworsify..when ur attempt of diversifyin/expansions backfires on u..ends up costing u more than u invested in terms of finances n core biz... enough to cripple u!....cases in point.. Uchumi,Discount Securities.. Kencell..(remember those ugly phone booths?)

DISCLAIMER: This is the opinion of one Jammo,CFA,CPA,Opinionated and Loud,based in nairobi. Whilst care has been taken in compiling the data to be as most factual n logical,he doesn't accept any responsibility of accuracy or completeness of info contained herein..neither does he purport to be a genius!
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holycow
#8 Posted : Tuesday, April 07, 2009 8:01:00 AM
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mukiha
#9 Posted : Tuesday, April 07, 2009 10:15:00 AM
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Joined: 6/27/2008
Posts: 4,114
Equity does not need anything from NBK!! Not their branch network,not their market 'expertise',not their earnings (when was the last time they paid dividends?),not their (mis)management....nothing.

In addition,NBK is a non-entity in the Kenyan banking market...struggling to stay afloat....thus provides not strategic positioning

So; what reason would Equity have to acquire a controlling (or any) stake in NBK?

Mwangi was simply telling Equity his shareholders that if they don't like the idea of NBK being taken over by a strategic (foreign) investor,they - as equity shareholders - can buy the NBK shares...not as Equity Bank Ltd
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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McReggae
#10 Posted : Tuesday, April 07, 2009 11:51:00 AM
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Mukiha,

Looking at it from an investment point of view,don't you think having a controlling share in NBK will result into more profits for the EB family????


Make money.....then you will enjoy all the fine things in life!!!
..."Wewe ni mtu mdogo sana....na mwenye amekuandika pia ni mtu mdogo sana!".
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mukiha
#11 Posted : Tuesday, April 07, 2009 11:57:00 AM
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Joined: 6/27/2008
Posts: 4,114
NO!

The money spent on NBK can make more profit if left in Equity's current operations....compare the ROCEs of the two and see what I mean.....Equity is much more efficient in turning a profit out of every shilling invested than NBK
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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McReggae
#12 Posted : Tuesday, April 07, 2009 12:42:00 PM
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......and if EB influences/takes over management of NBK,remember EB is only to do this if they have that extra cash to invest!!!!!

Make money.....then you will enjoy all the fine things in life!!!
..."Wewe ni mtu mdogo sana....na mwenye amekuandika pia ni mtu mdogo sana!".
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mukiha
#13 Posted : Tuesday, April 07, 2009 12:50:00 PM
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Joined: 6/27/2008
Posts: 4,114
...yeah,yeah,...but why bother going the round-about way...unless it's for CSR?
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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livo
#14 Posted : Tuesday, April 07, 2009 2:22:00 PM
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Joined: 4/2/2009
Posts: 17
Location: Nairobi
Who's read today's article in Standard Newspaper called:
'At this rate,who will slow down Safaricom?'
THis reflects EB's true corporate governance. Even if you argue out,if it takes a share of NBK,the management has to change and work according to EB's model of management so the profits have to go up just the way EB's is going up!!!

~Livo~
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