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KCB running Chase Bank (in receivership)
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kediveKed
#41 Posted : Wednesday, April 20, 2016 4:50:01 PM
Rank: New-farer

Joined: 3/28/2016
Posts: 37
Location: nairobi
MaichBlack wrote:
Ericsson wrote:
@washiku
Owining two competing etities in the same market.
Unless either they decide chase bank and ecobank be merged

Economics 101: Owning two competing business is NOT conflict of interest (especially if you are a major shareholder in both).

It could be loosely be deemed to some sort of conflict if you are a major shareholder in one and a minor shareholder in the other and you use you influence in the company where you are the minor shareholder to push for decisions that favour the company where you are the major shareholders - But where would the major shareholders in the company you are a minor shareholder be when you are pulling that off.

Conflict of interest comes in when companies are interacting/trading with each other. Like Ciano selling vegetables to Uchumi or if Dr. Opus Dei would own a bank/become the main shareholder in one!



Owning 2 competing entities in a market can be construed as 'unwarranted concentration of economic power' as outlined in section 50 of the competition act. HOWEVER, for the competition authority to determine so, there are some rules there-under. like for example there needs to be evidence of ownership i.e

Ownership concentration - where one or more undertakings control a substantial ownership interest in businesses or the productive inputs of a particular industry in the economy to affect the market outcomes in a manner that will result to the effects set out in Section 50(4) of the Act.

Another vital rule is whether the combined market share of the undertaking is more than 40%; If so the competition authority can act. In your case i doubt ecobank and chase can command 40 percent of the market.

Another issue that flows from all that is who regulates competition and such related matters in the banking sector. CAK or CBK??
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obiero
#42 Posted : Wednesday, April 20, 2016 6:37:02 PM
Rank: Elder

Joined: 6/23/2009
Posts: 14,220
Location: nairobi
To the new farers. kcb purchase is mental. Now, wanjiku wld bet KCB to be safest as per CBK nod of approval

KQ ABP 4.26
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murchr
#43 Posted : Wednesday, April 20, 2016 7:00:02 PM
Rank: Elder

Joined: 2/26/2012
Posts: 15,980
obiero wrote:
To the new farers. kcb purchase is mental. Now, wanjiku wld bet KCB to be safest as per CBK nod of approval


Thought so too, don't see a commitment. Its all good anyway.

"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
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instinct
#44 Posted : Wednesday, April 20, 2016 9:06:21 PM
Rank: Member

Joined: 8/17/2007
Posts: 294
murchr wrote:
obiero wrote:
To the new farers. kcb purchase is mental. Now, wanjiku wld bet KCB to be safest as per CBK nod of approval


Thought so too, don't see a commitment. Its all good anyway.



they've been given a chance to go peep before committing
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Aguytrying
#45 Posted : Thursday, April 21, 2016 7:58:43 AM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
instinct wrote:
murchr wrote:
obiero wrote:
To the new farers. kcb purchase is mental. Now, wanjiku wld bet KCB to be safest as per CBK nod of approval


Thought so too, don't see a commitment. Its all good anyway.



they've been given a chance to go peep before committing


They will need to rebrand from chase to kcb. The name chase gives bad memories and reduces confidence.
The investor's chief problem - and even his worst enemy - is likely to be himself
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Obi 1 Kanobi
#46 Posted : Thursday, April 21, 2016 8:07:52 AM
Rank: Elder

Joined: 7/23/2008
Posts: 3,017
instinct wrote:
murchr wrote:
obiero wrote:
To the new farers. kcb purchase is mental. Now, wanjiku wld bet KCB to be safest as per CBK nod of approval


Thought so too, don't see a commitment. Its all good anyway.



they've been given a chance to go peep before committing


They will take their time to pick the carcas of what remains of Chase Bank, woo all the good and juicy customers as they learn what attracted them to Chase.

When done, they will simply let go off the remainder of the shell and declare it unsalvageable. Take on the good employees and prime locations and rebrand them as KCB.

Smart move by KCB and CBK. No one looses out other than the dodgy Chase shareholders
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Gatheuzi
#47 Posted : Thursday, April 21, 2016 9:30:05 AM
Rank: Veteran

Joined: 8/16/2009
Posts: 994
MaichBlack wrote:
kiash wrote:
Is it true that 97% of the account holders had only 6% of the bank deposits? 3% held 94% so you can imagine who are the 3% this explains a lot.

That is life. Hata "mayuu". Ever heard of the 1% in the US - Who control 90% of the wealth???

To quote Bernie Sanders, the socialist; "There is something profoundly wrong when the top one tenth of one percent owns as much wealth as the bottom 90 percent"

cc US voters.
Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.
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muganda
#48 Posted : Thursday, April 21, 2016 9:55:09 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
The big questions:

1. Which depositors don't interpret this as a call to MOVE funds? Including via online and mobile banking come Wednesday?

2. Do the hefty depositors locked in, 64bn in 5,000 accounts, who obviously have relations with more than one bank, agree to move to KCB?


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Wakanyugi
#49 Posted : Thursday, April 21, 2016 11:18:29 AM
Rank: Veteran

Joined: 7/3/2007
Posts: 1,635
muganda wrote:
The big questions:

1. Which depositors don't interpret this as a call to MOVE funds? Including via online and mobile banking come Wednesday?

2. Do the hefty depositors locked in, 64bn in 5,000 accounts, who obviously have relations with more than one bank, agree to move to KCB?




There is a good reason why banks record depositors on the debit column (beyond accounting practice). The real value to KCB is in the loan portfolio and especially the SME customers that Chase has attracted over the years. These ones are much harder to move.

For the long term, some value could come from the brand but I don't think KCB will want a competing brand in its stable. Remember the challenges they have had over the years in integrating Savings and Loan, which is their baby.
"The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth." (Niels Bohr)
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muganda
#50 Posted : Thursday, April 21, 2016 12:12:27 PM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
Wakanyugi wrote:
muganda wrote:
The big questions:

1. Which depositors don't interpret this as a call to MOVE funds? Including via online and mobile banking come Wednesday?

2. Do the hefty depositors locked in, 64bn in 5,000 accounts, who obviously have relations with more than one bank, agree to move to KCB?


There is a good reason why banks record depositors on the debit column (beyond accounting practice). The real value to KCB is in the loan portfolio and especially the SME customers that Chase has attracted over the years. These ones are much harder to move.

For the long term, some value could come from the brand but I don't think KCB will want a competing brand in its stable. Remember the challenges they have had over the years in integrating Savings and Loan, which is their baby.


Interesting @Wakanyugi, very good point and one I missed.

I see profile of their loans and advances to customers as at 2014 was:
44% maturing within one year
17% maturing within 1-3 years
39% maturing over three years

Chase was reputed for being a 'very understanding lender'. So how many of the loans and advances to these captive customers are unsecured - 50%? 65%? 75%?
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